How Will Shriro’s New US Distributor and BBQ Innovations Drive Growth?

Strategic Transition Amid Revenue Pressure

Shriro Holdings Limited (ASX – SHM) has delivered a mixed but ultimately encouraging FY25 result, with revenue falling 13.6% to $103.3 million. This decline reflects the company’s deliberate shift from wholesaling to importing BBQs in Australia, alongside subdued discretionary spending that dampened both export and domestic watch sales. Despite these headwinds, Shriro’s earnings before interest, tax, depreciation and amortisation (EBITDA) rose 5.5% to $15.3 million, comfortably beating market expectations.

The company’s net profit after tax (NPAT) also improved by 8.7% to $7.5 million, helped by the absence of one-off restructuring costs that weighed on the prior year. This suggests that Shriro’s strategic realignment is beginning to bear fruit, even as top-line pressures persist.

Cost Discipline and Capital Returns

Operating expenses fell 18.5% to $31.2 million, a reflection of the company’s exit from the Australian Appliances business and ongoing restructuring in its Seasonal segment. The implementation of a new ERP system, which went live in December 2024, incurred $1.4 million in costs but is expected to streamline operations going forward.

Shriro’s balance sheet remains robust, with net cash of $13.9 million at year-end, down from $24.3 million the previous year due to a $15 million share buy-back and $4.5 million in dividends paid. Notably, the Board has chosen not to declare a final dividend for FY25, signaling a potential shift in capital allocation strategy as it explores alternative uses for cash that could deliver greater shareholder value.

Growth Prospects and Market Expansion

Looking ahead, Shriro is optimistic about FY26, forecasting EBITDA growth driven by several strategic initiatives. The appointment of Blaze Grills, part of the US BBQGuys group, as its distributor for Seasonal products in the United States marks a significant pivot towards expanding its international footprint. While short-term revenue visibility is clouded by uncertain tariffs on Chinese-made goods, the new distribution model is expected to reduce costs and enhance profitability.

In addition to geographic expansion, Shriro is innovating within its BBQ product line, introducing a world-first four-burner BBQ and expanding its portable range with a dual-burner model and a portable pizza oven powered by handheld gas canisters. These product developments have garnered positive retailer feedback and are anticipated to fuel sales growth.

The company is also shifting its growth strategy away from acquisitions toward building a broader portfolio of brands, including becoming the exclusive distributor of Manhattan Portage from September 2025. While these new brands may not materially impact FY26 results, they are expected to contribute positively from FY27 onwards.

Capital Deployment and Shareholder Returns

Despite earnings per share gains following the recent buy-back, Shriro’s share price has not fully reflected this improvement. Consequently, the Board is reconsidering a second $5 million buy-back approved at the last AGM, weighing whether alternative capital deployment options might better serve shareholder interests. This cautious approach underscores the company’s focus on strategic capital management amid evolving market conditions.