Southern Cross Electrical Engineering Limited (SXE) AI Stock Analysis

• Market Cap: €475.94M
• Dividend Yield: 2.8%
• Average Volume (3M): 472.97K
• Price to Earnings (P/E): 16.7
• Beta (1Y): 0.47
• Revenue Growth: 49.23%
• EPS Growth: 41.42%
• Country: AU
• Employees: 1,700
• Sector: Industrials
• Sector Strength: 86
• Industry: Engineering & Construction
• EPS (TTM): 0.06
• Shares Outstanding: 264,409,120
• 10 Day Avg. Volume: 465,093
• 30 Day Avg. Volume: 472,970
• PEG Ratio: 0.54
• Price to Book (P/B): 2.51
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.61
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €2.37
• Price Target Upside: 33.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 66 Neutral
• Price Target: AU$2.00 ▲(12.36%Upside)

Southern Cross Electrical Engineering Limited is well-positioned with strong financial performance, reflected in improved profitability and a solid balance sheet. Technical indicators show stability, while valuation metrics indicate a reasonably priced stock with a decent dividend yield. The score reflects a balanced outlook amid competitive industry conditions.

Positive Factors

Pipeline and market position

Awards totaling over $70m for Western Sydney International Airport and Western Sydney Hyperscale Data Centre provide further evidence of strong execution and pipeline conversion.

Strategic acquisitions

SXE acquires Force Fire Holdings, a fire safety solutions provider in NSW & QLD, complementing its electrical, communications, and security offerings.

Negative Factors

Earnings impact

No Impact on FY25 EBITDA Target: FY25 revenue expected to be offset by costs; no change to SXE’s $53M.

Southern Cross Electrical Engineering Limited Business Overview & Revenue Model

Company Description

Southern Cross Electrical Engineering Limited provides electrical, instrumentation, communication, and maintenance services in Australia. It offers electrical and instrumentation (E&I) construction services, which include installation and commissioning of greenfield and brownfield upgrade projects in metropolitan, remote, and challenging environments. The company also provides fixed plant E&I construction; distribution and transmission line installation; substations, transformer, and switchyard installations; HV, LV control, instrument, and communication cabling and terminations; auditing, rectifications, and completions; constructability reviews; primary and secondary injection protection testing; instrumentation, loop checking, and calibrations; hazardous area installations; instrument air and tubing installation; procurement and logistics management; pre-commissioning, completions, and start-ups; and comprehensive handover documentation services. In addition, it offers E&I services and maintenance, such as brownfields operational support, programed and breakdown maintenance, planned shutdown management, and sustaining capital project development services; and in-house design and construct capability, asset life cycle management, hazardous area auditing and verification, procurement, and inspection and testing services. Further, the company provides communications services, including integration and installation of communications technologies comprising communication equipment, data cabling, and fiber optics. It serves mining, and oil and gas; industrial, utilities, and energy; telecommunications and data centers; commercial developments; and public infrastructure and defense. The company was founded in 1978 and is based in Perth, Australia.

How the Company Makes Money

Southern Cross Electrical Engineering Limited makes money through a diversified revenue model that revolves around providing electrical and instrumentation services to its industrial and infrastructure clients. The company's key revenue streams include project-based contracts for the design, installation, and maintenance of electrical and communication systems. SXE benefits significantly from long-term service agreements and recurring maintenance contracts with major players in the mining and energy sectors. Additionally, strategic partnerships and collaborations with other industry leaders help SXE to bolster its market presence and secure large-scale projects, contributing to its financial performance.

Southern Cross Electrical Engineering Limited Financial Statement Overview

Summary

Southern Cross Electrical Engineering Limited exhibits robust financial health with strong revenue growth, improved profitability, and a solid balance sheet with low leverage. Despite a decline in free cash flow growth, the company's consistent cash generation and strong equity position provide a stable financial foundation in the competitive construction industry.

Income Statement

Southern Cross Electrical Engineering Limited has shown strong revenue growth with a 18.8% increase from 2023 to 2024. Gross profit margin improved to 9.32% in 2024, reflecting better cost management. The net profit margin also increased to 3.97%, indicating improved profitability. While margins are improving, competition in the construction industry may pose challenges for sustaining this growth.

Balance Sheet

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.04, indicating minimal leverage. The return on equity improved to 11.47%, showcasing efficient use of equity. The equity ratio of 52.42% demonstrates strong capital structure stability. Overall, the company is well-positioned financially to withstand industry fluctuations.

Cash Flow

The free cash flow growth rate showed a decline of 24.39% from 2023 to 2024, impacting the cash flow score. However, the company maintains a strong operating cash flow to net income ratio of 1.71, indicating good cash generation relative to net income. Despite a decrease in free cash flow, the company continues to manage cash flows effectively.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	693.73M	551.87M	464.71M	553.28M	370.21M	415.10M
Gross Profit	79.91M	82.67M	44.62M	41.94M	24.86M	25.47M
EBITDA	48.21M	40.89M	39.24M	32.78M	29.89M	21.74M
Net Income	28.45M	21.91M	20.09M	15.27M	13.76M	10.87M
Balance Sheet
Total Assets	380.50M	364.76M	318.43M	345.51M	337.24M	261.74M
Cash, Cash Equivalents and Short-Term Investments	114.80M	84.08M	77.65M	53.08M	51.01M	55.27M
Total Debt	7.55M	8.10M	10.42M	10.96M	8.27M	5.97M
Total Liabilities	185.26M	173.59M	136.34M	171.22M	166.06M	103.37M
Stockholders Equity	195.23M	191.16M	182.10M	174.29M	171.17M	158.37M
Cash Flow
Free Cash Flow	73.82M	33.94M	44.89M	26.19M	27.41M	9.52M
Operating Cash Flow	78.89M	37.56M	48.17M	29.67M	29.28M	10.11M
Investing Cash Flow	-10.78M	-15.64M	-8.03M	-12.03M	-23.63M	-5.73M
Financing Cash Flow	-18.30M	-15.50M	-15.57M	-15.56M	-9.92M	-2.36M

Southern Cross Electrical Engineering Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.78
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:SXE, the sentiment is Positive. The current price of 1.78 is above the 20-day moving average (MA) of 1.73, below the 50-day MA of 1.79, and above the 200-day MA of 1.64, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 53.47 is Neutral, neither overbought nor oversold. The STOCH value of 56.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:SXE.

Southern Cross Electrical Engineering Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GNG	80 Outperform	AU$545.57M	14.02	58.99%	6.10%	25.12%	31.13%
CVL	78 Outperform	AU$589.89M	9.98	12.62%	4.31%	15.44%	-4.13%
DUR	74 Outperform	AU$364.70M	16.24	37.07%	2.44%	-1.02%	-7.39%
Sector *	68 Neutral	$2.54B	13.45	7.40%	4.63%	-0.87%	8.24%
GNP	67 Neutral	AU$745.97M	30.80	19.31%	0.60%	35.02%	48.51%
SXE	66 Neutral	€475.94M	16.68	15.15%	2.80%	49.23%	41.42%
LYOPF		$279.51M	9.30	36.14%	1.11%	―	―

Southern Cross Electrical Engineering Limited Corporate Events

SCEE Group Secures Over $70 Million in New Project Awards

Southern Cross Electrical Engineering Limited, through its subsidiary Heyday, has secured over $70 million in project awards for work on the Western Sydney Airport and a hyperscale data center in Sydney. These projects, which include critical infrastructure for airport operations and additional electrical works at the data center, are set to commence immediately and are expected to be completed by 2027 and 2026, respectively. This expansion underscores SCEE’s strategic positioning in major infrastructure developments, promising continued economic activity and employment opportunities in the region.

The most recent analyst rating on (AU:SXE) stock is a Buy with a A$2.00 price target. To see the full list of analyst forecasts on Southern Cross Electrical Engineering Limited stock, see the AU:SXE Stock Forecast page.

Southern Cross Electrical Engineering Issues New Performance Rights

Southern Cross Electrical Engineering Limited announced the issuance of 241,671 performance rights under an employee incentive scheme. These securities are unquoted and subject to transfer restrictions until the end of the restriction period, indicating a strategic move to incentivize and retain employees, which could enhance operational performance and stakeholder value.

Director Increases Stake in Southern Cross Electrical Engineering

Southern Cross Electrical Engineering Limited announced a change in the director’s interest, as Karl John Paganin increased his indirect shareholding by acquiring 27,304 ordinary shares through the company’s Dividend Reinvestment Plan. This acquisition, at a price of $1.7233 per share, raises Paganin’s total holdings to 1,909,501 shares, reflecting his continued confidence in the company’s financial performance and future prospects.

Director Increases Stake in Southern Cross Electrical Engineering

Southern Cross Electrical Engineering Limited announced a change in the director’s interest, with Simon John Buchhorn acquiring additional ordinary shares through participation in the company’s Dividend Reinvestment Plan. This change reflects the director’s increased stake in the company, potentially signaling confidence in the company’s future performance and stability, which may positively impact investor sentiment.

Southern Cross Electrical Engineering to Quote New Securities on ASX

Southern Cross Electrical Engineering Limited has announced the application for the quotation of 139,466 fully paid ordinary securities on the Australian Securities Exchange (ASX). This move is part of a dividend or distribution plan, potentially enhancing the company’s financial flexibility and market presence.