Simonds Faces Integration Costs but Eyes Growth from DFH Deal
Simonds Group reported a stable $665.6 million revenue for FY25, with normalised net profit after tax surging 90% to $5.7 million, driven by the acquisition of Dennis Family Homes and improved margins.
- 90% increase in normalised NPAT to $5.7 million
- Stable revenue at $665.6 million despite market softness
- Acquisition of Dennis Family Homes expands Victorian footprint
- EBITDA rises modestly to $24.0 million despite $6.2 million one-off costs
- Strong liquidity position with $47.7 million available
Steady Revenue and Profit Growth
Simonds Group Limited (ASX – SIO) has released its FY25 financial results, revealing a year of strategic progress and operational resilience. The company reported revenue of $665.6 million, essentially flat compared to the previous year, underscoring stability in a challenging residential construction market. While reported net profit after tax (NPAT) fell to $1.0 million, this figure was heavily impacted by one-off transaction and integration expenses related to the acquisition of Dennis Family Homes (DFH).
When adjusted for these costs, Simonds achieved a striking 90% increase in normalised NPAT from continuing operations, rising to $5.7 million. This improvement was driven by higher gross margins and operational efficiencies, reflecting the company’s disciplined focus on profitability amid evolving market conditions.
Strategic Acquisition Expands Market Reach
The acquisition of Dennis Family Homes, completed in February 2025, marked a significant milestone for Simonds. This move materially expanded the Group’s Victorian display footprint and diversified its home design offerings. The integration of DFH’s jobs under construction and forward order book provides a solid platform for growth heading into FY26.
CEO and Executive Chair Rhett Simonds highlighted the acquisition’s immediate financial benefits and its role in strengthening the company’s capacity to scale sustainably. The expanded product range and market reach position Simonds well to capture demand shifts, particularly towards smaller lot and medium density housing solutions, which are gaining traction amid affordability challenges.
Operational Efficiency and Cash Strength
Despite incurring $6.2 million in one-off transaction and integration costs, Simonds managed to modestly improve its EBITDA to $24.0 million. This was underpinned by favourable gross margin performance and improved operational productivity. The company also delivered strong cash conversion, with cash on hand increasing to $23.3 million and total liquidity standing at $47.7 million, including undrawn banking facilities.
The balance sheet reflected the acquisition’s impact, with increased intangible assets due to goodwill and provisions related to warranty and employee obligations. However, the Group’s focus on rebuilding its net asset position remains a priority, as evidenced by the decision not to declare a dividend for FY25.
Outlook – Positioned for Sustainable Growth
Looking ahead, Simonds remains optimistic about the residential construction market’s modest recovery, supported by increased land sales in Victoria and anticipated easing of interest rates. The company’s investment in medium density housing capability aligns with shifting customer preferences towards affordable, smaller lot homes.
Ongoing government initiatives aimed at boosting affordable housing demand are expected to create further opportunities. The integration of DFH is projected to unlock additional cost efficiencies and revenue growth, reinforcing Simonds’ strategic momentum as it enters FY26.
Bottom Line?
Simonds’ FY25 results set a foundation for growth, but the market will watch closely how DFH integration and housing demand evolve in the year ahead.
Questions in the middle?
- How quickly will cost synergies from the DFH acquisition materialise?
- What impact will ongoing housing affordability pressures have on Simonds’ medium density strategy?
- When might the company consider resuming dividend payments amid rebuilding net assets?
