GenusPlus Expands with Geographe Tree Services Acquisition to Boost Vegetation Management Capabilities

About GenusPlus Group Limited

GenusPlus Group Limited (Genus, the Group, ASX: GNP) is a specialist power and communications infrastructure and services provider operating across Australia. The Group designs, builds, and maintains electrical transmission and distribution networks, substations and battery systems. Applying the Group’s expertise in power networks, it also specialises in delivering integrated efficient and scalable communication networks including fixed and wireless infrastructure. GenusPlus listed on the ASX on 14 December 2020 at an issue price of 96 cents per share.

Vegetation management services acquistion

GenusPlus has announced the acquisition of Geographe Tree Services Pty Ltd which expands GenusPlus’ capability into vegetation management to support the Group’s power network infrastructure maintenance services.

Vegetation management is highly complementary with Genus’ existing broad capabilities for power network infrastructure maintenance and for communications infrastructure maintenance. The Geographe Tree Services acquisition reinforces the Group as the contractor of choice in the domestic energy transmission and communications network sectors from coast to coast across Australia.

GenusPlus will acquire 100 percent of the shares in Geographe Tree Services Pty Ltd (GTS) for $7 million cash. The purchase price will be funded from internal cash reserves. GTS has a vegetation management services contract with a Tier 1 utility provider that provides recurring revenue under a multi-year contract. The contract ensures the safety and reliability of the electricity network by mitigating environmental and safety risks.

GTS generates annual turnover of approximately $13m and the acquisition is expected to be immediately earnings accretive for GenusPlus. Completion of the acquisition is subject to customary conditions of a business purchase of this nature, including material customer consent. Completion is expected to occur in early January 2025.

Strategic acquisitions that drive growth

While continuing to pursue organic growth, GenPlus is also adept at expanding the business by integrating strategic acquisitions. The recently completed CommTel, Pole Foundations Australia, and Partum Engineering acquisitions are other examples of this strategy.

By investing in highly specialised plant and equipment and acquiring specialist capabilities essential for efficient and reliable operations in the energy transmission and communications network industries, GenusPlus has carved out a specialist niche in these two essential services. This speciality focus means that the Group does not have to compete for work solely based on cost. Instead, it readily solves complex problems with compelling solutions to essential industries by having the necessary resources available when and where they’re needed. This improves revenue quality and means that GenusPlus earns higher operating profit margins that deliver superior returns to shareholders year after year.

GenusPlus maintains the financial capability to readily fund these strategic bolt-on acquisitions by currently maintaining a net cash position of $77 million.

Looking ahead

Electrical network infrastructure spending by public and private utility companies throughout Australia over the next 25 years is reliably estimated at $16 billion. This expenditure does not include the maintenance cost of these essential facilities.

GenusPlus, by expanding geographically across Australia and by acquiring specialist capabilities that complement existing services, backed by long-term structural growth tailwinds, is strategically positioned drive earnings higher in the decades ahead.