Dartbrook Debt and Contract Risks Loom Despite Alfabs’ Profit Boom
Alfabs Australia Limited reported a robust 242% increase in net profit for FY2025 despite a slight dip in revenue, underpinned by strong operational performance and major contract deliveries. The company declared a final dividend, signaling confidence in its financial position.
- Revenue declined slightly by 1% to $95.7 million
- EBITDA surged 49% to $27.6 million
- Net profit after tax attributable to owners rose 242% to $12.17 million
- Interim and final dividends declared at 1.5 and 1.7 cents per share respectively
- Strong balance sheet with net assets increasing to $64.9 million
Financial Highlights and Profit Growth
Alfabs Australia Limited has delivered a standout financial performance for the year ended 30 June 2025, reporting a net profit after tax attributable to owners of $12.17 million. This represents a remarkable 242% increase compared to the prior year’s $3.55 million, despite a modest 1% decline in revenue to $95.7 million. The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) rose 49% to $27.6 million, reflecting improved operational efficiencies and strong demand in its core segments.
Operational Segments and Contract Wins
The company’s Mining and Engineering divisions both contributed to the profitability surge. Notably, the Malabar Contract, a significant equipment hire and overhaul agreement with Malabar Resources Limited, was fully delivered during FY2025. This contract underpinned much of the growth in the Mining segment and is expected to continue driving revenue and profit in FY2026. The Engineering division maintained steady sales to Tier 1 and Tier 2 contractors, supporting infrastructure projects across Australia.
Balance Sheet Strength and Capital Management
Alfabs strengthened its financial position with net assets rising to $64.9 million, up from $56.7 million the previous year. Property, plant and equipment increased significantly to $84.3 million, reflecting ongoing investment in mining and engineering assets. The company maintained compliance with all financial covenants attached to its borrowing facilities, including those related to the Malabar Contract financing. Working capital management remains a focus, supporting liquidity and operational flexibility.
Dividend Policy and Shareholder Returns
Reflecting confidence in its earnings and cash flow, Alfabs declared an interim dividend of 1.5 cents per share and approved a final dividend of 1.7 cents per share, both fully franked. These dividends mark a clear commitment to returning value to shareholders following the company’s successful ASX listing in mid-2024. The company’s basic earnings per share doubled to 4.25 cents, reinforcing the improved profitability.
Governance and Risk Management
The board continues to emphasize strong governance and risk management practices. Key risks identified include competition, reliance on skilled labour, supply chain volatility, and exposure to the cyclical resources and infrastructure sectors. The company also disclosed a material post-balance sheet event involving Dartbrook Commercial Pty Ltd, a debtor currently under voluntary administration, with $1.05 million owed to Alfabs secured by a parent company guarantee from Australian Pacific Coal Limited.
Outlook and Market Position
While Alfabs refrained from providing explicit forward guidance, the delivery of major contracts and ongoing investments in equipment and capabilities position the company well for continued growth. The board’s focus on operational excellence, capital discipline, and shareholder returns suggests a positive trajectory as the company navigates the evolving mining and engineering landscape.
Bottom Line?
Alfabs’ strong profit growth and dividend declaration underscore its emerging leadership in mining and engineering services, but watch for developments on the Dartbrook debt and contract renewals.
Questions in the middle?
- How will Alfabs manage the recovery of the $1.05 million owed by Dartbrook Commercial amid its administration?
- What are the prospects for renewing or expanding the Malabar Contract beyond FY2026?
- How might labour shortages and supply chain risks impact Alfabs’ operational momentum in the coming year?
