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In a turbulent day for the S&P/ASX All Ordinaries Index (ASX:XAO), which is down by 0.29%, SRG Global Ltd (ASX:SRG) is making waves with its impressive performance. While nearly half of the top 500 companies within the index are grappling with declines, SRG Global’s stock has soared by 8.9%, reaching 94.5 cents per share.
The sharp uptick in SRG Global’s share price follows the company's successful AU$60 million institutional placement. Announced in conjunction with SRG Global’s acquisition of Diona, a leading service provider in water security and energy transition, this capital-raising effort has significantly bolstered investor confidence.
The fully underwritten placement saw the issuance of approximately 72.3 million new ordinary shares at 83 cents each, surpassing the initial AU$60 million target. The overwhelming support from institutional investors reflects strong faith in SRG Global's strategic vision and the anticipated benefits from integrating Diona into its operations.
David Macgeorge, SRG Global’s managing director, expressed gratitude for the robust backing, emphasizing the strategic and financial advantages of the acquisition. He noted, “We are extremely pleased with the strong support received from both our longstanding and new institutional investors, which confirms confidence in our strategic vision and underscores the significant strategic and financial benefits of acquiring Diona.”
The capital raised will be combined with a new secured loan and existing cash to fund the AU$111 million acquisition of Diona. This strategic move is expected to enhance SRG Global's capabilities in water security and energy transition, contributing to its long-term growth.
Today also marks the first trading session for SRG Global’s shares since it entered a trading halt following the release of its FY24 financial results. The results were stellar, showcasing significant growth across key metrics:
- Revenue surged by 32% from FY23, reaching AU$1,069.3 million.
- Underlying EBITDA increased by 23% to AU$98.5 million.
- Total dividends for FY24 rose by 13% to 4.5 cents per share.
- Net profit after tax (NPAT) grew by 27% to AU$40.3 million.
In addition, SRG Global's Work in Hand has reached AU$3 billion, positioning the company for sustainable growth in various sectors including water, defence, resources, transport, and energy transition across Australia and New Zealand.
Management has also raised FY25 EBITDA guidance to AU$125 million, reflecting a full-year contribution from Diona. This optimistic outlook and strategic expansion are likely contributing to the current surge in SRG Global’s stock price, setting a positive tone for the company’s future.
