Thanks @Marketwatch123, I'm really keen to get to the bottom of understanding this - so any information is useful.
I saw today's announcement for the NBN maintenance which is great news. Digging in a bit deeper, the NBN obviously has accounted for a fair chunk of revenue - around $430m in FY20. As the report shows, a significant decrease already experienced with further to occur due to the completion of the design and construction. The new maintenance gig is expected $60m in year 1, and will grow - but still a far call from the amount required to replace. Because the way it is reported, really hard to get exact figures, but no doubt there is a significant gap at the moment. New contracts particularly Unified Services (replacing OMMA), which seems to be a growing area, but still only $70m this year I think. So back of the envelope, a $150m revenue gap coming up? Please correct me if I am missing something.
5G clearly is promising - at the moment all wireless works is $73m in revenue, and this has actually steadily decreased from $120m five years ago. It seems the slow roll out of 5G by Optus has been an issue. And correct me here, but I think there is no contract with Telstra who is the leading 5G provider at this point. So not sure how much one can rely on here to fill the void from NBN and create a new revenue stream.
Obviously the other big opportunity is in utilities, and particularly with the recent Comdain acquisition. Though looking at organic growth in utilities, it's actually negative - utilities has declined by around 10% ex Comdain, and Comdain itself has experienced a decline in revenue by around 12% (from $160m to $140m per half, though full year accounting makes it an increase from $160 mto $288m). I think next year we will see a fuller picture of this negative organic growth unless something changes.
Be glad to hear from those who know more. As I said previously, I like the company and management, but just see some red flags going forward.
SSM Price at posting:
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