Questions and Answers
(Operator Instructions) Your first question today comes from Piers Flanagan from CLSA.
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Piers Flanagan, CLSA Limited, Research Division - Research Analyst [2]
Just a couple for me, if I can.
Firstly, just on the guidance, maybe a bit more color on the second half.
Obviously, telco revenues rolling off, and you've called out a growth rate for Comdain.
I mean do you have full sort of visibility on that revenue for the balance of the year? Or is there any sort of ongoing sort of COVID risks?
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Leigh MacKender, Service Stream Limited - MD & Director [3]
Yes. Thanks, Piers. I mean, as you know, the nature of our operations, we don't have guaranteed volumes across our work programs.
So we work closely with clients to try and understand their future forecasts around all of our programs.
And we've taken that into account when we've reflected that statement and expectation around sort of a flattish second half year or in line with the first.
In terms of COVID, we've had to, unfortunately, look at the current environment and expect that to continue.
We do expect to see continued restrictions around movement across borders.
And that will impact our ability to sort of mobilize and support some of those other opportunities.
So we've certainly taken many of those factors into account.
Piers Flanagan, CLSA Limited, Research Division - Research Analyst [4]
Sure. And then just on telco margins and sort of COVID implications aside, I mean, how should we think about our sort of the telco segment margins going forward as you roll on to these new nbn contracts?
Leigh MacKender, Service Stream Limited - MD & Director [5]
We're pretty comfortable with the margins there. As I've always stated, Piers, at every reporting period, we always do have that sort of 1% to 2% flex, just driven by work volume and the work mix.
So that's always something that we do caveat.
But in terms of the rates in detail agreed, we're very comfortable they're pretty much in line with where we've historically performed.
And we're now mobilizing for the Telstra piece. That's obviously a major focus for us moving forward. But again, pretty comfortable where that is expected to land.
Piers Flanagan, CLSA Limited, Research Division - Research Analyst [6]
Sure. And then just looking ahead, again, in the telco division. I mean sort of aside from existing growth or growth opportunities sort of from existing contracts, can you maybe give some color on sort of what other opportunities with new customers are out there or potentially some near-term tenders that are out there at the moment?
Leigh MacKender, Service Stream Limited - MD & Director [7]
Absolutely. Well, we've obviously talked to one many times before, which is nbn's upgrade program.
We're currently partaking in trials there and working through that RFT process over the next few months, which will determine award scenarios and work volumes.
That's one major opportunity there.
There will, of course, be in the telecommunications sector other opportunities around mobile infrastructure.
We're seeing historically low spends from our clients in that space in terms of the work we've received.
I think there's opportunity there for us to grow that into the future.
And there's a couple of additional opportunities where we don't provide mobile or wireless infrastructure services for clients, and they're indicating their interest to go out to the market and look at securing service providers for the period ahead.
So there are a couple of the major opportunities there.
You'll also continue to have organic-driven opportunities across our contract base.
And we've referenced some of those here, which assisted the telco division in the most recent half.
Ad hoc work programs, et cetera, naturally, given the contract base.
I think the business is positioned well to secure some of those who move ahead.
But very conscious that we need to continue to focus on that as those revenues, particularly around activations, will continue to decline over the next period.
(20min delay)