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SCIDEV LTD (SDV) - SciDev's Strategic Pivot: Transforming Industrial Water Challenges into Opportunity

• Andrew Musgrave

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Water is our most precious resource, yet industries worldwide face increasingly complex challenges in using it efficiently and responsibly. In this fascinating conversation with Seán Halpin, Managing Director & CEO of SciDev Limited (ASX: SDV), we explore how this Australian company is revolutionising water treatment across multiple sectors with proprietary technologies that deliver both environmental and economic benefits.

Seán reveals SciDev's dual-focused business model spanning Chemical Services and Water Technologies, united by a compelling purpose: solving industry's most complex water problems. The company helps heavy industry reduce fresh water consumption, promote efficient water use, minimise contaminated water production, and repair legacy environmental damage across mining, energy, infrastructure, remediation and defence sectors.

Despite FY25 being what Seán describes as a "pivotal year" with strategic wins rather than dramatic financial growth, the future looks exceptionally bright. With FY26 revenue guidance of $120-140 million, improved gross margins of 28%, and significant contract wins in Q4, SciDev is positioned for substantial growth. Particularly exciting is their CatChek product for the oil and gas industry, which saw 46% year-on-year growth and secured a master services agreement in the Permian Basin.

Perhaps most intriguing is SciDev's FluorofIX technology tackling PFAS contamination—the "forever chemicals" creating environmental havoc worldwide. Seán reveals the European remediation market alone could be worth an astonishing 2-3 trillion USD. With contracts already secured across Australia, Europe and with the US Department of Defense, SciDev stands at the forefront of solving one of our era's most pressing environmental challenges.

Listen now to discover how SciDev is transforming industrial water challenges into opportunities and why this Australian innovator deserves a spot on your investment watchlist.

Andrew Musgrave Host

Welcome again to ASX Briefs, where we speak with the leader’s driving transformation across Australian listed companies. And today we're joined by Seán Halpin, the Managing Director & CEO of SciDev Limited, a technology-enabled water treatment company solving complex industrial challenges across mining, energy, infrastructure, remediation and defense. Seán, thanks for joining me today and welcome to the ASX Briefs podcast. 

Seán Halpin Guest

Thank you very much, Andrew. Thanks for having me. 

Andrew Musgrave Host

Now, Seán, for investors that may be unfamiliar with SciDev, can you just start by giving a brief overview of the company? 

Sean Halpin Guest

Certainly. So at SciDev, our purpose is to deliver innovative solutions to solve industry's most complex water problems. We're a business that's currently split into two operational business segments chemical services and water technologies and each one of our businesses and the technologies we provide help heavy industry reduce the amount of fresh water that they consume and promote the efficient use of water within their core processes, minimize the amount of contaminated water that they produce or repair legacy environmental damage. It's a business, we've got a range of proprietary chemistries and technologies, and we're operating across a number of heavy industrial end markets and currently have a global footprint. 

Andrew Musgrave Host

Okay, now FY25 closed with $103 million in revenue and strong Q4 contract wins. So how do you assess the year overall and what gives you confidence in the FY26 $120 to $140 million guidance? 

Seán Halpin Guest

So when we look at FY25, I think certainly from a management perspective, we see it as a pivotal year inside our growth journey and if you're to take a look at the finances, on first glance that might not shines through because we were largely in line with the results that we delivered in FY24, if not slightly below but, the importantly, we delivered a number of strategically significant wins throughout the period, all whilst continuing to invest in initiatives that will deliver and accelerate future growth. 

So, it's been really a big year for us and I think it's both those things hand in hand both the advancements that we've made for our strategy this year and the investment that we've made that gives us the conviction and that we're going to deliver to that revenue guidance that we've provided in the year to come. Also, on top of that, we've got a significantly well-developed BD pipeline and a really strong order book and continued acceptance of our technologies and chemistries across our growth market. So, a real, I suppose, strong year from a strategic perspective and really setting us up to deliver well into 26 and beyond. 

 

Andrew Musgrave Host

Now, despite a slight drop in EBITDA, you maintained a positive cash position and improved gross margin to 28%. So how are you thinking about profitability and capital deployment moving forward? 

Seán Halpin Guest

That was one of the real wins in 25 was improving the gross margin and I think that talks to our capital allocation strategy and that we've been looking to allocate capital to initiatives and growth initiatives and the type of business that is going to deliver a wide margin for us at a gross level. But importantly, we'll generate free cash allowing us to reinvest that back into future growth and continue on that organic growth cycle. I think, as we look forward to 26, that's largely where we'll be focused is capital allocation. We'll be largely focused on use for working capital to drive us on that organic growth journey going forward. 

Andrew Musgrave Host

Now looking at your CatChek™ product line, which saw a 46% year-on-year growth and landed a master services agreement in the Permian. So how significant is this product to the company's US growth strategy? 

Seán Halpin Guest

So, it's very much a cornerstone of the growth strategy of our energy services division, which sits within a chemical services business.

That business provides proprietary chemistry, specialty chemistry, into US oil and gas, and CatChek™ has been and is a product that really allows us to stand out from the market. 

It's relatively peerless in the market and, in an environment where oil and gas operators are looking to every avenue possible to increase efficiencies in their operations and improve their bottom lines, we're able to provide a product that not only makes them more efficient in their process through and the frac side, but also increases the amount of resource that they're recovering from these oil and gas wells and as well. 

So, from a P&L perspective, for our clients, it's a really compelling offering, and so it's one of a number of innovative products that we're taking to the market, but it's certainly one that's getting a huge amount of attention that we are continuing to put runs on the board against, and I think, looking to the future, we should see incremental growth from CatChek™ sales over the coming sort of months and years as we continue to secure new customers and continue to get new data points and runs on the board, and then we certainly feel that there is an exponential point, a real sort of take-off point from this, and our goal for CatChek™ is that it becomes just a key ingredient in fracking, in US oil and gas in particular, and that oil and gas operators are afraid not to use the product because of the downstream benefits it can provide in production. 

Andrew Musgrave Host

And looking at other projects and contracts. You delivered PFAS contracts in Australia, Europe and now with the US Department of Défense. So, what's the commercial outlook for FluorofIX™, and how large is this market for SciDev? 

 

 

Seán Halpin Guest

It's an enormous market. It's nearly that big that it's crazy for us to be thrown around in sort of times in interviews like this. But if you look at the European market alone, if every site that was contaminated with PFAS that we're aware of in Europe was to be remediated, the current addressable market would be somewhere in the regions of two to three trillion US dollars. So, this is an enormous problem. It's a global problem as well, and it's one that we've been fortunate enough to be able to get some significant runs on the board domestically, because Australia has been very forward facing in terms of the regulation and enforcing the remediation of PFAS. So, from FluorofIX™, perspective, we've got a really market leading offering, both in terms of the performance of the technology but also its sort of economic viability and the cost effectiveness of the technology as well. So, it's a huge market and an absolutely enormous opportunity for us. 

One that during the year we've had some of those really significant strategic wins, with securing our first revenue generating contracts both in Europe and North America. So huge opportunity for us and, from a midterm growth perspective, something that is really going to, you know, carry the business forward. 

Andrew Musgrave Host

Now you've also secured a $5.6 million contract in New South Wales and expanded your BOO/DNC delivery model. So how is the Australian Water Technologies Division positioned heading into FY26? 

Seán Halpin Guest

Exceptionally well. I think that business has been on a really strong growth trajectory over the last couple of years, and with that has come some growing pains, and over the last 12 months we've or in the last financial year- we had to deal with a number of sort of challenging projects that were well, two in particular challenging projects that were a result of those growing pains. 

One was a DNC my own project where we had some challenges with the design, subsequent redesign and retrofit of a plant, and the other was on the build on operate side, which was we had some contractual issues on that front and throughout the year we've bolstered our team to increase our design and construct capabilities, to increase our contract management capabilities within the team and project governance structures within our domestic team as well. And now our domestic water business is going into FY26 with a really strong pipeline BD pipeline both in terms of depth and quality but also the structure and skill set that it needs to be able to, one, convert on these opportunities but two, deliver these opportunities as well. So, 26 will be a return to form year for a domestic water business, certainly return to profitability and, yeah, we're expecting big things from water in 26. 

Andrew Musgrave Host

Okay, and touching on the governance, you recently expanded your board with new appointments, so how is this shaping strategic direction and positioning the company for international expansion? 

Seán Halpin Guest

It's been great to see the development of our board over the past 18 months or so now, and, in terms of shaping strategic direction, I think we've got a really heavyweight board now relative to our market cap. I think the journey that we've been on has been more about refinement of that strategy with our board, in particular over the last number of months. We've got a board that's really functioning well and really engaging well with management and is very supportive of that strategy and that newly refined strategy, but also management's ability to execute. So, yeah, I think we're in a really positive position from a board perspective and looking very much forward to working with our board over the coming years. 

Andrew Musgrave Host

And, lastly, what's the key message you'd like to leave with investors about the company's role in industrial water solutions and what to watch out for in FY26? 

Seán Halpin Guest

I think the key message would be watch this space and I'm going to just loop back again to that piece on FY25 and the strategic advancements that we've made and the strategic investments that we've made to accelerate growth. So, I think what to watch out for is going to be further contract wins, showing the increasing acceptance of our technologies across our markets, showing that we're capitalizing off of the extent of the opportunities that we have across each one of our businesses and, importantly, we're delivering on our strategy. So, from an investor perspective, they're the real indicators that show that we're doing what we say that we're going to do and we're really capitalizing on the opportunities ahead of us. 

Andrew Musgrave Host

Okay, Seán. Well, thanks for joining me today on the podcast. It's been great to chat, and we look forward to further updates from SciDev in the upcoming months. 

Seán Halpin Guest

Anytime, Andrew, thank you. 

Andrew Musgrave Host

That concludes this episode of ASX Briefs. Don't forget to subscribe and we look forward to catching you on our next episode.