Operator [15]
Your next question comes from Steven from Bell Potter.
Steven Anastasiou, Bell Potter Securities Limited, Research Division - Analyst [16]
Just a quick one. Firstly, the dividend was obviously cut and you've got the big new debt facility.
So there's a clear indication of a larger M&A focus.
If you're just able to talk to your thinking of strategy behind a potential acquisition, are you thinking something big like another Comdain or maybe 2 or 3 smaller acquisitions just to get your foothold in a new service or market, which you can then build internally, just your thinking there.
Leigh MacKender, Service Stream Limited - MD & Director [17]
Absolutely. No, absolutely, that was a great question.
As many would know, I've talked previously about that focus on diversification.
And the business is very conscious of taking a measured approach to looking at potential opportunities.
In terms of size, we've cast a net wide.
We've got a number of opportunities both to bolt on or expand the group's capabilities through smaller acquisitions, particularly in the utility space.
But they have prevented -- they have been presented with a number of opportunities of larger size.
And I think that, that's certainly been a major focus for us over this recent period to look what would be the catalyst for a step change in growth.
Obviously, the large organization, we expect that we'll have open to or access to a large addressable market, increased service offerings.
So that's certainly been a focus over the recent period and looking at whether or not we go for something a little larger.
Steven Anastasiou, Bell Potter Securities Limited, Research Division - Analyst [18]
If you were to do something larger, is there a particular area or 2 that you would be more interested in than others?
Leigh MacKender, Service Stream Limited - MD & Director [19]
Absolutely. I think we're still very much focused on the utility market. If we look at our current opportunities there, telco is a great market for us, but has really 5 customers across the business.
And they're large customers, but therefore, you've got a small customer base.
Utilities, due to the nature of their sort of geographic sort of patches or areas they're responsible for, provide significant opportunity.
There's probably 60 to 70-odd utility customers in terms of electricity, gas and water.
So we certainly think that is a favorable market for us to further expand into.
The expenditure in that area is much greater than utilities, just given the size and the nature of their operations in terms of -- or their assets, rather, in terms of the cycle of being to replace and upgrade them is favorable.
So looking at other opportunities to expand our water and gas operations.
Also, electricity is something that we're probably underweight in terms of our current capabilities.
We've got a number of metering operations in electricity, but that probably is a very small section of what is a large market spend of, I think, about $2.5 billion a year in distribution maintenance costs.
So looking at those areas, particularly within utility sector and assessing opportunities.
Steven Anastasiou, Bell Potter Securities Limited, Research Division - Analyst [20]----
Okay.
That's fantastic. The NBN investment program, you've noted you've got some tenders and a few things out at the market at the moment.
Are you able to provide any idea on the potential size of work that you're targeting that you might hope to achieve under that program?
Leigh MacKender, Service Stream Limited - MD & Director [21]
Yes. It's certainly challenging for us to comment on the size of that.
That will be dependent on the number of providers that nbn choose to engage with.
The pace of that program over the next few years, I think it's sort of scheduling to be in FY '22, '23 program.
We are working for that tender cycle.
We expect to know an outcome of that commercial process and market process they're running through at around April or May this year.
So hopefully, before the next cycle, we'll be able to provide firm visibility on what we believe we've secured, at least in that initial phase of the program.
The trial now is going well, but we've got to continue to work through that commercial process to be able to then provide that clear visibility in the future.
Steven Anastasiou, Bell Potter Securities Limited, Research Division - Analyst [22]
Sure. And just the last one, the wireless. So by the sounds of it, no real expectation for any pickup this half, but FY '22 with the new Telstra agreement might be a little bit more positive.
Leigh MacKender, Service Stream Limited - MD & Director [23]
Yes. I certainly hope.
I mean we've talked previously about what has been a larger historical spend in mobile, and that's somewhat reflective of the change in infrastructure as it moved through 3G, 4G, et cetera.
There's certainly a lot of high brand 5G.
And many will know, I'm always quite cautious to talking to the potential growth there.
But I do think the Telstra agreement has been a long process for us to work through that refined and revised model that's being proposed by Telstra.
We've now got that in place. It's secured for up to a 5-year term, and we've got clear areas where we will be working in the future.
And that will provide, I think, opportunity for the business to try and grow into those areas and secure additional market share.
Steven Anastasiou, Bell Potter Securities Limited, Research Division - Analyst [24]
Sure. And just, again, I know you mentioned it earlier. But you definitely don't think there's any additional margin pressure on the telco side given these new contracts and the drop-off in activation volumes?
Leigh MacKender, Service Stream Limited - MD & Director [25]
Well, there's certainly always pressure on margins.
One of the comments I said around our priorities is maintaining that proportionate group cost base to ensure that as work volumes flex, the business flexes with that.
We try and drive a flexible resourcing model so that we don't see significant impacts.
But as Linda and I have outlined, the major impacts we've seen this period is just around that scale benefit that's been missing as work volumes come off.
As you move to the future and your question, I think there's always pressure there.
But I'm pretty comfortable with where the businesses land in terms of our contracts that are being resecured into the future.
You can't comment or have visibility on an absolute work volume, but the margins associated with delivery of those works, I think, are positive for us.
(20min delay)