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Southern Cross Elec. Eng. (SXE) & IPD Group (IPG)

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Question asked 05/07/2025

Southern Cross Elec. Eng. (SXE) & IPD Group (IPG)

What is the reason that you have SXE on your Emerging Companies hit list and not IPG? Are these companies similar and if not, what are the reasons for your preferring SXE?

Answer

Hi Angela,

A quick glance at the comparative chart in 2025 tells us the companies are performing very differently year-to-date:

IPD Group (IPG): specialises in the distribution of electrical infrastructure products and related services. The company operates a services & products division which for the first-half of FY25 delivered Net Profit After Tax (NPAT) of $13.3 million, up 40% year-on-year. However, while the company continues to report revenue growth in areas like data centers while maintaining a robust order backlog, it’s not transating into as strong earnings growth as SXE which has left to the weak share price.
Southern Cross Elec. Eng. (SXE): primarily an electrical and communication service provider which is principally engaged in offering electrical, instrumentation, communication and maintenance services. While comparable to IPG it has significantly outperformed so far this year having delivered a record-breaking performance in the first half of FY25, driven by strong growth in infrastructure and data centre projects where margins are better: Net Profit After Tax (NPAT) of $16.2 million, was up 67.8% and importantly it upgraded its FY25 EBITDA guidance to at least $53 million, reflecting confidence in continued growth.

We have answered a number of questions on SXE over recent weeks and it remains in the Hitlist of our Emerging Companies Portfolio.

At this stage we prefer SXE over IPG, liking its acquisition of Force Fire and outlook moving through 2025.

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Southern Cross Elec. Eng. (SXE) v IPD Group (IPG)

LAST UPDATED 03/07/2025 16:52

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