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While building approval numbers remain down on historic levels and builders continue to fall into the clutches of voluntary administration, the latest unaudited financial results from fitout and construction services group SHAPE Australia (ASX: SHA) show a healthy demand for upgrading existing stock.
Sydney-headquartered SHAPE, which employs more than 620 people, has today announced record new project wins of more than $1 billion in FY24, which helped lift net profit after tax (NPAT) by more than 40 per cent to $15-16 million.
The latest result compares to $843.7 million worth of new project wins in FY23, while the company also has backlog orders in excess of $450 million to its name.
"Despite the construction industry continuing to face cost escalation and labour shortage challenges, SHAPE’s robust business model, supported by an agile risk framework for pricing and delivering projects, has enabled us to grow," says CEO Peter Marix-Evans, who has been with the company for more than 13 years and was promoted to CEO in 2017.
"Our diverse project portfolio, particularly in shorter-duration projects, has been a key driver of our success."
The 40 per cent lift in NPAT and a 25 per cent increase in EBITDA to $25-26 million come despite a slight decline in revenue, which Marix-Evans attributes to extended tender periods that have delayed the start of several projects.
"However, we have maintained a strong backlog position for FY25. Our ability to sustain margins despite lower revenue underscores our team’s dedication to operational efficiency, strategic cost management, and resilient safety management," he says.
"SHAPE is optimistic about its growth prospects, supported by a strong forward pipeline and the highest backlog order book as it enters the new financial year."
The expected profit rise for the full-year is down on the 59 per cent growth in NPAT for the December half to $7.5 million, and the increase in new project wins in that half was also significantly higher than the one just ended on 30 June.
SHA shares are up almost 60 per cent over the past year at $2.35, and at the time of writing are up 3 per cent in today's trading following the release of the group's latest figures.
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