Oldfields Cuts ATO Debt by $0.8M Amid $18.5M Sales Pipeline in Q3

Strategic Transformation Gains Traction

Oldfields Holdings Limited (ASX: OLH) has continued to make meaningful strides in its ongoing turnaround during the third quarter of FY2025. Following a strategic realignment initiated in June 2024, the company exited its hire and service operations on Australia's East Coast, pivoting sharply towards a leaner, sales-driven model focused on distribution. This shift has allowed Oldfields to optimise resource allocation and deepen customer engagement, particularly in South and Western Australia where operations remain stable.

While transition-related expenses and a prior product recall impacted cash flow in earlier quarters, Q3 saw these effects ease considerably. The company reported strong local sales momentum, supported by scaffold system sales and the disposal of ex-hire assets, although growth was limited by inventory availability and seasonal factors. These developments have contributed to an improved financial position in the first half of FY2025, setting a foundation for further gains in the second half.

Financial Performance and Debt Management

Oldfields recorded a net cash inflow of $0.66 million from operating activities in Q3, despite a $1.35 million decrease in customer receipts compared to the previous quarter. Notably, the company successfully reduced its long-term Australian Taxation Office (ATO) debt by $0.796 million during the quarter, funded through trading working capital and proceeds from ex-hire scaffold sales exceeding $1.5 million. This debt reduction is a critical milestone in improving the company’s financial health.

Capital raising efforts have also supported liquidity, with $1.039 million raised through new share issuances in Q1 FY2025. Oldfields continues to pursue additional funding opportunities to further reduce debt and replenish working capital, which remains constrained due to prior recall impacts and non-payment issues with its US distributor.

Robust Sales Pipeline and Market Demand

The company’s sales pipeline remains strong, with annuity opportunities totaling $9.7 million and one-off opportunities amounting to $8.8 million year-to-date. This reflects sustained domestic and international demand for Oldfields’ scaffold and paint products. The anticipated conversion of these pipeline opportunities into sales and long-term contracts will be pivotal in driving revenue growth and operational stability in the coming quarters.

Oldfields is also investing in inventory replenishment and capitalising on ex-hire system scaffold sales to support working capital needs. However, the company acknowledges that working capital restrictions will likely impact Q4 results, with new orders expected to arrive in June 2025.

Outlook and Strategic Focus

Looking ahead, Oldfields expects to maintain positive momentum through the remainder of FY2025. The company’s increasingly efficient sales and distribution framework, combined with improved inventory management and capital injections, is expected to strengthen financial stability. The focus remains on sustaining profitability, expanding market share, and enhancing long-term value creation.

Oldfields’ management highlights the importance of converting its strong sales pipeline and continuing to optimise operational efficiencies. The company’s secured financing facilities totaling $8.474 million, provided by Pure Asset Management, underpin its capacity to support ongoing transformation efforts.

Overall, Q3 FY2025 marks a significant step in Oldfields’ turnaround journey, demonstrating tangible improvements in financial performance and positioning the company for sustained success in a competitive industrial products sector.