SRG Global

The Business

SRG operates two segments. Maintenance & Industrial Services (M&IS) now generates 69% of group revenue and carries a 14.3% EBITDA margin, built on embedded, multi-year maintenance contracts with the likes of BHP, Fortescue, Alcoa and South32. Engineering & Construction (E&C), the remainder, is lower-margin project work spanning water, defence and civil infrastructure. The 2025 acquisition of marine infrastructure specialist TAMS pushed the mix decisively toward M&IS and toward recurring revenue, which is the defining shift in the business over the past two years.

Recent Performance

Revenue grew 27% in FY26, on top of roughly 24% growth the year before, so two consecutive years of unusually strong expansion, both substantially acquisition-driven rather than pure organic momentum. EBITDA margin expanded to 10.2% as the higher-margin M&IS mix took hold. The market has rewarded this with a re-rating to roughly 15 times FY26 EV/EBITDA (earnings before interest, tax, depreciation and amortisation), well above the median of listed peers Monadelphous and Ventia.

Outlook

Management guides to FY27 EBITDA of $195-205m, consistent with a peak margin near 10.5%. From there, margin is expected to fade over the following two years as wage inflation outpaces contract escalation clauses and revenue growth decelerates as the TAMS acquisition annualises out of the base. Earnings growth in FY27 is expected to look strong, but that is largely a one-off base effect from the acquisition rather than a repeatable growth rate, and the more relevant question is what growth looks like once that base effect washes through.

Key Risks

The scale of the market's re-rating is itself a risk: any disappointment on growth or margins would likely trigger a derating toward peer-level multiples, and there is little cushion in the current price to absorb that. Goodwill built up through a decade of acquisitions, including TAMS, now represents a large share of shareholder equity, which creates impairment risk if any acquired business underperforms its investment case. The 14.3% M&IS margin is also a historical peak rather than a proven steady state, and competitors are actively investing to build maintenance capability to contest the same tier-1 client contracts. Each of these risks touches the same underlying question: how durable is the current margin and growth profile, and how much of it is already assumed in the price.

What to Watch

• Feb 2027 FY27 first-half results — the thesis-defining event, confirming whether the M&IS margin holds near current levels or begins its expected fade.
• Q1 CY27 Potential bolt-on acquisition — the market's central bet; a deal would support the premium multiple, silence would undermine it.
• Aug 2027 FY27 full-year result — tests whether guidance is delivered without margin erosion.

Company Description

SRG Global runs two divisions. Maintenance & Industrial Services contributed $1,150m of FY26 revenue (69% of the group) at a 14.3% EBITDA margin, covering asset maintenance, shutdowns and marine infrastructure work (via the TAMS acquisition) for resources, energy and industrial clients. Engineering & Construction contributed $526m at a lower margin, delivering project-based civil, structural and water infrastructure work. Combined, the group serves clients across ten sectors, including resources, energy transition, water, government and defence, reducing reliance on any single commodity cycle.

Where the Growth Is

M&IS is the growth engine, having grown from roughly half of group revenue to 69% through the TAMS acquisition and organic contract wins. The mix shift toward maintenance is structural, since it reflects a genuine change in the client relationship model toward embedded, multi-year contracts. TAMS annualising to a full year of contribution is expected to add meaningfully to FY27 revenue, though that specific boost is a one-off base effect that will not repeat in FY28.

Competitive Position

SRG's advantage rests on embedded five-to-ten-year maintenance contracts with tier-1 resource companies, which generate the 80% recurring revenue base and create real switching costs: clients depend on SRG's site-specific knowledge and safety history, not just its price. Specialist capability in complex structures, such as dam strengthening, facade engineering and now marine infrastructure, limits the pool of credible competitors. This is best described as a narrow but stable advantage rather than a dominant one: Monadelphous and Ventia are both investing to build competing maintenance capability, and we see the current advantage holding for roughly five to seven years without further reinforcement through acquisitions or capability investment.

Management & Capital Discipline

Management has a 12-year record of rapid deleveraging, accretive bolt-on acquisitions (TAMS reportedly running 10% above the acquisition business case), and a fully franked dividend that has grown every year. That is a strong track record by any measure. The honest observation most analysts will not make: this entire transformation has been driven by two individuals, the managing director and chief financial officer, both with 12-year tenures, and there is no visible succession plan disclosed. That concentration of institutional knowledge is a genuine, if low-probability, risk to the thesis.

Financial Position

SRG carries a net cash balance sheet with substantial undrawn facilities, giving it ample headroom to fund further bolt-on acquisitions or absorb a downturn without balance sheet stress. Cash conversion has consistently run above 100% of EBITDA, reflecting the capital-light nature of the maintenance business. Return on invested capital of 14% sits comfortably above the cost of capital we apply, though that spread will narrow if the margin fade we forecast plays out.