Big River Industries Limited (ASX:BRI) Announces 1H FY25 Results
Financial Performance
Big River Industries reported 1H FY25 revenue of $211.5m, a decrease of 3.3% compared to 1H FY24 and 9.0% on a like-for-like basis. The Gross Profit margin remained flat on a prior corresponding period but improved by 76 basis points compared to 2H FY24, driven by enhanced pricing discipline, supplier consolidation, and an improved sales mix. EBITDA before significant items was $14.8m, delivering a 7.0% margin, down from $20.0m in 1H FY24 but up 17.5% on 2H FY24.
Operating Expenses and Cash Management
Operating expenses increased only 2.9% on a like-for-like basis due to proactive cost-down programs amidst inflationary pressures. The Group maintained a strong financial position with a Working Capital to Revenue ratio of 17.7%, up from 16.6%. An impairment charge of $20.0m related to intangible assets was recognised in the reporting period.
Trading Summary
The Panels division grew 10.7%, driven by the SLQ acquisition, while the Construction division declined 9.2% due to weak residential demand. Both divisions saw sequential revenue and profit growth from 2H FY24, suggesting potential market stabilisation. Regionally, Queensland, South Australia, and Western Australia performed strongly, offsetting softer conditions in NSW, Victoria, and New Zealand.
Balance Sheet & Cash Flow
Total working capital increased by 1.5% to $73.6m, resulting in a working capital-to-revenue ratio of 17.7%. Inventory levels decreased by 1.4% to $71.5m, and debtor days reduced from 39 to 37. Net debt increased by $2.0m, bringing the gearing ratio to 22.8%, remaining well below the Group’s target range.
Dividend Declaration
The Board declared an interim dividend of 2.0 cents per share, fully franked, scheduled for payment on 2 April 2025.
Outlook
The Group remains committed to driving growth in key trade market segments and maintaining workforce development and safety. Market conditions are expected to remain challenging in the short term, particularly in the residential sector. However, improvements in Queensland and New Zealand offer a positive medium-term outlook. The Group plans to continue identifying value-accretive acquisitions and managing supply chain dynamics through strategic initiatives.
Executive Comments
John Lorente, Big River CEO, said: “The Group continues to deliver solid operational results while actively investing in and preparing for future growth. The improvement in profit margins compared to the previous half, despite continued challenging market conditions, is encouraging and validates the hard work the team is doing behind the scenes to streamline the corporate functions and operations of the Group. We remain on track to execute our synergy and efficiency initiatives which we expect will deliver improved performance, whilst continuing to invest in the business and build for sustainable long-term growth.”
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Big River Industries. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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