Multi-disciplinary engineering group EVZ (ASX: EVZ) is experiencing strong demand for its niche services on the back of a record public sector infrastructure investment pipeline and elevated private capex in the transition to clean energy.
Structural tailwinds have resulted in strong new contract wins and given the company’s businesses — namely Brockman Engineering, TSF Power, Syfon Systems and Tank Industries — a contract backlog of $90 million underpinned by new project management processes and offering near-term earnings visibility into the new financial year.
This includes a combined $28.5m in recent contracts to Brockman for the next stage of the United Terminals’ expansion project at the Hastings terminal in Victoria, comprising the addition of two new bulk fuel storage tanks, civil groundworks, and associated balance of plant works, as well as the construction of five bulk storage tanks at Iluka Resources’ Eneabba rare earths refinery project in Western Australia.
Diversified Operating Sectors
EVZ operates across the energy and resources and building products sectors, which are experiencing significant transformation as they adapt to structural trends such as the transition to electrification and renewable energy, population growth, and urbanisation.
The energy and resources division (via Brockman Engineering and TSF Power) – which delivers technical services to the energy, water, mining, and natural resources sectors – is well-positioned to capture opportunities from Australia’s transition toward cleaner energy and the increasing demand for sustainable infrastructure solutions.
In financial year 2025, the division represented 60% of total group revenue and remains a central driver of long-term growth.
The building products division (via Syfon Systems and Tank Industries) – which services the urban and social infrastructure sectors – has operations in Australia and Asia, where exposure to high-growth markets provides an avenue for geographic diversification and revenue resilience.
This segment made up the remaining 40% of total group revenue in financial year 2025, and has shown strong momentum, particularly in Asia where demand for stormwater and drainage systems is expanding with rapid urbanisation.
Tier-1 Client Base
EVZ collaborates with a range of Tier-1 construction firms and developers such as Lend Lease WCT Holdings Berhad for mega-developments in Asia, government and regulatory authorities overseeing strategic infrastructure, and regional subsidiaries and affiliates that help extend its international footprint and enable localisation of expertise.
The company’s skills set covers niche expertise in fuel, water, and renewable infrastructure; integrated service capabilities in design, construction, and maintenance; technical expertise in the specialists areas of siphonic drainage and stormwater management; and established distribution networks across Australia and south-east Asia.
Major competitors include Saunders International (ASX: SND), Clarke Energy (Australia), large-cap engineering firm Monadelphous Group (ASX: MND), Decmil Group (recently acquired by Macmahon Holdings, ASX: MAH), and UGL (owned by CIMIC Group).
A fragmented Australian mechanical services market — valued at more than $2 billion —offers EVZ significant scope for bolt-on mergers and acquisitions or joint venture arrangements to scale up its operations.
The company has identified several potential acquisitions in Australia that could each add up to $30m in annual revenue, and a host of opportunities in south-east Asia that could unlock another $15m in incremental revenue by 2028.
EVZ aims to increase its controlled entities from four to around 10, expanding capabilities and driving opportunity to cross-sell services.
Specialised Inputs Key
The success of EVZ’s operations depends on specialised inputs such as high-grade steel for bulk storage tanks and pipe networks; engineering components and electrical systems for integrated infrastructure projects; and prefabricated and bolted water tanks.
Strong supplier relationships are also critical—particularly for Brockman’s fuel and water projects where quality, safety and reliability standards are essential.
The company relies on its ability to secure materials and equipment on competitive terms to support its margin improvement initiatives.
EVZ manages its sommodity input price volatility through hedging and contractual pass-through clauses, and also employs dual sourcing from Asia and domestic mills to mitigate risks.
FY25 Financial Breakdown
EVZ reported FY2025 revenue of $108m—down 9.2% on the previous year and broadly in line with its guidance of between $108m and $110m.
Group EBITDA for the year was up 8.5% on the previous year to $5.3m, while EBITDA margins expanded to 4.9% from 4.1%.
The improvement follows a significant upward move in the building products division, where operational synergies expanded margins to 13.1% (from 9.3%), while margins in the energy and resources division dropped from 4.2% to 3.6%.
Normalised net profit after tax (NPAT) was up 1.8% to $1.24m after the group absorbed a $340,000 increase in finance costs on the back of higher lease liabilities, while reported NPAT was down 42.2% on the previous year’s $2.14 million.
EVZ’s operating cash flow for the period increased 178% on the previous year to $5m, and net assets increased to $34.6m from the previous year’s $32.9m, while the company had a closing cash balance of $10.6m at end June, with $6m in lease liabilities and no debt.
Management has confirmed its focus for the next 12 months will be on margin expansion through disciplined contract selection and cost control, along with securing recurring revenues via new products and service lines to reduce the reliance on one-off contracts.
