The first quarter of FY2025 was a period of growth for Synertec Corporation Ltd (ASX:SOP) driven by increases in its Powerhouse revenue and strategic engineering appointments.
Soaring revenue
For Q1, the company recorded unaudited group revenue and income within the range of $4.5 million to $4.9 million, while the rolling 12-month revenue rose by around 22% year-over-year to an expected range of $19.3 million to $19.8 million.
This performance represents Synertec’s best Powerhouse revenue quarter since the product’s commercial launch, with Powerhouse revenue jumping a stunning 187% from the third quarter of last financial year to the quarter just gone.
Synertec's financial position remains solid, with $8.5 million in cash reserves as of September 2024 and an available debt facility of $15 million, providing flexibility for future growth initiatives.
Accreditation process
The Powerhouse division continues its momentum, having nearly completed an accreditation process that will permit Synertec to oversee all site installation and commissioning work, adding a competitive edge.
“We are progressing field services accreditation to facilitate the rollout of Powerhouse across major coal seam gas basins,” said managing director Michael Carroll.
“This is an important investment allowing Synertec to take control of our destiny with regards to site delivery works, significantly differentiating us from our competitors.”
Strengthened supply chain
The company has also strengthened its supply chain by engaging global suppliers for reliable, cost-effective components.
In its engineering division, Synertec secured several high-value appointments, including to Western Australia’s Water Corporation for process control and automation.
This contract offers access to more than A$100 million in potential water projects over the next five years.
Synertec was one of five members of the Australian Nuclear Science and Technology Organisation’s engineering panel and obtained a A$2.2 million extension for the Melbourne Metro Tunnel Rail Network Alliance project.
This division, maintaining profitability and cash-positive operations, continues to capture a strong project pipeline worth around A$100 million.
“The broader engineering sector is experiencing a cooling of activity from which we are not immune,” Carroll said.
“We have re-calibrated our workforce to optimise our skills matrix for the opportunities we anticipate coming our way.
“However, because we have strategically targeted sectors some years back that would be resilient, I am pleased to observe that we continue to win contracts at good margins, and we have circa $100 million of potential opportunities.
“Our Powerhouse business is building both capability and opportunity. This growth is being matched by the appointment of David Harris to Head of Technology Solutions.
Laser focus
“The result is a ‘laser focus’ on identifying and converting opportunities.
“With the recent appointment of our new non-executive director and chair-elect Johannes Risseeuw, we have the board skills and networks to drive growth and shareholder value.
“Finally, we are building momentum. Engineering and technology are advancing discussions with key client decision-makers on some exciting opportunities while our ‘business as usual’ continues to grow.
“With our success with Water Corporation in Western Australia, we now have a solid foundation in Perth, which will open previously untapped opportunity.
“I think we have good reason to be optimistic and excited.”