GALE Pacific’s FY25: Revenue Falls 1.2%, Net Loss Hits AU$5.2M Amid US Challenges
GALE Pacific reported a slight revenue dip and a net loss in FY25, driven by US market challenges including tariffs and weak consumer demand. The company is now overhauling its US operations and diversifying manufacturing to restore profitability.
- FY25 revenue declined 1.2% to AU$172 million
- Net loss after tax of AU$5.2 million amid US tariff and consumer headwinds
- Americas revenue down 11.3%, with a 25% drop in the second half
- Australia/New Zealand and Developing Markets showed revenue growth
- Comprehensive US operating model reset and manufacturing diversification underway
FY25 Financial Overview
GALE Pacific Limited, a global leader in technical fabrics, released its FY25 results showing a modest revenue decline of 1.2% to AU$172 million and a net loss after tax of AU$5.2 million. Despite a resilient performance in Australia/New Zealand and developing markets, the company faced significant headwinds in the Americas, its largest market, due to geopolitical uncertainty, elevated tariffs, and weakened consumer confidence.
Regional Performance Highlights
The Americas region experienced an 11.3% revenue decline for the full year, with a sharp 25% drop in the second half as tariffs on Chinese imports and subdued consumer spending took their toll. However, GALE managed to grow its commercial architectural shade segment for the third consecutive year and expanded retail placements despite these challenges.
Conversely, Australia/New Zealand posted a 7.6% revenue increase, buoyed by strong coated fabric sales for grain storage and record retail sell-through at Bunnings during the peak summer period. Developing markets also delivered a robust 14.4% revenue growth, driven by architectural shade projects in the Middle East and expanded distribution in Europe and Asia.
Cost Pressures and Operational Challenges
GALE’s profitability was impacted by $5.4 million in non-recurring costs related to its Microsoft Dynamics 365 ERP rollout and executive transitions, alongside a $2.1 million foreign exchange expense due to a stronger US dollar. Net debt rose sharply to AU$8.9 million, reflecting elevated working capital needs amid slower-than-expected sales in the Americas.
Strategic Reset and Outlook
CEO Troy Mortleman acknowledged the tough trading environment, particularly in the US, and outlined a decisive reset of GALE’s American operations. This includes simplifying structures, cutting costs, and aligning the cost base with current market realities to restore profitability and sustainability. Additionally, GALE is accelerating efforts to diversify its manufacturing footprint away from China, with trial production in Southeast Asia already underway for key products.
While near-term relief from tariff-driven input costs is not expected, these strategic moves aim to position GALE for long-term growth despite ongoing geopolitical and economic uncertainties. The company plans to provide a detailed update on these initiatives at its upcoming Annual General Meeting.
Bottom Line?
GALE’s FY25 results underscore the urgent need for operational agility as it navigates US market headwinds and manufacturing shifts.
Questions in the middle?
- How quickly can GALE’s US operating model reset translate into improved profitability?
- What are the risks and timelines associated with diversifying manufacturing outside China?
- Will tariff pressures and consumer weakness in the US persist into FY26 and beyond?
