BSA Faces Uncertain Future After Major Contract Losses and Costly Restructuring

Financial Performance Amidst Contract Losses

BSA Limited’s FY2025 results reveal a company at a crossroads. The telecommunications and infrastructure services provider reported a net profit after tax of $3.7 million, down sharply from $10.6 million the previous year. This 65% decline comes despite a 12% increase in revenue to $287 million, highlighting the complex dynamics at play.

The revenue growth was primarily driven by improved volumes and a favourable work mix in fixed line platforms. However, this was overshadowed by the loss of approximately 92% of its revenue following unsuccessful contract renewals, notably the NBN Co Field Services contract and smart metering contracts with Intellihub and Bluecurrent. These contract losses have forced BSA into a significant operational restructuring.

Operational Restructuring and Workforce Impact

In response to the contract losses, BSA undertook a major restructure, incurring $10.5 million in related costs. This included $6.5 million in redundancy expenses and a $1.7 million write-off of right-of-use assets. The workforce was reduced by roughly 80%, with former joint CEOs Arno Becker and Richard Bartley among senior executives who departed. The new leadership team, including CEO Sasho Kacevski and CFO Nanda Herling, is focused on right-sizing the company and improving operational efficiency.

Despite these challenges, BSA’s EBITDA before restructuring costs improved significantly to $31.7 million from $17.8 million in the prior year, reflecting disciplined cost control and operational focus. However, the company anticipates unprofitable trading in the near term as it navigates the transition.

Liquidity and Going Concern Considerations

BSA maintains a robust cash position with $24 million in cash and no drawn debt as of 30 June 2025. The company’s short-term funding facility with Commonwealth Bank of Australia remains undrawn but is expected to be cancelled from October 2025. Additionally, guarantee and bond facilities will require increased cash backing, estimated at around $2.4 million, which has been incorporated into financial forecasts.

The company’s directors acknowledge material uncertainty regarding going concern due to the significant contract losses and restructuring. However, management’s forecasts indicate sufficient liquidity and cash flow to support operations for at least the next 12 months, assuming successful execution of the restructuring and cost control measures.

Strategic Outlook and Market Position

BSA is actively exploring all options to optimise stakeholder outcomes, including leveraging its asset base and cash reserves. The company continues to support existing customers and maintain market-leading delivery standards. Notably, BSA has extended its Foxtel partnership through 2027, with options to 2029, and is expanding capabilities in the emerging electric vehicle charging market.

Health and safety remain a top priority, with significant improvements in key safety metrics during the year. The company also emphasizes diversity and inclusion, maintaining a zero-tolerance stance on discrimination and harassment.

Governance and Leadership Changes

The year saw several board and executive changes, including the appointment of new non-executive directors Warwick Sauer and Paul Heick, and the stepping down of former directors. The remuneration framework continues to align executive incentives with company performance, though no short-term incentives were paid in FY2025 due to unmet KPIs.

BSA’s audited financial statements received an unmodified opinion, though the auditor highlighted the material uncertainty related to going concern.