Highlights

  • SKS Technologies secured A$28 million of early works for the MEL2 hyperscale data centre in Melbourne, increasing its FY27 opening order book to A$312 million.
  • Work on hand has grown from A$39 million in June 2022 to A$312 million in June 2026, representing a compound annual growth rate of approximately 68%.
  • The company’s tender pipeline reached A$1.25 billion in May 2026, with more than A$1 billion linked to data centre opportunities.
  • First-half FY26 revenue increased 13.6% to A$131.75 million, while EBITDA rose 42.9% to A$14.02 million.
  • SKS Technologies shares traded at A$7.28 on 28 July 2026, declining A$0.54 or 6.91% during the session.

SKS Technologies Group Limited (ASX:SKS) continues to benefit from rising demand for data centre infrastructure, with the company expanding its contracted work pipeline through new hyperscale projects.

The electrical and communications contractor has shifted from a smaller commercial services provider into a key participant in Australia’s growing data centre construction market.

The latest A$28 million MEL2 contract adds to an expanding order book, although investors remain focused on whether the broader tender pipeline can convert into completed projects and sustainable earnings growth.

MEL2 Contract Expands FY27 Order Book

On 14 July 2026, SKS Technologies announced a A$28 million early works contract from Built, the head contractor for the MEL2 hyperscale data centre project in Melbourne’s north-west.

The project scope includes:

  • High-voltage utility infrastructure.
  • Underground conduits and pits.
  • Gas-insulated switchgear building works.
  • High-voltage, low-voltage and communications installations.

The contract increased SKS Technologies’ FY27 opening order book to A$312 million.

The company’s work-on-hand growth has accelerated significantly:

  • June 2022: A$39 million.
  • June 2023: A$45 million.
  • June 2024: A$96 million.
  • June 2025: A$200 million.
  • June 2026: A$312 million.

SKS has highlighted a compound annual growth rate of approximately 68% across this period.

Data Centre Demand Drives Expansion

The company’s recent growth has been closely linked to increasing investment in Australian data centre infrastructure.

SKS reported a tender pipeline of approximately A$1.25 billion in May 2026, compared with A$572 million in February 2026.

Data centre opportunities represented more than A$1 billion of the pipeline.

The company has identified strong future demand from cloud computing, artificial intelligence workloads and digital infrastructure expansion.

Australia’s data centre capacity is expected to continue increasing, creating opportunities for specialist electrical contractors involved in power distribution and communications infrastructure.

However, tender pipelines represent potential opportunities rather than contracted revenue, meaning conversion rates remain important.

Understanding SKS Technologies’ Business Model

SKS Technologies provides electrical, communications and audio-visual installation services across several sectors.

The company operates as a subcontractor working with major construction groups rather than directly contracting with end users.

Its activities include:

  • Electrical infrastructure.
  • Data and communications systems.
  • Audio-visual installations.
  • Defence projects.
  • Commercial building projects.
  • Data centre infrastructure.

The data centre segment has become the company’s primary growth driver due to larger project sizes and increased electrical requirements.

SKS has also expanded its capabilities through acquisitions, including Delta Elcom, which strengthened its New South Wales presence.

Financial Performance Shows Earnings Improvement

SKS delivered significant earnings growth during FY25 and the first half of FY26.

FY25 performance included:

  • Revenue of A$261.66 million.
  • EBITDA of A$21.58 million.
  • Net profit after tax of A$14.03 million.

For the six months ended 31 December 2025:

  • Revenue increased 13.6% to A$131.75 million.
  • EBITDA increased 42.9% to A$14.02 million.
  • Net profit after tax increased 52.5% to A$8.81 million.
  • Pre-tax margin improved to 9.6%.

Operating cash flow reached A$27.84 million during the half year, supporting financial flexibility.

Cash stood at A$51.77 million at 31 December 2025 compared with A$32.48 million at June 2025.

Balance Sheet Supports Expansion

SKS Technologies has expanded its financing capacity to support larger project requirements.

In May 2026, the company increased its Commonwealth Bank facilities to A$52 million, including:

  • A$48 million in bank guarantee facilities.
  • A$4 million in equipment finance.

The increased facilities support project delivery requirements, particularly as larger data centre contracts require additional guarantees and working capital.

The company’s growth model is asset-light, with accounting equity remaining relatively small compared with market valuation due to the nature of contracting operations.

Why the Development Matters

The latest MEL2 contract strengthens SKS Technologies’ revenue visibility heading into FY27.

A contractor with a large opening order book has greater certainty compared with businesses relying heavily on new contract wins during the year.

The company entered FY27 with A$312 million of contracted work, providing significant visibility against future revenue expectations.

The broader opportunity lies in converting the A$1.25 billion tender pipeline into additional contracted projects.

However, the quality of future earnings will depend on maintaining margins as the company scales.

Potential Growth Catalysts

• FY26 results expected in August 2026, providing confirmation against revenue and profit expectations.

• Additional awards from the existing A$1.25 billion tender pipeline.

• Further data centre project wins across Sydney and Melbourne.

• Contribution from Delta Elcom expansion.

• Potential main works packages linked to MEL2 beyond the initial early works contract.

Risks and Challenges

Customer concentration remains a key risk for SKS Technologies.

Large data centre projects can represent a significant portion of annual revenue, increasing exposure if projects are delayed or completed.

The company also works under head contractors, meaning payment timing, project variations and construction schedules are influenced by external parties.

Rapid growth requires additional working capital, labour availability and guarantee capacity.

The data centre market also carries valuation risk, as expectations for continued infrastructure spending are already reflected in investor sentiment.

What Investors Should Watch Next

The FY26 result will provide important information on earnings quality and future margins.

Key areas include:

• Full-year revenue and pre-tax profit performance.

• Second-half margin trends.

• Operating cash flow conversion.

• Cash position and guarantee facility usage.

• New contract wins from the data centre pipeline.

Conclusion

SKS Technologies has transformed from a smaller electrical and communications contractor into a major participant in Australia’s data centre infrastructure expansion.

The A$28 million MEL2 contract reinforces its growing order book, while the A$312 million FY27 work-on-hand position provides significant revenue visibility.

However, the next stage will depend on converting a large tender pipeline into profitable contracts while maintaining margins through rapid expansion.

The upcoming FY26 results will provide a clearer indication of whether SKS can sustain its current growth trajectory.