Adrad Holdings Posts $153.1M Sales with 2.8% EBITDA Dip in FY25
Adrad Holdings reported solid FY25 results with revenue climbing 8.9% to $153.1 million, despite a slight dip in EBITDA due to cost pressures. The company boosted its dividend by 18%, reflecting confidence in future growth.
- Sales revenue increased 8.9% to $153.1 million
- Pro forma EBITDA declined 2.8% to $17.7 million amid higher input and employee costs
- Pro forma NPAT rose 2.9% to $7.2 million
- Final fully franked dividend up 18% to 3.48 cents per share
- Strong order book and data centre demand underpin positive FY26 outlook
Robust Revenue Growth Despite Cost Headwinds
Adrad Holdings Limited has released its FY25 financial results, showcasing an 8.9% increase in sales revenue to $153.1 million. This growth was primarily driven by higher sales in Asia, particularly off-highway units, and expanding demand for backup power generation solutions in data centres. The company’s two main segments, Heat Transfer Solutions (HTS) and Distribution, both contributed to this positive top-line momentum.
However, the company faced margin pressures, with pro forma EBITDA slipping 2.8% to $17.7 million. This decline was largely attributed to rising material and consumable costs, exacerbated by a weaker Australian dollar, alongside increased employee wages and enhanced insurance coverage. Despite these challenges, Adrad managed to lift its pro forma net profit after tax (NPAT) by 2.9% to $7.2 million, benefiting from a lower effective tax rate.
Dividend Increase Signals Confidence
Reflecting its solid financial position, Adrad declared a fully franked final dividend of 2.08 cents per share, bringing the total dividend for FY25 to 3.48 cents per share, an 18% increase compared to the prior year. This payout represents 50% of statutory NPAT, underscoring the company’s commitment to returning value to shareholders while maintaining a prudent balance sheet.
Strategic Initiatives and Operational Highlights
On the operational front, Adrad has made strategic moves to strengthen its presence in Asia, including hiring a regional sales director and optimizing its Thailand manufacturing facility. The company has also doubled output capacity at its Lara site to meet growing customer demand. In the Distribution segment, initiatives such as a revamped e-catalogue and a new delivery tracking app have enhanced customer engagement and supported margin improvements.
Inventory levels rose to support ongoing data centre and project deliveries, reflecting a robust order book. Capital expenditure was maintained at $4.2 million, focused on growth and productivity enhancements. Meanwhile, lease liabilities and right-of-use assets decreased due to management decisions on lease extensions and ongoing depreciation.
Outlook – Optimism Tempered by Cost Pressures
Looking ahead to FY26, management remains optimistic about improved business performance, buoyed by a strong order book and expanding data centre demand. The company expects remote power generation projects to further grow its order pipeline in Southeast Asia. Strategic initiatives aimed at cost control and operational efficiency are underway to mitigate ongoing input cost pressures.
Adrad’s ability to navigate these challenges while capitalizing on growth opportunities will be critical as it seeks to sustain momentum in a competitive industrial goods sector.
Bottom Line?
Adrad’s FY25 results reflect solid growth tempered by cost challenges, setting the stage for a pivotal FY26.
Questions in the middle?
- How will Adrad manage rising input costs without eroding margins further?
- What impact will expanding data centre demand have on long-term revenue streams?
- Can operational efficiencies and strategic initiatives offset inflationary pressures in FY26?
