Southern Cross Electrical Engineering : 2022 Anual Report

Annual Report 2022

Southern Cross Electrical Engineering Limited ABN: 92 009 307 046

ASX:SXE

Contents

2022 Highlights	3
Chairman's Report	4
About SCEE Group	6
Feature Projects	8
Our Sectors	10
Sustainability	18
Managing Director's Review	20
Directors' Report	24
Remuneration Report	30
Financial Statements	36
ASX Additional Information	86
Corporate Directory	88

Gudai-Darri Iron Ore Mine

Pilbara, WA

SCEE Electrical

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In 2022 SCEE Group has delivered a year of record revenue and profitability

Trivantage Manufacturing Sheetmetal Workshop Melbourne, VIC

Trivantage Manufacturing

2022 Highlights

RECORD REVENUE

$553.3m

UP 49.5%

RECORD EBITDA

$35.3m

UP 19.3%

TOTAL FY22 DIVIDENDS

5.0cps

UP 25%

CASH

$53.1m

AND NO DEBT

RECORD ORDER BOOK

$565m

Record workforce peaked at 2,000 employees

Recurring revenues grown circa 30% of activity

Trivantage exceeding forecasts achieving full earn-outtargets

Integration activities progressed co-locationand cross-groupproject delivery

Acquisition targets

being explored

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Chairman's report

It gives me great pleasure to report on a record- breaking year for the SCEE Group.

2022 saw the highest activity levels in our history delivered by our largest ever workforce. Revenue of $553.3m was up nearly 50% on the prior year, whilst EBITDA of $35.3m was also a record for the Group.

This growth in revenue was driven in large part by activity in the resources sector returning to high levels in the current year. This more than compensated for the subdued activity in parts of our business as coronavirus and adverse weather impacted the east coast, particularly in the commercial sector. Our strategy of growth through diversification has significantly reduced our reliance on any single source of revenue and the events of this year highlight the increasing robustness of our Group.

The FY21 acquisition of Trivantage contributed a full year of revenue in FY22 and continues to outperform expectations, delivering profits in excess of earn-out targets. The addition of the Trivantage businesses to the Group has been a large contributor to the volume of recurring services and maintenance works growing to almost a third of our revenue in 2022.

The Board remains committed to targeting further acquisitions aligned with our diversification strategy.

I have been pleased to see a progression of our integration initiatives this year. These included utilising capabilities across the Group's businesses to secure and deliver projects, cross-selling of services within the Group and the co-location of our businesses in Western Australia. I believe we can derive significant further gains in this area going forward.

The Board has resolved to pay a final fully franked dividend of 4.0 cents per share and paid a fully franked interim dividend of 1.0 cents per share in April. The full year dividends of 5.0 cents per share is an increase of 25% on the prior year and demonstrates the Board's commitment to growing shareholder returns. On behalf of the Board I would like to take this opportunity to thank shareholders for their continued support.

Finally, I would like to congratulate management and employees across the Group on their achievements during the year. The Board recognises the significant work involved in delivering these record results and thanks them for their commitment.

Derek Parkin

Chairman

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About SCEE Group

Southern Cross Electrical Engineering Limited ('the SCEE Group') was founded in 1978 and listed in 2007 (ASX:SXE). Over that time, we have grown to be a leading national electrical, instrumentation, communications and maintenance services group of businesses. The acquisitions of Datatel in 2016, Heyday in 2017 and the Trivantage Group, which includes the businesses of Trivantage Manufacturing, S.J. Electric and SEME Solutions in 2020, means the SCEE Group is now diversified across three broad sectors of infrastructure, commercial and resources.

SCEE Electrical is the original operating business, historically focussed on resources and industrial projects, but more recently diversified into transport, infrastructure, defence, utilities, and renewables.

Datatel is a telecoms and communications specialist and provides services to the education, health, government, resources and transport sectors.

S.J. Electric is a national provider of electrical and maintenance services to supermarkets, and the retail, commercial and water sectors.

Heyday is a NSW and ACT-based electrical contractor undertaking commercial building construction and fit-outs, and servicing the office, retail, hotel, high-rise residential, education, health, transport, industrial and data centre sectors.

SEME Solutions provides electronic security services to the resources, law-enforcement, custodial, industrial, and health sectors.

Trivantage Manufacturing is a leading manufacturer of packaged electrical solutions including premium quality switchboards, kiosk substations and switchrooms, covering low to high voltage capabilities across the infrastructure, resource and commercial, sectors.

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