Ventia Services Group (VNT) – Promising outlook

Ventia Services Group provides infrastructure services in Australia and New Zealand and operates across a wide variety of sectors including Defence bases, telecommunications, water, and the renewable energy sector. Ventia Services was founded in 1956 and is headquartered in North Sydney.‍

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Ventia Services reiterated guidance for net profit growth of 7–10% in CY26 and a dividend payout ratio of at least 75% at its investor day, which boosted Ord Minnett’s faith in its forecasts and the infrastructure services contractor’s prospects. The presentations on the day highlighted the company’s focus on those markets offering higher growth rates and which made up around 60% of its CY25. These segments are as follows:

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1) energy and renewables sector;

2) Australian Defence Force (ADF) work;

3) Digital infrastructure, which holds the usual work for telecommunications companies as well as the booming data centre market; and

4) water.

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Ventia noted costs related to redundancies from some lost defence work and the end of a NSW schools contract would weigh on first-half CY26 results although management was confident its operating earnings margin (EBITDA) would at least match the 8.7% booked in CY25 given efficiency savings and a concentration on winning work in the above-mentioned higher-margin markets. We have raised our forecast for EBITDA margins to 8.8% in CY26 before expanding to more than 9% by CY30 as its business mix improves.

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Post the investor day, we have trimmed our CY26 EPS estimate by 0.7%, while our CY27 and CY28 forecasts rise by 1.6% and 4%, respectively, which leads us to raise our target price on Ventia to $6.10 from $6.05. We maintain our Accumulate recommendation