Given delays in contracts and weather interruptions, SND has downgraded FY25 guidance softening the near-term outlook for Ebitda by ~40%. We note that the contracts are not lost and have moved “right” in the timeline, thus provide upside to our forecasts in the medium-term. We view the A$30m acquisition of Aqua Metro (~4x Ebitda) as a positive, further expanding SND into the water sector. Given the outlook of Revenue of A$135m and Ebitda of A$11.0m from Aqua Metro in FY26, we see the acquisition as medium-term earnings accretive. We keep a positive view on the longer-term outlook across all sectors, particularly water and defence.
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