The proliferation of data centres has boosted Southern Cross Electrical Engineering shares to a fresh high, despite a disappointing arbitration loss earlier this month.
The company today announced it had added some $90 million to its works book across two major projects in Sydney.
The Perth-founded firm has been chosen, through subsidiary Heyday, to install low-voltage switchboards, busways, generators, UPS systems, cable, LV reticulation, lighting and general power systems at REIT's SYD1 data centre.
Located less than one kilometre from the centre of the Sydney CBD, SYD1 is one of New South Wales best connected carrier neutral co-location data centres.
The contract forms part of works being undertaken by SHAPE Australia to lift SYD1's capacity from its current 26-megawatts to 88MW.
Heyday previously completed major electrical works at SYD1, when the site was known as Global Switch in 2014, and again in 2017.
The latest works are expected to be complete in Q2 2026.
At the same site, Force Fire has been awarded the fire services contract and Trivantage Manufacturing a contract for supply of electrical switchboards and generators.
Both companies at SCEE Group subsidiaries.
Heyday has also been awarded the contract for electrical and communication systems at the St Mary's Sydney Metro Station on the Western Sydney Airport line.
Those works are for installation of complete communication services, electrical and switchboards; supplied by Trivantage under a consortium-wide agreement.
The station works are expected to begin immediately and finish by Q1 2027.
SCEE Group managing director Graeme Dunn said both the data centre and rail transport sectors had been strong growth sources for the business.
"I note that in both this particular data centre facility and on the Sydney Metro infrastructure development generally, we have done significant volumes of work previously and so to secure these new works is a testament to the quality of our past delivery," he said.
"I also observe that on both of these developments we are drawing on multiple disciplines from across the group, which not all of our competitors are able to match.
"This of course benefits us as we are able to get more out of each project, but I believe also benefits our clients as we are able to deepen our relationships with them and better co-ordinate delivery across disciplines to them."
The contracts will be welcome news for SCEE shareholders after a turbulent past month.
That included an unsuccessful arbitration bid against the CPB Dragados Samsung Joint Venture to recover $22 million in additional costs incurred during the firm's works on the WestConnex M5 motorway tunnel in Sydney.
Arbitration commenced on December 2, 2024, and was related to works on the underground tunnel originally anticipated for completion in November 2019.
Project scope changes, SCEE says, were to blame for that project not achieving completion until mid-2020 at significant extra cost to Heyday.
In a statement to shareholders explaining the arbitration result, the firm said the outcome had "fundamentally turned" on the interpretation of time-bar provisions.
"Heyday expected from the conduct and actions of CDSJV during the course of its works that the time-bar provisions would not be strictly enforced," the statement said.
"Heyday also believed it had good arguments that the time bar provisions in the contract would not be held to effective and that the merits of its claims were otherwise sound, such that it was right to bring these proceedings.
"Unfortunately the arbitrator has disagreed with this interpretation and found that the time-bar provision had to be strictly applied to Heyday's claims."
The arbitrator dismissed Heyday's claims, and ordered a sum paid to Heyday under security of payment processes, totalling$15 million, be repaid to CDSJV.
That led to a revision of the Group's FY26 earnings guidance from between $65-68 million to between $21-24 million.
Following the arbitration loss, SCEE Group chair Karl Paganin said significant changes to the processes and procedures of the group, particularly to its commercial management, had been implemented to avoid repeated failures in the future.
"The Board is extremely disappointed with this outcome but notes that this matter is one-off in nature, concerns events that took place approximately six years ago, and the ongoing business is unaffected with underlying FY26 EBITDA, excluding the impact of the arbitration, expected to remain in line with our previous guidance," he said.
"The board anticipates in FY27 the Group will return to its normalised profitability with the buoyant data centre and renewables sectors offering considerable potential for further growth."
Shares slid 6.7 per cent following that arbitration update to $2.23 per share, but have recovered off the back of the recent contract wins to reach a fresh two-month high of $2.44 per share.
It builds on strong results for FY25, in which net profit increased 44 per cent to a record $31.7 million.
That was off the back of a 45 per cent jump in revenue to another record of $801 million.
That financial year included the acquisition of east coast, fire safety contractor Force Fire Holdings for an enterprise value of up to $53 million in April.
Synergy’s 500-megawatt battery energy storage system at Collie was highlighted as a major contributor to the growth in revenue.
SCEE has been awarded over $200 million of work on the project.
Other significant revenue contributors were Western Sydney International Airport, the Shoalhaven Hospital redevelopment in NSW and NEXTDC’s SYD03 data centre in Sydney.
The group was awarded a substation package at the Alkimos desalination plant in WA.
Its commercial division has works underway with Coles and Woolworths while its resources division has various ongoing works for BHP, Rio Tinto, Sino Iron and Newmont.
