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Edited Transcript of SSM.AX earnings conference call or presentation 20-Aug-19 11:00pm GMT

Full Year 2019 Service Stream Ltd Earnings Call

Victoria Sep 9, 2019 (Thomson StreetEvents) -- Edited Transcript of Service Stream Ltd earnings conference call or presentation Tuesday, August 20, 2019 at 11:00:00pm GMT

TEXT version of Transcript


Corporate Participants


* Leigh MacKender

Service Stream Limited - MD & Director

* Robert Grant

Service Stream Limited - CFO


Conference Call Participants


* Damien Williamson

Bell Potter Securities Limited, Research Division - Fixed Income and Hybrids Analyst




Operator [1]


Ladies and gentlemen, thank you for standing by, and welcome to the Service Stream full year results conference call. (Operator Instructions) Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Mr. Leigh MacKender. Thank you. Please go ahead.


Leigh MacKender, Service Stream Limited - MD & Director [2]


Thank you. Good morning, ladies and gentlemen. Welcome to Service Stream's Full Year Results Presentation for FY '19. As per the introduction, my name is Leigh MacKender, Managing Director of Service Stream. And I'm joined today by our Chief Financial Officer, Bob Grant; and our Company Secretary, Chris Chapman. As per the introduction, we're recording this session today via webcast, it's open to all Service Stream shareholders. We have a number of institutional investors, analysts, either here in person or on the bridge whom are welcome to ask questions at the conclusion of the presentation.

As per Slide 2 in the market release, the content page. We'll run through a very brief overview of the company profile for those not familiar with our operating structure and the services provided, touch on the performance highlights throughout the prior year, move into some greater detail with regards to the group's financial and operational performance. And then finally, we'll touch on group strategy and outlook. As I said, at the end of the conference, we'll take questions from those joining us here on the bridge. I'd expect to probably take 30 to 45 minutes, including time for questions.

Before we move into the presentation, I'd just like to share a few initial comments with regards to the group's results. We're very pleased with what's another strong period of performance for Service Stream Group and a set of results that we're presenting today, which again we can see the group's guidance that we set earlier in the year.

As a backdrop to these, over the past 12 months, the business has delivered across a number of milestones. Those include, we announced and executed the acquisition of Comdain Infrastructure, that certainly bolstered the group's service offerings, diversified group revenue and provides a solid platform for continued growth across known markets and a familiar client base.

During the year, we delivered solid half year results in February, in which the business confirmed it was our 11th consecutive half at delivering strong improvement across our key financial metrics. Those include, earnings growth over 20%, improvement in EBITDA margins and increased dividend to our shareholders. And on the back of those continued results, the business also entered the ASX 200 indices, again further strengthening our position as a leading listed business.

Today's presentation, I'm very happy to report, reflects our 12th consecutive half in which we continue to deliver the same: further earnings growth, margin improvement and an increased dividend for shareholders. Business continues to focus on delivering incremental half-on-half improvements across our performance. And as per my comments in the attached market release, there are a number of opportunities we believe will support the group to deliver further earnings growth into FY '20.

So moving on to Slide 3 and the company profile. I'll just touch briefly on this. Again, for those not familiar, Service Stream is a utility and telecommunications service provider. Services we provide are associated with the design and construction or the operations and maintenance of essential infrastructure on behalf of our clients. Announced as part of these results and following the successful acquisition and integration of Comdain Infrastructure, the business has moved to 2 reportable segments, those being telecommunications and utilities.

The operating segments within telecommunications, as outlined on Slide 3, are Fixed Communications, that's the network operations and maintenance services, including minor works; and our Network Construction division, which provides services associated with engineering, design and construction of fixed and, [predominantly wise] network infrastructure.

Key clients include those such as nbn, Telstra, Vodafone, Optus, New South Wales Telco, et cetera. And in the utilities division, we have our traditional Energy & Water division that focuses on utility asset installation, inspection and maintenance services; and Comdain Infrastructure, which provides engineering, design, construction and maintenance services. Key clients across the utilities are gas, water, electricity, asset owners, operators, retail service providers and government authorities.

So over time, we'll see these operating divisions under each segment allow the business to provide that seamless end-to-end service capability for our clients across each of those 2 markets. Importantly, given the change though, the business has still retained the high level of disclosure with regards to the results. And at the back of this pack, we continue to include the appendices which allow shareholders to delve further into and [gain] insight into the detailed performance across each area of the business.

If I could direct you to Slide 4, and I'll just touch briefly on some of the performance highlights over the course of the last 12 months with regards to financial, operational and strategic areas of the business.

[And my opening] comment to FY '19 has been a period in which the business has achieved a number of highlights. I should also note in this results presentation that similar to our half year, we've referenced our financial profitability to reflect both EBITDA from operations, that being the underlying businesses' performance prior to accounting for the onetime impact of the Comdain acquisition and the associated integration costs. And of course, we have the statutory reported profitability metrics.

In relation to the financial performance, the business reported yet another period of solid, strong double-digit growth with regards to revenue, profit and dividends. Key headlines include, as I said earlier, the 12th consecutive half in which the business has reported growth across those key metrics. Solid performance in terms of group's cash flow, particularly strong result, delivering higher-than-forecasted operating cash flow. And a conversion rate measured by EBITDA to OCFBIT of 90% for the year. In fact, the second half was particularly strong, generating 103%.

The group retained a net cash result, that's even after outlaying the large cash component to support the Comdain Infrastructure acquisition in January. I think consensus was that the business was expected to have net debt of around $20 million. So coming in with net cash of $10 million, certainly exceeded expectations.

As a backdrop to that, the Board were certainly happy to announce an increased dividend to our shareholders. $0.055 per share fully franked full year, which takes -- sorry, the full year to $0.09 per share, an increase of 20% on FY '18. So again, we're really pleased with the financial performance over that first half with regards to profitability, but we'll delve into these numbers in greater detail as we progress through.

Just touching on the second section there, operational performance. At a high level, we continue to experience really strong demand across both telecommunications and utility services. Our clients continue to invest more in deploying both new network infrastructure but also upgrading aging or existing networks, and that's right across the board: telecommunications, gas, water and electricity.

We continue to place strong emphasis on our safety performance. And I'm very pleased to show further improvement over the year across our key metrics, and I'll delve into that a little further. But certainly industry-leading performance, which is great.

Our utility division's had a fantastic year and that included the renewal of 13 agreements, which had reached their natural end. A lot of our agreements in the utilities space are sort of typically 3- to 5-year agreements. And as a natural consequence of them reaching that stage, as they go out to the market, I'm really pleased to see that all 13 were retained, and that provides circa $250 million of future work. The average period now for contracted over that area of the business would certainly be extending past 20 years, which is fantastic for a service provider to have that longevity with their clients.

Another highlight to mention is Comdain Infrastructure was successful in securing a number of projects. And a particular note, asset renewal agreement with South East Water and that will support the upgrade and renewal of both their water and wastewater infrastructure.

Finally, with regards to strategic highlights, our #1 priority over FY '19 was to support the acquisition and successful integration of Comdain Infrastructure following completion in January. I've included a specific slide later in the pack. So I'll go through that in great detail. But really pleased to report that solid progress has been made on the integration. At the time of announcing, we indicated a 12- to 18-month period that we thought the integration program would be run across, and we're in fact well ahead of that schedule.

Strategically, Comdain brings significant diversification to the group's revenue base across known familiar markets. The revenue assisted in transitioning a business which historically was strongly linked to telco. 80% of our revenue, if you look back on prior years was telco-related. With Comdain coming into the fold now, it's more evenly spread across those 2 major segments of telco and utilities.

The last 2 dot points under the strategic area there are just associated with growth. And it's certainly 1 of our 5 pillars we focus strongly on. It's very pleasing to see the business has secured a number of organic growth opportunities across each segment. Again, I'll touch on those as we go through the presentation. And we are very confident that we'll continue to see new agreements secured over the course of the next 12 months.

Finally, the business has also approached or undertaken a measured approach to looking at other external growth opportunities across our core markets. We certainly remain very confident the business will continue to grow. But there are a number of exciting opportunities that we'll be assessing over the coming months, again, linked to our core markets across telco and utilities.

Moving further into the pack now, we'll touch on financial performance, and I direct you to Slide 6, where we have some of the financial highlights. Firstly, again just to mention that these results have referenced financial profitability with EBITDA from operations being the underlying business performance prior to accounting for the onetime impact of Comdain acquisition and integration costs. And of course, you have the reported statutory metrics. I will talk further in terms of the segments shortly. But across the highlights, the business generated solid revenue growth, $852 million, an increase of 35% or $220 million in FY '18, $160 million of that was attributable to Comdain's operations and the balance reflecting growth across our traditional areas of operations.

EBITDA, as you can see here, from operations, came at $93.3 million, again, reflecting strong double-digit growth at 41% on FY '18 and certainly exceeded our guidance that we released to the market upon the acquisition of Comdain where we indicated second half should at least mirror, if not improve, on the first half where we delivered 38.6% and Comdain were expected to contribute $11 million.

To look further down the line at net profit. Adjusted NPAT was 57 -- or just under $58 million, again, reflecting a similar increase, just under 40% on FY '18. Note the difference between the adjusted and statutory NPAT numbers is the amortization of customer contracts. There is a small amount attributable to a prior acquisition of TechSafe but certainly now more so associated with Comdain Infrastructure.

We do take a conservative approach to increasing goodwill on the balance sheet and [did lot] to amortize the customer contracts over their natural life. And to that point, details of the amortization schedule have been outlined under appendix slide, I think it's on Page 27 of the attached deck.

Finally, cash flow and capital management. As I said in my opening comments. Another really pleasing result, the quality of cash flow generated over the period and the high conversion rate. Full year, 89% in terms of our EBITDA to OCFBIT. But 103% in that second half, well exceeding guidance. We're certainly being proactive in advising the market that if we look back at FY '18 and the prior 3 periods, we were expecting that to decrease from its ultra-high levels that we converted over 140%. But this was not sustainable, but very pleased to see that result. The business also delivered strong double-digit growth in terms of earnings per share. And I'll talk to the dividend, which will be paid on the 2nd of October, and we will be offering a dividend reinvestment plan.

In terms of the key financial measures on the scorecard on Slide 7. I've already touched on these at a high level. The most important thing here is we see the change from FY '18 to FY '19 is positive. We have green arrows on the right-hand side. And I think it's pretty [similar], I don't need to touch on that any further.

I'll hand across to Bob, who will run through the segment results, cash flow and capital management.


Robert Grant, Service Stream Limited - CFO [3]


Thanks, Leigh, and good morning, everyone. If I could direct you to Slide 8 of the deck entitled Segment Results, firstly. The first thing to note here is that the segment results for the year are presented on the basis of the company's new reportable segments, namely telecommunications and utilities. As Leigh mentioned, telecommunications comprises our Fixed Communications and Network Construction businesses. Whilst utilities comprise our Energy & Water business, along with the recently acquired Comdain Infrastructure. You can see that both segments reported significant increases in revenue and EBITDA for the year.

Telecommunications EBITDA of $75.9 million was $13.5 million or 22% higher than the prior year. This resulted from a nearly $53 million increase in revenue along with a 1.3 percentage point improvement in margin. Utilities EBITDA of $23.8 million was $13.3 million or 126% higher than the prior year. This resulted from an increase in revenue of nearly $167 million, offset by a 1.1 percentage point decline in margin.

Comdain Infrastructure's first time contribution to group earnings of $11.1 million EBITDA and $160.2 million revenue provided most, but not all of the segment's increase in those measures. With Comdain's reported margin of 6.9% diluting the segment's overall margin outcome, certainly relative to prior period's history.

Other key takeouts from this slide include unallocated corporate costs of $6.4 million, largely in line with last year; EBITDA from operations of $93.3 million, resulted after adding back $2.5 million of transaction costs associated with the Comdain acquisition; and $1.3 million of integration costs.

Our EBITDA from operations was $27 million higher than the prior year. D&A, certainly excluding the amortization of customer contracts, was $8.8 million, with the $1.3 million increase over the prior year, attributable to the inclusion of $2 million of depreciation charges on assets acquired with Comdain, net of the $700,000 year-on-year reduction in D&A on Service Stream's legacy asset base.

The company incurred financing costs of $1.2 million for the year compared to a financing benefit of $400,000 in the prior year. This was largely due to an increase in the size of the group's banking facility and the drawdown of borrowings to partly fund the Comdain Infrastructure acquisition. Our EBITA of $84.5 million and NPATA of $57.7 million were both up significantly on last year, 44% and 39%, respectively.

And before leaving this slide, let me just remind you that you can find a detailed reconciliation of these adjusted profitability measures back to their statutory or IFRS equivalents, in Appendix 2, on Slide 24 of the results presentation. And you can also find a detailed revenue breakdown for each of telecommunications and utilities in our traditional, very detailed format in Appendix 3.

I'm now on Slide 9, if you wouldn't mind, cash flow results. Whilst the company was never going to repeat the cash generation performance of the prior year, we did generate a better-than-expected OCFBIT of nearly $80 million, in FY '19. The business was able to extract a number of favorable working capital outcomes to partly offset the unwind of revenue in advance on the nbn design and construction contracts that we forecasted this time last year. As Leigh mentioned previously, [profit to] cash conversion, our primary measure here, saw a conversion of 89% for the year and 103% for the second half which we'd like to think underpins the quality of the reported earnings for this period.

Other items on the cash flow slide worthy of specific mention. CapEx net of the proceeds of sale of assets was at $9.4 million for the year. And in response to a couple of requests from analysts, we've included in the back of the pack, an historical breakdown of CapEx spend. And you'll find that in the Appendix 5.

The net cash outflow in connection with the Comdain acquisition ended up being $82.8 million after all of the final adjustments were processed. And this was partly funded by a drawdown of $60 million of borrowings from the group's recently refi-ed financing facilities. Divis for the year totaled nearly $30 million on the back of last year's final dividend of $0.045 per share and this year's interim dividend of $0.035 per share. And lastly, you'll notice that the company's share buyback was suspended for the entirety of FY '19.

Well that segues nicely into capital management. So if I could direct you to Slide 10. And I think there's 3 takeouts on this slide. Firstly, we concluded a major refi during the year to accommodate the Comdain acquisition. And that saw the overall size of the banking facilities grown from $60 million to $190 million, and we added duration to the facilities out to September 21.

Secondly, despite the significant cash outlay associated with the acquisition of Comdain and the obviously increased dividend payments, cash generation for the year was such that the company was able to maintain an albeit reduced net cash position at year-end of $10.5 million. And thirdly, the Board has declared a final dividend in respect of FY '19 of $0.055, it takes total divis to $0.09 per share. And this reflects the dividend payout ratio of 69% based on statutory EPS.

Well, that's all from me. So I'll hand you back to Leigh to go through the balance of the pack.


Leigh MacKender, Service Stream Limited - MD & Director [4]


Thank you, Bob. Appreciate it. I'll now move to the operational performance section of the pack and walk through each of the reporting segments. But firstly, on Slide 12, I'd just like to touch on the group HSE performance. Safety really does remain the #1 priority for our business, and we certainly are committed to ensuring that our people, our customers and the community in which we engage with, whilst we deliver our services, are safe at all times.

To provide some context, at any point in time, our business would have several thousand field staff operating across the country. And this year, Service Stream would undertake of this [party] approximately 35 million property visits, second only to, I think, Australia Post. It's very pleasing under that backdrop to see the business not only retain leading safety performance but even deliver further improvements across some of those key metrics.

As you can see from performance graphs that we've continued to report on over the last few years, our total recordable injury rates have decreased, reaching an all-time low of 2.32. Medically-treated injuries followed the similar trend in terms of the reduction, almost halving over the past 12 months and reaching 1.68. Finally, lost time injury rates, unfortunately, increased from their ultra-low levels this time last year of 0.34. The result of 0.64 is still well below our industry peers and averages. It does place us as the market leader, but certainly in terms of safety performance, we are targeting a range of initiatives to seek further improvements in this area over the course of the next year. But ultimately, very, very pleased with the group's performance in this important area.

Move now into the -- each of the segments. In telecommunications, I'll direct you to Slide 14. As Bob mentioned earlier, revenue over the year of $587 million. That increase in revenue is predominantly due to a couple of factors, one being a favorable mix of activations or connections as part of our work with nbn, and our role in assisting the migration across from Telstra's legacy network over to the national broadband network. We've also seen subsequent increases in assurance or maintenance services associated with that expanding network and our role there and increasing network rehabilitation works, new business-on-demand works, which we announced in December last year were successfully mobilized. All of that is captured under the minor projects reference in the appendices in the accounts. And that grew by about $20 million over the course of the year.

Our MIMA and DCMA operations associated with the design and construction of nbn's fiber-to-the-node and fiber-to-the-curb programs finished the year strongly, generating $127 million of revenue, which was slightly on or -- sorry, on or slightly ahead of our guidance, I think was $125 million for the year. We expect these programs to continue through and around the first quarter. I think we have a couple of [sands] that are due to be released and completed in November, but the bulk of that program has certainly concluded but we will see some contribution therefore in the first half of this current year.

And wireless here was in line with our guidance we provided in February, we expected to see a softening in terms of the level of expenditure by network owners as they deal through quite a significant change from 4G to 5G infrastructure and their associated deployment programs. We guided that we thought this year, the second half would be $20 million to $30 million down compared to the first which is exactly where it came in at. And so [it was in on mark].

Pleasing to see that margins across the telecommunications division as a whole, held or slightly improved on the full year, generating 12.9%. And we note some of the improvements, largely attributable to 2 areas. One is a higher portion of revenue associated with free-issue-material by our key clients in this space, but certainly also the management team deserve some credit for some of the operational efficiencies that they have driven throughout the year to assist in improving those margins.

Very pleased to see that we've now delivered 7 halves or 3.5 years now of above 10% EBITDA margin. And the business seems to be achieving good solid consistency when you look back across that last 4-year period.

Moving on to Slide 15. Now we see some of the key operational updates in terms of the telecommunications division. Touching on the activation assurance works, which falls under our OMMA agreement with nbn. Again, we've included some of those graphs you'd be familiar with seeing at the bottom of the slide, they depict our volumes of work completed in both activations or connections and maintenance or assurance tasks.

Business completed approximately 727,000 activations that was biased to the second half, you can see the first half numbers. If you look back at last half's results, it was about 320,000. So circa 400,000 within the second half as we ramp up to meet nbn's -- or assist them in meeting their targets. We saw a similar increase in assurance or maintenance tickets with the business completing circa 470,000 over the full year, again, biased to the second half.

We'd expect to see maintenance volumes continue to increase as the size of the network expands, more customers are connected and migrate across Telstra's legacy network, are now rolling and ensuring that their support will continue.

The OMMA and NMRA agreements are each reaching an extension option at the end of their initial term in December 2019. We're very pleased to confirm that the extension process is progressing well and we envisage that being finalized shortly.

I'll now cover the utilities segment, moving on to Slide 17. Again, this incorporates both our traditional Energy & Water division and Comdain Infrastructure, both having a positive year. You see the revenue that Bob just touched on earlier, reaching $273 million, a strong increase on FY '18. That increase largely attributable to Comdain Infrastructure, $160 million of it there, the balance being across our traditional areas.

If we look at the EBITDA, the division performed strongly, $23.8 million for the full year. I'm pleased to see that Comdain delivered also on the guidance we set when we announced that acquisition of a second half, contributing $11 million of EBITDA. And of course, the balance then was delivered across the wider utility operations.

The impact of Comdain, as Bob alluded to, did reduce our utility margins from 9.8% to 8.7%. That was expected. Comdain has traditionally delivered a lower EBITDA compared to our existing margins, but still in line with, or not better than industry averages, for their type of work.

I'll now move on to Slide 16 (sic) [Slide 18] and just touch on the operational side of the utilities division. As per my other comments, the markets we face into are certainly experiencing strong growth, both across the design and construction, or D&C, and operations and maintenance services. Linked on this [is an] extension and expansion of their new network infrastructure but the upgrading, renewal of aging assets, particularly across gas, water and electricity, and we'd expect that to continue over the coming years.

I mentioned earlier, the highlight of Energy & Water and the large number of agreements which reaches their natural end date, 13 agreements, supporting circa $250 million of work over their respective terms was secured. I think this speaks to the fantastic services that are provided across the business and our ability to deliver against client requirements. As I said before, many of those agreements now reaching their 20th-plus year, which is a fantastic achievement.

During the second half of the year, we also secured a new agreement with South East Water. As I said, that encompasses the renewal and upgrade of water and wastewater infrastructure. Great win for the business that has an initial 3-year term, plus 2-year option.

We also have moved TechSafe and Radhaz businesses under the leadership of a single executive and combined those operations. We certainly believe there are strong synergies associated with consolidating those, given the similar nature of that independent inspection and advisory service that is provided through their respective operations.

I now move to group strategy and outlook and direct you to Slide 20 entitled Comdain Infrastructure Integration. In terms of the business major strategic initiatives, the acquisition and successful integration of Comdain was certainly our first priority and a major initiative for the year. So I thought we'd touch on this area in greater detail today.

Following on from the acquisitions I indicated earlier, we had a 12- to 18-month integration program. This wasn't focused on cost reduction, but more on aligning the 2 businesses operating models. Both have been growing strongly over the preceding years and wanted to ensure that we could integrate the business, support an enhanced growth into the future.

In terms of the scope of that order -- of the integration, sorry, our initial focus related to key governance matters and supporting BAU operations from day 1. That includes traditional areas around governance, such as banking, insurance, financial reporting, delegation of authorities, et cetera, which pleasingly have now all been completed.

The second area of focus was aligning our support or enabling functions where there were natural synergies. They include functions such as our legal, commercial, human resources, HSE, IT. That second component is either largely complete or is in the final later stages of completion.

Really pleased with the progress the integration team has made and the representatives from across each business. Program's at its final stages now only 7 months after the acquisition, and I would envisage that we finalize that program probably by Christmas. The only remaining item to largely be completed is the transition across to Service Stream's ERP. We've alluded to that detail in the past year. We have a 9-month transition program to move Comdain away from their systems on to our ERP, again supporting an aligned operating model and future growth.

A decision was made over recent months to increase the pace and scope of the integration program. We were conscious that the sooner we can complete the program and move to a BAU environment, free up that resource to look at expanding and growing the business the better it would be.

We also noted that there has been some margin variability across some of the project portfolio works in Comdain. Whilst there Comdain's -- of course Comdain's margins, as I said earlier, at 7% are certainly in line with or [a lot] better than the industry average, that provides a future opportunity for the business if we can iron out some of that variability. And we're certainly confident that we can improve that with the governance initiatives that have been implemented. But in summary, very pleased with the progress that's been made across that important area of the business.

And finally, we move to the outlook slide, so FY '20 outlook. The group, based on my earlier comments, expects to see continued growth in FY '20. We expect to see an increase in our activations and assurance works with nbn. We'll no doubt see a full year's contribution from Comdain Infrastructure, and that will offset partly reduced earnings from the nbn DCMA operations.

Our priorities as outlined by those 7 points, certainly focus on securing a number of growth opportunities as they emerge organically across the business. Maintaining our readiness to deliver 5G services, and I think it's always difficult for us to predict that area of the business, but we do know that there is significant work being planned by each of the asset owners around the transition across to 5G over the coming period.

As I mentioned earlier, we are in the latter stages of finalizing extension to our nbn and OMMA agreements. We have successfully completed the MIMA and DCMA operations, which we're very confident of. And those are latter stages with the infrastructure program. And as I said earlier, we will start to recommence looking at additional market expansion and diversification opportunities, but still very much a measured process, focused across our core markets. That brings an end to the presentation.

I will hand back to the moderator to take any questions from those joining us either here in the room or on the bridge.


Questions and Answers


Operator [1]


(Operator Instructions) And your first question today comes from the line of Damien Williamson from Bell Potter.


Damien Williamson, Bell Potter Securities Limited, Research Division - Fixed Income and Hybrids Analyst [2]


Yes. Well done on the result, Leigh. Can you just, please, outline the opportunities for the renewal of aging pipelines, whether it be for the water as you contract with South East Water or gas pipelines as the customers like APA, and the potential you see for growth in this area of work, particularly post the peak of the nbn rollout and the competition in tendering for this work?


Leigh MacKender, Service Stream Limited - MD & Director [3]


Yes. Thanks, Damien. I appreciate it. We've certainly spoken previously about the opportunity and the growth broadly across the utility area. And we did include some reference material in prior presentations, which actually separate that out across each of those individual areas of business. We are certainly seeing strong demand. Water, certainly. Gas is certainly also seeing a lot of opportunities.

I don't want to specifically reference any particular clients, but you noted there the South East Water, we've already secured that agreement. And APA is a valued customer also going through an upgrade of renewal, particularly of their CBD assets here in Victoria.

So we certainly think that we'll see that continue for the foreseeable future. Many of our clients have indicated they've got programs that will be run over 10- to 20-year periods of time. A lot of these aging infrastructure assets, water and gas, have been put in 40, 50, 60 years ago. So they're reaching the stage where they actually need to be renewed, serviced or upgraded.

So we certainly expect to see that across the business continue to be a major area of growth.


Operator [4]


(Operator Instructions) I have no further questions at this time. Please continue.


Leigh MacKender, Service Stream Limited - MD & Director [5]


That is it. We will conclude the presentation. I'd just like to, again, thank everyone joining us on the bridge and here today in the boardroom. And thank you very much for your support and appreciate it.


Operator [6]


Thank you. Ladies and gentlemen, that does conclude today's conference call. Thank you for participating. You can now all disconnect.