Operator [8]
Your next question comes from Marni Lysaght from Macquarie. Marni Lysaght, Macquarie Research - Analyst [9] “Piers has beat me to it and asked about the bridge with the revenue growth given you flagged the growth of 15% in Comdain.
Just another question I have, is this more around -- I understand what your exposures are.
You're not exposed to guaranteed volumes, but is there any opportunity in the utility space to obtain work that does have some guarantee on volumes?
My understanding is that telco, traditionally, like you have no guarantee on volumes, but that may be -- there may be the potential for guaranteeing volumes in utilities.”
Leigh MacKender, Service Stream Limited - MD & Director [10] “Yes, no problems at all, Marni.
Certainly, in relation to utility work, if you look at the nature of those operations, when it's designed and construction work, that's obviously probably one of the better opportunities to sort of have a firm view on the expected value of revenue associated with individual opportunities.
You've then obviously got questions around the ability to do that over what period of time.
But that's one area. Some of our operations and operations across states are moving to different models.
So total operating costs or outturn costs.
And we've seen that in the water space, and particularly.
So some of those opportunities as we move forward, I think, will provide an ability for the group to sort of understand what will be a stated base as we move forward.” Marni Lysaght, Macquarie Research - Analyst [11] “And like how soon can we exploit those opportunities? Because you've given commentary on the diversification into utility being quite robust. Is COVID impacting your ability to pursue business development in utilities?”
Leigh MacKender, Service Stream Limited - MD & Director [12] “No. The business development pipeline has been really strong, Marni.
“We're actually tendering on a large number of works, and we have been, obviously, over the last 12 months as we've reflected, and we see that now in what Comdain are delivering in terms of growth.
So the pipeline is strong. COVID has impacted, as I said, some of the BAU operations but also impacted our ability to mobilize some of those operations across state borders.
“We talked previously about an example such as Western Australia, where we've secured some work there.
And that's been a real challenge for us to mobilize resources from Victoria and New South Wales, Queensland in to assist with various aspects of that.
“So that's been a challenging period as well as movements up into Queensland.
“So the COVID restrictions certainly impacted our BAU metering operations and inspection services and did inhibit, I think, some way of the business realizing potential growth around design and construction operations in WA and potentially a little bit in Queensland.
That's been the main areas that COVID impacted the group.”
Marni Lysaght, Macquarie Research - Analyst [13] “That's understood. And I can tell from nbn disclosures that they've scheduled a trial late last calendar year for the new -- for the $4.5 billion spend and another trial recently. But do you have any visibility just in wireless, in terms of that 5G spend potentially gaining momentum? And because that -- there's some -- I'm sure there is a focus in the industry on 5G. But could that ever recover or the ramp-up of the spending improve?”
Leigh MacKender, Service Stream Limited - MD & Director [14]
“I think there's certainly -- absolutely, there's a bias for upside there.
We've seen historically low levels of work across our mobile space from what we've received.
I think the re-signing of our Telstra agreement now provides that stable base for us to engage in Telstra around their future volumes of work.
“We've got defined areas where we'll be mobilizing into. “But unfortunately, there's been a delay from where we had intended that to mobilize.
And we're now looking at that transition occurring around July in terms of the new contract model.
So that will provide an opportunity then to work on how we forecast forward and what visibility the group receives. “Certainly, opportunities around the broader client base with Vodafone, Optus and others, where we're seeing low volumes of work. We understand they're trialing and moving to the new technology platforms, and they work closely with the equipment vendors during that mutual period. So certainly, that will be a major focus for us to just ensure that we are closely engaging with those wireless providers to see opportunities to grow.”
(20min delay)