Avada Group Revises FY25 Results, Boosts Tax Benefit and Reclassifies Loan Debt
Avada Group Limited has adjusted its FY25 financial results following audit finalisation, increasing its income tax benefit and reclassifying borrowings, while confirming a strong financial position.
- Income tax benefit increased by $2.038 million, reducing loss after tax
- Reclassification of $1.125 million borrowings from non-current to current liabilities
- Profit/loss and asset allocations adjusted between operating segments after ERP implementation
- No impact on operating revenue or cash flow from operations
- Company confirms strong financial position despite adjustments
Audit-Driven Adjustments
Avada Group Limited (ASX – AVD), a prominent player in Australian traffic management services, has announced material adjustments to its FY25 financial results following the completion of its audited financial statements. These changes, disclosed on 30 September 2025, primarily involve income tax benefits, borrowings classification, and segment reporting reallocations.
Tax Benefit and Profit Impact
The most notable adjustment is a $2.038 million increase in income tax benefit, which has the effect of reducing the company’s loss after tax by approximately $2.04 million to $15.78 million. This adjustment stems from the finalisation of deferred tax calculations after audit, reflecting a more favourable tax position than initially reported in the preliminary results.
Borrowings Reclassification Amid Loan Negotiations
Another significant change involves the reclassification of $1.125 million in borrowings from non-current to current liabilities. This shift relates to principal repayments under Avada’s loan facility with the Commonwealth Bank of Australia (CBA). The company is currently negotiating deferral terms for the repayment clause, which has prompted this reclassification. As a result, net current assets have been reduced, signaling a short-term increase in financial obligations.
Segment Reporting and ERP Implementation
Further adjustments were made to the allocation of profit/loss after tax and assets and liabilities between Avada’s operating segments. These changes were driven by the implementation of new enterprise resource planning (ERP) software, which revealed discrepancies in segment reporting. The company has reallocated items mainly between unallocated categories and cash-generating units to better reflect the true financial position of each segment.
Financial Position and Outlook
Despite these material adjustments, Avada Group emphasises that operating revenue and cash flow from operations remain unaffected. The board has reaffirmed the company’s strong financial position, noting that all adjustments are non-cash in nature. The audited financial statements have been lodged with ASIC and are publicly available, providing transparency to investors and stakeholders.
Avada’s CEO, Donald Montgomery, highlighted the company’s ongoing commitment to accurate financial reporting and operational excellence across its extensive network in Queensland, New South Wales, Victoria, and New Zealand.
Bottom Line?
Avada’s FY25 adjustments clarify its financials but spotlight upcoming loan negotiations that investors will watch closely.
Questions in the middle?
- What are the final terms and timeline for the loan facility deferral with Commonwealth Bank of Australia?
- How will the reallocation of assets and liabilities between segments affect future segment performance reporting?
- Could further non-cash adjustments arise from the new ERP system implementation in coming periods?
