SRG Global Limited

The Business

SRG Global provides infrastructure maintenance and construction services across Australian resources, utilities, water, defence, and marine sectors. Two-thirds of revenue comes from Maintenance and Industrial Services (M&IS), where the company holds embedded multi-year contracts that renew at roughly 80%. The remaining third flows through Engineering and Construction (E&C), which covers project work where margins are thinner and visibility shorter. The business has grown rapidly through acquisition, most recently absorbing Diona (water utilities, 2024) and TAMS (marine infrastructure, late 2025), adding scale and sector diversification with each deal.

Recent Performance

SRG's shares have re-rated sharply over the past two years, driven by a revenue run from $1.07 billion in FY24 to $1.32 billion in FY25, a 24% lift that followed 32% growth the year before. The TAMS acquisition, completed in October 2025, contributed two months to the first half of FY26 and pushed first-half revenue to $744 million. Management upgraded full-year FY26 guidance to $164-168 million EBITDA at the half-year result, a figure that sits above their historical margin ceiling and reflects the mix-shift benefits of TAMS flowing through.

Outlook

Revenue should reach approximately $1.58 billion in FY26 and $1.73 billion in FY27, with TAMS contributing a full year from FY27. EBITDA margins are forecast to moderate from the FY26 peak of 10.5% toward 10.0-10.2% in FY27-28, then drift lower as the business matures. The M&IS division carries the growth story, growing from $662 million in FY24 to an estimated $1.22 billion by FY27 as acquisition revenue beds in and organic wins compound. E&C grows more modestly, underpinned by government-committed water security and defence programs that are largely decoupled from the interest rate cycle.

Key Risks

Goodwill has grown 131% in three years to $335 million and now represents 76% of book equity, meaning a single failed acquisition integration could trigger an impairment that halves shareholders' equity. Iron ore is sitting at its 15th historical percentile, creating a 12-18 month risk window where BHP and Rio Tinto may cut sustaining capital expenditure, which would pressure SRG's resources maintenance volumes. If the market re-rates the M&A compounding narrative, compressing the multiple from 11.7x toward the peer median of 9.3x, the stock would fall materially from current levels without any deterioration in underlying earnings.

What to Watch

The thesis-defining event is the TAMS full-year contribution in August 2027, which will confirm whether SRG's M&A integration track record extends to its largest deal. BHP and Rio Tinto's FY27 capital expenditure guidance, due mid-2026, is the nearer-term signal for whether resources maintenance volumes hold.

• August 2026 SRG FY26 Annual Results — validates the upgraded $166 million EBITDA guidance. A beat or miss relative to the upgraded guidance will set the tone for whether the market sustains its current premium multiple.
• Mid 2026 BHP/Rio FY27 Capex Guidance — a cut of more than 10% would stall work-in-hand conversion and pressure M&IS volumes into FY28.
• Next 12-18 months Next Acquisition Announcement — deal pricing and integration execution will determine whether the M&A compounding thesis remains intact or whether goodwill risk compounds further.

Latest Developments

At the first-half FY26 result, SRG upgraded full-year EBITDA guidance to $164-168 million and reported $744 million in revenue for the six months to December 2025, with TAMS contributing two months of its first full reporting period. Management refreshed the board in February 2026, adding independent directors ahead of potential ASX 200 inclusion as market capitalisation approaches the $2 billion threshold.

Company Description

SRG Global is an ASX-listed infrastructure services company operating across two divisions. Maintenance and Industrial Services (M&IS) accounts for approximately 69% of revenue and generates the majority of group profit, providing routine and shutdown maintenance under long-term contracts at mine sites, power stations, water treatment plants, and marine infrastructure. Engineering and Construction (E&C) covers the remaining 31%, delivering project-based construction and engineering work primarily for government and resources clients. The business has roughly 6,500 employees and operates across Western Australia, Queensland, New South Wales, and South Australia, with some offshore marine capability through the TAMS acquisition. SRG's revenue base has roughly doubled since FY22, driven entirely by a sequence of bolt-on acquisitions rather than organic contract wins alone.

Where the Growth Is

M&IS is the engine. The division has grown from $662 million in FY24 to an estimated $1.22 billion by FY27, adding approximately $348 million of incremental annual revenue over three years. TAMS, acquired in October 2025 for approximately $95 million, contributes around $136 million annually and accounts for the single largest step-up, with a full year flowing through from FY27 onwards. Organic growth within the division is likely running at mid-single digits, though SRG does not separately disclose this figure, making the underlying business momentum difficult to isolate from acquisition effects.

Competitive Position

SRG's competitive position rests on two things: embedded relationships and specialist capability. Maintenance contracts in resources and utilities run for three to seven years, and renewal rates sit around 80%, reflecting the high cost and operational disruption of switching providers mid-contract at a mine site or treatment plant. The company has built genuine capability across eight sectors over 40 years, including specialist skills in concrete remediation, rope access, and marine infrastructure that are not easily replicated. That said, the moat requires continuous execution to sustain. Larger competitors including Monadelphous and Ventia operate across similar sectors, and the barriers to entry are relational and reputational rather than structural. SRG's advantages are unlikely to erode within five to seven years but will not compound indefinitely without continued investment in capability and client relationships.

Management & Capital Discipline

The capital allocation record over the past three years is strong. Management completed three acquisitions (Asset Care, Diona, TAMS) at purchase multiples of 3-5x EBITDA while the combined business trades at 10-12x, creating meaningful value with each deal. The 55% dividend payout and 2% capital expenditure discipline have been maintained throughout, and all three acquisitions have delivered above their respective business cases at the 12-month mark. One honest observation: management never clearly discloses the organic growth rate excluding acquisitions. The reported revenue growth rates of 24-32% are acquisition-driven, and the underlying organic momentum is likely mid-single digits. Investors relying on headline growth to assess business quality are seeing an inflated picture.

Financial Position

The balance sheet is conservatively run on a leverage basis. Net debt to EBITDA sits at approximately 0.16 times, and the company holds $357 million in undrawn liquidity. Interest coverage is comfortable, and the payout ratio of 55% is sustainable at current earnings levels. The one genuine vulnerability is goodwill: at $335 million, it represents 76% of book equity, meaning the balance sheet's apparent strength depends entirely on those acquisition premiums being recovered through future earnings. A sustained impairment would materially reduce the equity base, though current debt levels remain low enough that it would not threaten solvency.