SHAPE Australia (ASX:SHA) reported higher revenue, profit and project activity in its half-year FY2026 results webinar for the period ended 31 December 2025, with management pointing to improving margins, continued growth in modular construction and an expanding order book as key drivers heading into the second half.
Financial performance: revenue up 16%, NPAT up 49%
CFO Scott Jamieson said revenue (work performed) rose 16% year over year to AUD 553 million. EBITDA increased 45% to AUD 21.4 million, with EBITDA margin improving to 3.9% of revenue from 3.1% in the prior corresponding period.
Net profit after tax rose 49% to AUD 14 million, while depreciation and interest line items were described as broadly similar to the prior corresponding period. Earnings per share increased 48% to 16.8%. The company declared a dividend of AUD 0.14 per share, up 40% from AUD 0.10.
Order book and pipeline: backlog up 33% and “sea of green” metrics
Management highlighted strong momentum in project wins and future work secured. Jamieson reported project wins of AUD 742 million (up 39%) and explained the company’s internal definition: wins are recorded when a project is secured, while revenue is recognized as work is performed. The difference between secured work and work performed flows into backlog.
Backlog orders rose 33% to AUD 686 million, which Jamieson said positions the company for “continued revenues and stronger revenues in the second half compared to those of the first half.” Identified pipeline increased 18% to AUD 3.8 billion, which management described as tracked, known projects rather than macro estimates.
CEO Peter Marix-Evans emphasized that pipeline exceeds what the company can currently execute, with growth constrained by hiring capacity and a focus on onboarding “good people” at a sustainable pace.
Cash, working capital, and securities
SHAPE reported AUD 136 million in cash and marketable securities, up 6% from the prior corresponding period. Jamieson said marketable securities totaled roughly AUD 30 million at 31 December, invested in “investment grade, highly liquid” corporate bonds to maximize interest income.
He also noted part of the cash balance is restricted due to project trust accounts, project bank accounts, and retention trust accounts in several states. The company’s cash conversion was described as strong, with operating cash flows to EBITDA around 151%. Jamieson said average cash balance increased by about AUD 10 million versus the prior period, and interest earnings were maintained despite an RBA rate decline during the half.
In Q&A, management addressed the change in marketable securities and funding related to the acquisition of Arden Group. Jamieson said marketable securities fell from AUD 40 million to AUD 30 million, with AUD 10 million used for the acquisition and AUD 15 million borrowed. He said the company retained additional cash to maintain working capital ratios required for pre-qualification and external financial assessments.
Strategy and operations: diversification, modular growth, and Arden acquisition
Management reiterated SHAPE’s three “pillars” of strategy: sector diversification, regional growth, and capability expansion. Marix-Evans said the company continues to prioritize its core commercial office market while growing selected non-office sectors to improve resilience across cycles. He cited targeted areas including hotels, entertainment and recreation, retail, industrial and data centres, plus social and institutional sectors such as education, defence, health and aged care, as well as residential accommodation for institutional and public sector clients (more modular-related).
On sector performance, management highlighted improved education revenue, supported by fit-out/refurbishment and modular work in schools (particularly in Victoria). Defence revenue was reported at AUD 18 million, increasing slightly, with Marix-Evans saying defence work is “starting to come back on” following funding shifts associated with the Defence Strategic Review. He also pointed to growth in industrial and data centres, expected to contribute more to second-half revenue, and cited aged care as a growth area, with aged care project wins up to AUD 57.5 million.
In regional terms, management said Victoria improved to 19% of revenue from 17% previously, while growth in newer regional offices (including Gold Coast, Newcastle, Tasmania, Geelong and Townsville) contributed more than AUD 60 million in revenue. Marix-Evans said the company’s ability to transfer resources across regions helps it respond to local market cycles.
Modular construction was a central theme. Marix-Evans said modular revenue growth in the first half exceeded the prior year’s full-year result, driven by expanded production capacity and utilization. In response to questions about ambitions and capacity, he described the Australian modular market as less mature than Europe and the U.S. and said SHAPE expects near-term volatility but sees growth over a five-year horizon as modern methods of construction become more widely adopted. He said the company has expanded its South Australian facility footprint as it outgrew an initial site and recently added extra space, while utilization in Victoria and South Australia has approached peak at times.
Capability expansion also includes growing aftercare and facilities maintenance. Marix-Evans said SHAPE secured a two-year facilities maintenance contract covering eight buildings in Melbourne’s CBD and plans to selectively expand this higher-margin service line.
Management also discussed the acquisition of Arden Group, completed in December 2025. Marix-Evans said the deal strengthens SHAPE’s facilities maintenance and national multi-site rollout capabilities, particularly in fuel and convenience. Jamieson added that Arden has operated for 23 years, employs 80+ people, generates circa AUD 50 million in revenue, and completes 7,000–9,000 maintenance work orders per year. Arden’s gross margins were described as “double” SHAPE’s business-as-usual margins, and Jamieson said Arden’s contribution in the second half could support margin improvement, though Arden will be consolidated rather than reported separately.
Q&A highlights: larger projects, tender conversion, ANZ update, and hiring constraints
During Q&A, management discussed a shift toward larger projects in backlog. Marix-Evans said SHAPE has three projects above AUD 50 million in the order book versus one in the prior period. He said the historical relationship between backlog and next-12-month revenue has typically ranged from about 1.7x to 2.5x (averaging around 2.2x), but the larger-project mix reduces the turnover ratio, potentially bringing it below 2x.
Management also said tender conversion remains strong at just under 50% (as shown in the presentation slide referenced during the call). On the ANZ contract, Marix-Evans said the program has reduced significantly in size and SHAPE was down to the “last three,” expecting clearer direction within about two months. He added that winning would be positive, but losing it would not be expected to materially change the Victorian branch’s performance given the broader pipeline.
On hiring, Marix-Evans said SHAPE’s growth remains constrained by its ability to recruit and retain quality people. The workforce increased 16% to 750, with 29.3% promoted during the period. He said unplanned churn is around 10%, which he described as best-in-class for the construction industry, and noted the company had more than 30 open roles. SHAPE also highlighted 3,000+ hours of training and female participation of 30% (above industry average, according to management).
About SHAPE Australia (ASX:SHA)
SHAPE Australia Corporation Limited, together with its subsidiaries, engages in the construction, fitout, and refurbishment of commercial properties in Australia. It also offers new builds; facade remediation; modular construction; design and build; aftercare and facilities maintenance; and defense projects. The company serves commercial, education, government, retail, hotels and hospitality, defense, and health sectors. SHAPE Australia Corporation Limited was founded in 1989 and is headquartered in Sydney, Australia.
