Veris Ltd Company Profile
ASX:VRS

In the box seat for additional high-margin revenues, supported by infrastructure spending tailwinds.

Veris, which achieved over $120m in revenues last financial year, will continue to pursue high margin opportunities from tier 1 customers.

  • Company
    Veris Ltd
  • Website
  • Sector
    Professional Services
  • Industry
    Research & Consulting Services
  • Code
    ASX:VRS
  • Socials

Company Overview

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Veris is a national surveying, geospatial, professional advisory and technology company, operating two wholly owned subsidiaries:

  • Veris Australia, which is engaged in providing surveying, 3D spatial and geospatial services, and;
  • Aqura Technologies, which provides ICT and technology services.

Veris provides multi-disciplinary services to tier-1 clients across the infrastructure, industrial, property, mining and commercial sectors.

Veris is currently focused on generating higher margin work, particularly across the 3D spatial and geospatial sectors. Veris intends to achieve this by by leveraging its existing nationwide footprint and diverse in-house capabilities via its Veris Australia subsidiary.

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Leveraging a Nationwide Footprint

Veris is in the box seat to benefit from the anticipated boom in infrastructure spending which is expected to reach $600bn over the next 15 years, as well as the growth in demand for its digital and spatial services.
Future Growth

Veris Australia is aiming to capture additional high-margin organic revenue from the growth of geospatial services including BIM workflows.

On Track

Veris Australia recently showed evidence of EBITDA margin improvement on Q1 FY2020, hitting 9.9% (~35% uplift PCP) at $2.3m in revenue.

Momentum

Aqura Technologies EBITDA in FY19 grew by over 100% year on year with significant work in hand for FY20.

Geospatial Listed Peers

Veris provide high-margin digital and spatial services which comprised 17% of the A$125.9m in revenue it generated last financial year. Significantly, Aerometrex Ltd (ASX:AMX, Aerometrex), which focuses on LiDAR scans, aerial photography and 3D modeling listed on the 10th December 2019 after successfully raising $25m in an oversubscribed IPO at an initial A$95m market capitalisation. Aerometrex revenue for FY18/19 was reported to be A$16m.

Revenue Growth

The combined Veris Limited group (Veris Australia, Aqura Technologies) has continued to successfully grow revenues year on year. This has been achieved via a combination of organic growth and acquisitions. Aqura Technologies has strong future earnings visibility with work in hand equivalent to last financial year. Furthermore the company's net debt position has since been strengthened from the sale of Elton Consulting, which is expected to bring in ~A$13m.

Latest Presentation

Click here to read the company's latest presentation

Strong Advisory Board

Veris Australia has preeminent professionals within the business that are recognised industry leaders across the spatial and surveying industry. These professionals represent Veris and the surveying and spatial industry on several state and national boards such as Consulting Surveyors National.

Boom in Infrastructure

Industry experts believe that up to A$600bn is needed over the next 15 years to modernise aging infrastructure and support Australia's growing population.

BIM Workflow Growth

Queensland recently mandated BIM for all major infrastructure works worth over A$50m, with the potential for other states to follow suit. Veris is in an enviable position to capitalise on the growth of BIM workflows, given its technical in-house knowledge and expertise in geospatial, land surveying, 3D laser scanning and 3D data modelling.

BIM Video

Click here to watch the 1888 Heritage Scan to BIM model compelted by Veris

Earnings Resilience

Veris provide its suite of services across a wide array of industries, including across the residential, commercial, industrial, infrastructure and mining sectors. This diversification provides Veris with added protection against a down-turn in any particular industry.

Diversified Client Base

Veris service tier 1 clients across multiple sectors across the nation, with a growing focus on digital & spatial services.
Clock icon Information current at 10 December 2019

Company Videos

3 Videos

Analyst Commentary

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Long term potential for further revenue growth and margin expansion

Erik Bergseng CFA®
Written by Erik Bergseng CFA®
Published Sep 29, 2019

We believe Veris is a potential long-term opportunity for investors which has arisen due to short-term concerns about its surveying division’s margins. It is our view that this is a distraction from the longer-term potential that the company has which is to become a national leader in a diversified array of services including town planning, high margin geospatial services, communications and other professional services.

In addition, unlike many companies in this market capitalisation range, Veris has the benefit of already having a significant revenue base, which was ~A$120m p.a. as per the last financial year. Because of this relatively large revenue base, even an incremental improvement in existing margins in surveying could produce a material improvement in the group’s total EBITDA.

Further to this, we believe that the new Veris Group is more diversified than it was historically as a result of the Elton Consulting acquisition. The continued growth in higher-margin business segments and activities such as geospatial could also help increase margins for the Veris group over time. Diversification of revenue streams will also provide Veris with earnings resilience in the face of any downturn in any sector or region.

Key risks include, but are not limited to, the company's debt facilities which mature in November 2020 and the relatively low barriers to entry in surveying which may continue to pressure margins.


The information within this section has been provided by Mawson Graham and is for general information purposes only and is not intended to reflect any recommendations or financial advice. The information in this section has been prepared without taking into account your objectives, financial situation or needs. For this reason, you should consider the appropriateness of the advice or recommendation in light of your own personal circumstances, relevant risk factors, the nature and extent of your risk of loss, as well as the legal and accounting consequences before acting making an investment or trading decision regarding any Financial Product mentioned herein. While it is believed that all information sourced and contained within this section to be accurate at the time of publication, liability for any errors, omissions, accuracy or completeness of the information (except any statutory liability which cannot be excluded) is specifically excluded by Mawson Graham, its associates, officers, directors, employees and agents. Past performance is not a reliable indicator of future performance. Important Disclosure: Mawson Graham, its directors, associates and employees advise that they may hold securities, may have an interest in and/or earn brokerage, investor relations fees, corporate fees, and other benefits or advantages, either directly or indirectly from client transactions arising from any information mentioned within this section and in documents published within this section.
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