Southern Cross Electrical Launches $165M Capital Raise to Fund Data Centre Growth
Southern Cross Electrical Engineering launches $165 million capital raise as data centre boom drives 33% earnings guidance step-change
Southern Cross Electrical Engineering has launched a $165 million equity raising to fund working capital requirements and future acquisitions, following the announcement of over $150 million in new contract wins and a 33% upgrade to FY27 earnings guidance.
The raising comprises a $150 million fully underwritten institutional placement and a $15 million non-underwritten Share Purchase Plan (SPP). The placement bookbuild price range has been set at $3.85 to $4.00 per share, representing a 4.2% to 0.5% discount to the last close of $4.02 on Friday 12 June 2026. Proceeds will be allocated $100 million to working capital for new awards and $50 million to balance sheet flexibility and transaction costs.
The capital raise was announced concurrently with upgraded FY26 Underlying EBITDA guidance of at least $75 million (up from $72 million in March 2026) and newly initiated FY27 guidance of at least $100 million — a 33% step-change driven by secured data centre, infrastructure, and resources contracts. Management highlighted that FY27 data centre revenue is expected to be approximately 3.0x FY26 data centre revenue, underpinning the multi-year growth trajectory.
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What is an equity placement?
An institutional placement allows a company to issue new shares directly to institutional investors at a set price, typically determined through a bookbuild process. This method is faster than a rights issue and is commonly used when companies need to move quickly to fund growth opportunities or strategic initiatives without taking on additional debt.
The Share Purchase Plan gives existing retail shareholders the opportunity to participate on the same terms as institutions, allowing them to apply for up to $30,000 of new shares free of brokerage, commission, or transaction costs. Companies use placements to fund working capital needs, acquisitions, or strategic expansion while maintaining financial flexibility and avoiding covenant restrictions associated with debt financing.
Following completion of the placement and execution of new debt facilities, Southern Cross Electrical Engineering is expected to have pro forma liquidity (cash and undrawn facilities) of approximately $308.8 million, based on a net cash position of $58.8 million as at 31 December 2025, gross proceeds from the placement of $150 million, and $100 million in new debt facilities.
Over $150 million in new works driving the raise
The capital raise follows the announcement of over $150 million in new contract awards across data centres, infrastructure, and resources sectors. These awards demonstrate Southern Cross Electrical Engineering’s positioning across high-growth data centre construction and recurring resources work.
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Heyday awarded Letter of Authorisation (LOA) for early electrical and communications works for Multiplex at NEXTDC S4 data centre, leveraging the company’s early-stage engagement and advisory role in the project.
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Trivantage supplying Low Voltage skids for a major data centre operator, with manufacturing underway through FY27, supporting the company’s manufacturing expansion strategy.
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Southern Cross Electrical Engineering Electrical secured Rio Tinto Master Construction Agreement (MCA) for Pilbara electrical, instrumentation and controls works, extending an approximately 40-year relationship and providing exposure to Rio Tinto’s recurring sustaining capital pipeline.
The awards provide near-term revenue visibility and support the company’s strategy to deepen its presence in data centres and infrastructure while maintaining long-term resources sector exposure.
The current awards build on prior $75 million contract wins announced in February 2026, which spanned resources, data centres, government infrastructure, and logistics across three states, demonstrating the sustained cadence of new work flowing into the order book.
FY27 EBITDA guidance initiated at $100 million-plus
Management has initiated FY27 EBITDA guidance of at least $100 million, representing a 33% step-change from upgraded FY26 guidance of at least $75 million. The FY26 guidance was increased from $72 million provided in March 2026, which itself was an upgrade from the $65 million to $68 million range announced in August 2025.
The earnings trajectory demonstrates sustained momentum across the business. FY25 actual EBITDA was $55 million, providing a baseline for the multi-year growth outlook. Management stated that FY27 data centre revenue is expected to be approximately 3.0x FY26 data centre revenue, with the earnings step-change underpinned by secured works rather than speculative pipeline.
| Period | EBITDA Guidance |
|---|---|
| FY25 Actual | $55m |
| FY26 (Aug ’25) | $65m – $68m |
| FY26 (Mar ’26) | ≥$72m |
| FY26 (Current) | ≥$75m |
| FY27 | ≥$100m |
The company outlined that the upgraded FY26 guidance is driven by strong second-half performance, while the FY27 guidance is supported by data centre and other awards announced concurrently with the capital raise. Further earnings upside is expected beyond FY27 based on pipeline momentum.
Funding capacity expansion beyond the placement
In addition to the equity raise, Southern Cross Electrical Engineering is expanding its debt facilities and guarantee capacity to support both organic growth and acquisition opportunities. The company has received term sheets from Commonwealth Bank of Australia, with documents expected to be executed by end of June.
The new facilities include a $50 million Revolving Credit Facility and a $50 million Acquisition Facility. Bank guarantee and surety bond capacity has been increased from $150 million to $200 million, providing additional headroom to support larger project wins and multi-site contract execution.
Pro forma liquidity post-raising is expected to reach approximately $308.8 million, comprising $58.8 million in net cash as at 31 December 2025, $150 million from the institutional placement, and $100 million from the new credit and acquisition facilities. This financial capacity positions the company to fund working capital for new awards while maintaining flexibility for strategic acquisitions that offer further geographic diversification or new capabilities.
Data centre structural tailwind supporting multi-year growth
Australian data centre operational capacity is forecast to grow from 1.4 GW in 2025 to 3.2 GW by 2030, representing an approximately 18% compound annual growth rate driven by hyperscale demand and artificial intelligence infrastructure investment. Southern Cross Electrical Engineering has over 20 years of data centre construction experience and was active across eight data centres for six providers during the most recent half.
The company is currently tendering projects worth over $1 billion of potential work for the group, reflecting the scale of the opportunity as capital raised earlier by data centre operators now deploys into construction phase. The multi-billion dollar pipeline supports significant further growth beyond the secured works already announced.
The battery storage sector presents a parallel growth opportunity. Utility-scale storage capacity is forecast to grow from 3 GW in FY25 to 27 GW by FY30, representing an approximately 51% compound annual growth rate as the energy transition drives investment in solar, wind, battery storage, and grid infrastructure. Southern Cross Electrical Engineering recently completed the $250 million Collie BESS project and won the Steel River East BESS project in NSW on Ausgrid’s network, with an active pipeline of battery storage projects supported by its delivery track record across renewable energy projects.
Operational scale-up initiatives
The company outlined three operational initiatives to support the expected workload increase across data centres and other sectors:
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Leadership strengthening: Appointment of Peter Bierton as Chief Operating Officer on the East Coast to support the next phase of growth. Bierton brings experience in scaling operations and will oversee execution across the company’s expanding portfolio.
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Manufacturing expansion: Floor space is more than doubling to over 17,000m², enabling scale-up across key end markets including data centres, infrastructure, and industrial projects. The expansion supports both internal requirements and external sales from Trivantage Manufacturing.
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Funding capacity: As detailed above, new debt facilities of $100 million (comprising a $50m Revolving Credit Facility and a $50m Acquisition Facility, subject to execution of documentation expected by end of June) and increased bank guarantee and surety bond capacity to $200 million provide the financial headroom required to support larger contracts and multi-site execution.
These initiatives demonstrate proactive investment in capacity ahead of the expected workload increase, positioning the company to capture a disproportionate share of the data centre and infrastructure investment cycle.
Diversified order book reduces concentration risk
The company’s order book totalled $710 million as at H1 FY26, with diversification across sectors, disciplines, and geographies reducing single-project concentration risk. By sector, infrastructure represented 65%, commercial 21%, and resources 14%. By discipline, electrical accounted for 72%, fire 13%, manufacturing 10%, and security and communications 5%.
Geographic diversification has increased, with 85% of the order book now on the East Coast, reflecting the company’s strategy to expand beyond its Western Australian roots through acquisitions including Heyday, Trivantage Group, MDE Group, and Force Fire. This geographic footprint aligns with the concentration of data centre and infrastructure investment in New South Wales, Victoria, and Queensland.
Recurring revenue represented $211 million in FY25, accounting for 27% of H1 FY26 revenues. Recurring revenue is generated through services, maintenance, sustaining capital, and framework agreements, providing earnings stability and supporting long-term relationships with blue-chip clients. The company highlighted exposure to Western Sydney Airport, Sydney Metro, hospitals, supermarkets, and ongoing Pilbara resources work as sources of recurring revenue streams.
Key dates for the capital raise
Institutional placement:
- Placement bookbuild: Monday, 15 June 2026
- Placement settlement: Friday, 19 June 2026
- Placement allotment: Monday, 22 June 2026
Share Purchase Plan:
- SPP opens: 10:00am AEST Tuesday, 23 June 2026
- SPP closes: 5:00pm AEST Tuesday, 7 July 2026
- SPP allotment: Tuesday, 14 July 2026
Eligible shareholders with a registered address in Australia or New Zealand can apply for up to $30,000 of new shares under the SPP, free of brokerage, commission, or transaction costs. The SPP price will be set at the same price as the institutional placement, determined through the bookbuild process. The company reserves the right to scale back applications under the SPP or accept applications above the $15 million target.
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Investment thesis — Capitalising on structural tailwinds
The capital raise positions Southern Cross Electrical Engineering to capture a disproportionate share of the data centre and electrification investment cycle, supported by four key factors:
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Capital is being deployed into secured works, not speculative opportunities. The over $150 million in new awards provides near-term revenue visibility, while the company is actively tendering over $1 billion of additional work.
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The 33% earnings step-change to FY27 is underpinned by data centre, infrastructure, and resources contracts. FY27 data centre revenue is expected to be approximately 3.0x FY26 data centre revenue, with the earnings uplift supported by secured contracts rather than pipeline assumptions.
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Pro forma liquidity of $308 million-plus provides flexibility for both organic growth and M&A. The combination of equity and debt funding allows the company to fund working capital for large-scale projects while maintaining capacity for acquisitions that offer further geographic diversification or new capabilities.
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Structural tailwinds in data centres and battery storage support multi-year demand visibility. Australian data centre capacity is forecast to grow at approximately 18% CAGR to 2030, while utility-scale battery storage is forecast to grow at approximately 51% CAGR to 2030, providing a dual growth runway.
The company has a track record of successful integration of acquisitions and organic growth, with revenue increasing from $200 million in FY17 to $800 million in FY25. Five acquisitions have been completed since 2016, expanding the company’s geographic footprint, service capabilities, and client base. The raising supports the next phase of this growth strategy, with management targeting opportunities to deepen its presence in high-growth sectors and broaden its multi-disciplinary offerings.
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