Fund Manager Summary on Verbrec Ltd (ASX:VBC)
Verbrec Ltd (ASX:VBC) has garnered positive sentiment from fund managers, primarily due to its recent transformation into a net cash position and strong financial performance. Following a strong second half of FY25, VBC is expected to harness tailwinds in renewable energy and defence, projecting a revenue increase of over 10% for FY26, supported by strategic initiatives such as the acquisition of Alliance Automation and the successful divestment of its training business. Fund managers note VBC’s expansion potential through its high-margin software product, StacksOn, but caution that market response has been muted despite substantial improvements in balance sheet strength. VBC trades at an attractive valuation, with an implied EV reflective of its operational growth potential, yet risks associated with execution and market conditions persist, necessitating careful consideration for prospective investors.
Commentary From The Managers
There are 10 insights from 2 fund managers regarding their investment in Verbrec Ltd (ASX:VBC) available on Thesis Tracker.
Unlock Updates With ThesisTracker Pro
Don’t let information asymmetry undermine your investment returns. Join other engaged investors on ThesisTracker Pro.
Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
DMX Asset Management
28 Feb 2026
$0.23
Summary
- DMX Asset Management believes Verbrec is an undervalued engineering services company with strong structural tailwinds and continues to hold, encouraged by a strong result, positive guidance, and an undemanding valuation.
- Verbrec's share price rose 24% following a strong financial result and positive guidance for the period ahead.
- The integration of recently acquired Alliance Automation is underway, expanding Verbrec's capabilities and market positioning as an engineering services provider.
- The combined company is gaining market attention for its exposure to electrification and renewable energy, underpinned by multi-year maintenance contracts that provide revenue visibility.
- The balance sheet is strong, with a significant net-cash position supporting both organic growth and potential strategic bolt-on acquisitions.
- Valuation remains undemanding at a single-digit forward P/E, suggesting meaningful upside relative to growth prospects.
Cyan Investment Management
31 Dec 2025
$0.22
Summary
- Cyan Investment Management updates its investment thesis on Verbrec Ltd following recent strategic moves and December’s +33% stock rise.
- Sold non‑core training business for $11.2m in cash, strengthening the balance sheet.
- Acquired Alliance Automation for $5.5m, expanding the company’s engineering services capability.
- Step‑change in scale: combined business now forecast to generate ~ $150m annualised revenue and ~ $9m EBITDA.
- EBITDA upside: expected to accelerate above $12m as synergies are realised and the combined offering gains traction.
- Valuation remains modest: enterprise value of ~ $47m even after December’s price run, suggesting potential further upside.
- Cyan Investment Management continues to hold because the transaction, cash realisation and synergy potential materially improve the company’s earnings and upside prospects.
- Not financial advice: this update is commentary from Cyan Investment Management and is not financial advice.
DMX Asset Management
31 Dec 2025
$0.22
Summary
- DMX Asset Management updates their investment thesis on Verbrec Ltd (VBC).
- Business focus: VBC is a national engineering and infrastructure services business with a primary focus on energy transition.
- Leadership-led turnaround: Since the 2023 appointment of ex-Sedgman CEO Mark Read, DMX highlights an impressive turnaround driven by emphasis on profitable contracts and the sale of non-core assets at attractive prices.
- Strategic acquisition: The accretive purchase of Alliance Automation from Telstra expands VBC’s capabilities in automation, digitisation, machine learning and cyber security, enabling full asset lifecycle delivery and access to a broader range of industries.
- Valuation view: VBC trades on a single-digit earnings multiple, which DMX regards as a significant undervaluation given the company’s scale, diversification and national footprint.
- Recent re-rate: DMX notes that since drafting their UTTR summary in early December the VBC share price rose ~50% through December, with VBC up 48% in December following the Alliance Automation completion, contract wins and strong momentum in energy transition engineering.
- Profitability catalyst: A pattern of non-core divestment followed by strategic, synergistic acquisition is expected by DMX to generate a material uplift in group profitability.
- Risk/defensive factors: DMX highlights VBC’s strong balance sheet and low market valuation as providing downside protection.
- Outlook: Despite the material share price increase, DMX considers the shares to still trade at an attractive multiple with potential for further upside.
DMX Asset Management
30 Nov 2025
$0.16
Summary
- DMX Asset Management reports a significant performance boost from Verbrec, which rose 26% due to its acquisition of Alliance Automation from Telstra.
- The acquisition contributed 0.9% to the overall portfolio performance.
- Verbrec has strengthened its balance sheet through a non-core divestment.
- There are expanding income streams and synergy opportunities following the Alliance acquisition.
- Verbrec is viewed as an attractive investment with a single-digit earnings multiple.
- With a full 5% weighting in the portfolio, DMX Asset Management is well-positioned for potential future gains.
Cyan Investment Management
30 Nov 2025
$0.16
Summary
- Cyan Investment Management initiated a small position in engineering and infrastructure services company, Verbrec (VBC +26%), in September 2025.
- The decision was based on expected turnaround and remarkably attractive valuation (EV/EBITDA ~3x).
- Verbrec specializes in designing, building, and maintaining assets such as gas pipelines, water treatment infrastructure, transport facilities, and electrical control systems.
- The stock experienced a rerating in November following the announcement of an acquisition of Alliance Automation for $5.5m, which is projected to add over $60m in annualized revenues.
- Concurrent with the acquisition, VBC sold Competency Training for A$11.2m in cash, enhancing its balance sheet.
- These strategic transactions are anticipated to enable the company to deliver EBITDA of ~$9m in FY26.
- The fund manager views the sub $50m market cap as an attractive entry point, despite the stock's significant rise during the month.
DMX Asset Management
30 Sept 2025
$0.11
Summary
- DMX Asset Management notes that Verbrec (ASX:VBC) ended FY25 in a net cash position after years of significant debt.
- The recent sale of its training business for $11.5m will further improve VBC’s balance sheet.
- Post-sale, VBC's net cash is expected to reach approximately $13.8m, over 40% of its current market cap.
- This sale allows management to concentrate on core offerings: engineering services, asset management, and operations & maintenance.
- There is potential to deploy surplus cash into complementary acquisitions.
- VBC's work in hand is up 10% compared to six months ago, positioning the company for growth.
- Strong tailwinds in key sectors such as renewable energy and defence are expected to drive this growth.
- At month-end, VBC had an implied EV of $16m and is projected to generate around $8m EBITDA and over $4m NPAT.
- DMX Asset Management continues to hold because VBC is viewed as a very attractively valued business with encouraging growth forecasts for FY26.
DMX Asset Management
31 Aug 2025
$0.10
Summary
- DMX Asset Management notes that Verbrec (ASX:VBC) has resumed dividend payments after a 12-year hiatus.
- VBC has improved its financial position, ending the year with a net cash position after years of significant debt.
- A new leadership team has successfully reset overhead costs and enhanced gross margins and cash flow.
- Strong tailwinds in core areas such as gas, defence, and renewables are expected to drive a 10%+ revenue increase in FY26.
- VBC’s high-margin digital twin software, StacksOn, has potential for global expansion, with BHP as a major customer.
- Despite positive developments, the market response to VBC’s report has been muted, with the share price remaining relatively flat.
- VBC is currently trading at an annualised PE of 4x with a net cash balance sheet and no value attributed to its software product.
- DMX Asset Management believes that VBC’s return to dividend payments makes it an attractive investment heading into FY26.
- There is potential for VBC to at least double its multiple from its current position, especially if it monetizes or sells its StacksOn business.
DMX Asset Management
31 May 2025
$0.07
Summary
- DMX Asset Management continues to hold a positive outlook on Verbrec Ltd (ASX:VBC) as it demonstrates strong profit and cash-flow potential.
- VBC, an engineering contractor focused on renewable and transitional energy, has confirmed a stronger second half after a disappointing first half.
- The company is on track for an $8m EBITDA and $5m NPAT run-rate, despite disruptions from the Australian and US elections affecting client demand.
- Expectations for FY26 are optimistic, anticipating less disruption and stronger performance.
- With a market cap of less than $20m, VBC has approximately $6m in franking credits and $10m of tax benefits.
- VBC is developing an emerging software asset, with BHP as its inaugural customer, indicating growth potential.
- Entering FY26, VBC is trading on a PE ratio of less than 4x, suggesting it is significantly mis-priced.
- DMX Asset Management believes VBC represents compelling value and has the potential to double its market cap while remaining inexpensive.
- Overall, DMX Asset Management is pleased to have become a substantial shareholder in Verbrec Ltd.
DMX Asset Management
31 May 2024
$0.14
Summary
- DMX Asset Management discusses their investment thesis for Verbrec Ltd (VBC), focusing on its role in electrification & energy storage projects and gas market transition.
- These areas are supported by strong tailwinds, particularly from recent government strategies.
- The Australian Government's medium and long-term strategy emphasizes the significance of gas in transitioning to net zero by 2050.
- Gas currently supplies 27% of Australia’s energy needs and represents 14% of export income.
- The government is committed to exploration, investment, and development in the gas sector to prevent supply shortfalls.
- As a primary service provider to the gas sector, this is particularly positive for VBC.
- VBC manages the entire project asset lifecycle, from concepts and design to construction, training, and de-commissioning.
- It is the largest provider of maintenance services for the Santos gas pipeline network.
- VBC is also engaged in emerging battery and energy storage technologies, trialing two long-duration battery storage technologies for the first time in Australia.
- With improving margins and a positive outlook, VBC is positioned for strong growth in new energy projects.
- Stockbroker Veritas Securities highlighted VBC's attractive valuation at 13c, trading at a FY25 PE of 4x.
- The company is predicted to have a forecast EPS growth of approximately 40% over the next two years.
- VBC is deemed the most attractively valued and has the highest forecast earnings growth among similar ASX-listed engineering, construction, and maintenance companies.
DMX Asset Management
30 Apr 2024
$0.10
Summary
- DMX Asset Management identifies similarities between Verbrec Ltd (VBC) and RPM, highlighting VBC's focus on electrification & energy storage projects.
- VBC has experienced significant share price decline, dropping from 25c to 10c over the past three years.
- DMX Asset Management participated in a late-year recapitalization of VBC, reflecting confidence in its potential turnaround.
- The market appears to undervalue VBC, pricing in limited success while overlooking signs of recovery.
- VBC, with revenues over $100m, is undergoing positive changes following a recent CEO transition.
- Improved focus is expected to enhance margins and profitability.
- First half results show encouraging growth, with EBITDA rising from $1.3m to $5m.
- DMX Asset Management believes that continued improvement in profit margins could lead to significant profit increases.
- VBC is seen as a strong candidate for a multiple re-rate if the positive trajectory continues.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Investment Ideas Scanner
Why fund managers back Credit Clear (ASX:CCR) as digital debt collection revenue and EBITDA accelerate
Why fund managers back MA Financial (ASX:MAF): surging AUM, private credit & MA Money
Why fund managers bought Cromwell Property Group (ASX:CMW) after Brookfield cleared ESR overhang
June 2025: Why fund managers backed Pepper Money (ASX:PPM) — 12.5c special dividend signals strong cash generation
Why fund managers back Retail Food Group (ASX:RFG): United Petroleum stake & dividend catalyst
SMN: H2FY25 breakout profits and FAA‑near CVMTM catalyst
Growthpoint Properties Australia (ASX:GOZ): why managers sold for premium office exposure
Why fund managers are watching Coles (ASX:COL) closely as Woolworths narrows the sales growth gap
Why fund managers see BHP (ASX:BHP) as a transformed business as copper overtakes iron ore as its primary earnings driver
Saville Capital exits ASX:FBR, watching Samsung deal
Frequently Asked Questions
Who is investing in Verbrec Ltd (ASX:VBC)?
Fund managers including DMX Asset Management and Cyan Investment Management have invested in Verbrec Ltd (ASX:VBC).
Why do fund managers invest in Verbrec Ltd?
Fund managers invest in Verbrec Ltd due to its strong financial turnaround and growth prospects in renewable energy and defence. With a net cash position after divesting non-core assets, Verbrec is poised for increased revenue and profitability, supported by a competitive PE ratio and newfound dividend payments. Its emerging software asset, expected to expand in FY26, adds further value. The company's low valuation relative to its earnings potential makes it an appealing choice for investors seeking long-term gains.
What happened to Verbrec Ltd (ASX:VBC)?
Fund managers are investing in Verbrec Ltd. (ASX:VBC) due to its recent financial turnaround and strong market positioning. After selling its training business, Verbrec improved its balance sheet to a net cash position of approximately $13.8 million, enhancing its focus on core engineering services. The acquisition of Alliance Automation is expected to significantly boost revenue, adding over $60 million in annualized income. With a projected EBITDA of around $9 million for FY26 and an attractive valuation of about 3x EV/EBITDA, Verbrec is seen as well-positioned for growth in sectors like renewable energy and defense, making it a compelling addition to investment portfolios.
What is the short interest in Verbrec Ltd (ASX:VBC)?
According to ASIC filings, there is negligible or no short interest in Verbrec Ltd (ASX:VBC).
What does Verbrec Ltd (ASX:VBC) do?
Verbrec Ltd. is an engineering and operations services company. It offers services to mining and minerals, hydrocarbons, infrastructure, and other industries. It operates through the Engineering Services and Training Services segments. The Engineering Services segment includes asset management, digital industry, pipelines, power, and process plants. The Training Services segment includes competency training services, which provides on-site training courses at client's own sites, as well as live-streamed virtual training, and the use of virtual reality and e-learning. The company was founded in 1988 and is headquartered in Brisbane, Australia.