SKS Technologies lands $22m Melbourne data centre contract as project growth continues

Digital transformation specialist SKS Technologies (ASX: SKS) has continued a strong run of project award success, landing a $22 million contract for a Melbourne data centre.

The award by leading construction company Erilyan Projects follows the receipt in November 2023 of a $30m contract from Erilyan for works on an international hyperscale data facility.

SKS’s scope of works under the new contract – which is expected to be completed by June 2025 – includes the fit-out of three data halls within an existing building, with each data hall having a capacity of 4MW.

Revenue boost

Chief executive officer Matthew Jinks said the recent run of contract awards, as well as new opportunities, has boosted the company’s FY25 revenue forecast to approximately $260m.

“The awarding of this second contract with Erilyan underscores the business’s quality of execution on the first project and ability to meet complex project requirements,” Mr Jinks said.

“We take the view with all of our projects that high quality work and a customer focus can lead to further work with the same customer and/or the same site.”

“In continuing to work on the facility, SKS Technologies can enhance operational efficiency by leveraging its existing knowledge of the site requirements and customer preferences.”

Funding in place

The new contract win takes work on hand to $188m, with the project to be funded through existing working capital and bank financing facilities.

Just a day earlier, SKS reported that it had obtained a substantial increase in its CBA bank financing facilities from $14.5m to $21m.

The increase represented a 44.8% rise over the four-month period from May this year, when the facilities were increased from $12m to $14.5m.

Mr Jinks said the rapid increase over a short timeframe mirrors the company’s work-on-hand profile having increased more than fourfold since June 2022.

“With the recent increase in our CBA bank facilities and the exemplary FY24 financial results, the board remains comfortable that the current working capital position can continue to support the current growth plans for the business,” Mr Jinks said.