This article is from the Australian Property Journal archive
Global workspace solutions provider Servcorp has posted record first-half numbers, as businesses turned to flexible floorspace options to cater to workers collaborating in-person and spending more time in the workplace.
Underlying operating profit came in $32.8 million, with underlying net profit before interest and tax (NPBIT) at $34.4 million, showing a 19% uplift on the prior corresponding period (pcp). Underlying free cash was up 13% to $40.5 million.
An interim dividend of 14.0c per share was declared, and a final dividend of no less than 14.0c expected. The expected total dividend of no less than 28.0c represents a 12% increase.
Servcorp reaffirmed guidance for FY25, for underlying NPBIT between $61.0 million and $65.0 million, and believes it is tracking towards the higher end of that range, with associated underlying free cash of more than $75.0 million.
“Our strong balance sheet provides the flexibility to pursue strategic and organic expansion in high-potential markets, ensuring long-term value creation,” it said.
“While challenges remain, our adaptability and market responsiveness position us well to capitalize on emerging opportunities. New operations are progressing across various stages of development, reinforcing our growth trajectory.”
Servcorp operated 135 floors in 41 cities across 20 countries as at the end of December.
Underlying operating revenue was up 7% to $10.9 million, and post-tax statutory net profit was up 76% to $34.6 million.
Underlying earnings per security was 31.5c, up 21%.
Lease and occupancy expenses remain the largest component of the cost profile. Costs year-on-year increased by $1.1 million due to additional rental expenses as its global footprint continued expanding, partially negated by the additional incentive obtained through lease negotiation as well as the natural decline of lease interest expense throughout the life cycle of leases.
More than half of the active lease portfolio has more than three years of residual life.
In its Australia, New Zealand and South East Asia operations, mature revenue showed a slight increase to $34.8 million.
“While the growth was modest, it demonstrates the resilience of the regional operations in maintaining stable revenue levels despite market fluctuations,” Servcorp said.
Segment profit remained steady at $8.0 million.
“This consistency reflects disciplined cost management and operational efficiency, ensuring that profitability is maintained even in a flat revenue environment. Servcorp continues to focus on optimizing resources to sustain and improve profit margins,” it said.
There was a small dip in cash earnings to $10.2 million, reflecting normal business fluctuations and investment in growth initiatives.
“Despite this, cash generation remains strong, providing a solid foundation for future expansion and operational improvements.”
