Veris posts strong September quarter results following operational review

Veris ASX VRS surveying businesses infrastructure
Moving forward, Veris' strategy is to focus on high-value, high-margin surveying projects, and providing digital engineering, data management and geospatial services.

Surveying services company Veris (ASX: VRS) has reported a strong performance for the first quarter of the 2020 financial year, with group revenues of $32.6 million and improved earnings before interest tax depreciation and amortisation.

The EBITDA figures for the company’s Veris Australia business amounted to $2.3 million (unaudited), representing a 27.8% increase on the previous corresponding period.

The positive results come after Veris launched an operational review for the business in light of a decline in EBITDA for the September 2018 quarter.

The review included a number of measures to increase efficiency, improve margins and deliver greater value for shareholders and clients.

Meeting expectations

Managing director Adam Lamond said the strong first quarter performance met with the company’s expectations.

He said the performance was driven by improved margins in the Veris Australia, which are a result of the company’s continued focus on efficiencies and cost reductions.

“The group revenue remains in line with our expectations and we will continue to work towards further margin improvement in the Veris Australia business.”

Surveying acquisitions

Veris said it had made significant progress in strengthening its operational capability following the national integration of nine acquired surveying businesses in 2018 including urban and regional planning advisory services company Elton Consulting.

The $16 million acquisition gave Veris a blue-chip, scalable entry to the sector and further exposure to growth markets on Australia’s eastern seaboard, in particular the development cycle in New South Wales which continues to attract record levels of investment in property and a diversity of infrastructure projects.

“The acquisition of Elton achieves an important strategic priority for Veris,” the company said at the time.

“It significantly expands and enhances [our] service offerings, it enables ‘end-to-end’ solutions for our existing clients from scoping, approvals and planning through to surveying and project implementation [and] it brings new clients and strong relationships with government and blue-chip property and infrastructure companies.”

The first quarter performance of Veris’ communications and managed services subsidiary Aqura Technologies established in mid-2017 was also in line with the company’s expectations.

Looking forward

Veris said a committed forward pipeline for infrastructure investment of over $200 billion fuelled by major new project on the east coast is expected to remain elevated for at least the next decade.

The company is in the process of “re-positioning its service model” to focus on high-value, high-margin surveying projects, digital engineering, data management and geospatial services in order to meet forecast levels of activity.

At midday, shares in Veris were up 19.23% to $0.062.