Company Interview / SHAPE of things to come after solid FY25

Key points:

Underlying earnings up 26% and revenue up 14% for SHAPE (ASX:SHA)Strong growth in defence and non-office sectorsOffice market rebound, especially in Victoria, predicted to continueRegional expansion and a $4.2 billion contract pipeline support future growth

SHAPE (ASX:SHA) reports a robust performance in FY25, with Peter Marix-Evans pointing to a 26% increase in underlying earnings, reaching $32.7 million. The company also marks a 14% rise in revenue to $957 million and a 32% lift in total dividends, now at 22.5 cents. Marix-Evans attributes this outcome to effective cost management and a diversified project mix. He highlights that SHAPE, established over 35 years ago, has developed three strategic growth pillars: expanding beyond office fit-outs into sectors such as health, education, and defence; geographic growth into regional Australia; and broadening service offerings with modular builds and advanced façade capabilities.

According to Marix-Evans, the defence sector is emerging as a crucial driver, with projects up by 17%. He notes a renewed momentum in Australian Defence Force property investments following the Defence Strategic Review, and projects further increased spending in this area. The office market is also showing signs of recovery, particularly in Victoria, where SHAPE sees a significant uptick in commercial builds expected over the next 18 months.

SHAPE’s contract pipeline stands strong at $4.2 billion, reflecting a 20% increase. Marix-Evans says the company is proactively targeting regional growth, opening offices in Tasmania, Newcastle, Geelong, Townsville, and the Gold Coast to follow clients, especially ASX 100 and 200 companies.