Big River Reports 4.9% Sales Decline but Margins Hold Firm

Performance Snapshot

Big River Industries Limited (ASX – BRI) has released its latest trading update and company presentation ahead of its 2025 Annual General Meeting, revealing a nuanced picture of its current market position. The company reported a 4.9% decline in group sales year-to-date compared to the prior corresponding period, yet noted that revenue trends are stabilizing, supported by resilient gross margins and disciplined cost management.

Despite a challenging environment, particularly in the residential sector, Big River’s gross profit margin improved slightly to 26.2%, reflecting effective pricing strategies and supply chain efficiencies. The company’s FY25 results showed a modest 2.3% revenue decline and an 11.9% drop in underlying EBITDA, though the second half of FY25 marked a return to year-on-year EBITDA growth, driven by operational improvements.

Regional Market Dynamics

Residential activity remains subdued in key markets such as New Zealand, New South Wales, and Victoria, with the company citing ongoing softness in housing demand. Conversely, Queensland and Western Australia continue to deliver strong performance, buoyed by resilient trade demand and a solid commercial project pipeline. South Australia also showed steady demand despite some site delays, while Victoria is beginning to show early signs of improvement.

The commercial segment faced headwinds from heavy rainfall on the East Coast in August, which temporarily disrupted activity. However, Big River emphasized that the underlying project pipeline remains robust, supporting steady commercial demand across key regions.

Strategic Focus and Outlook

Looking ahead, Big River anticipates the residential market will remain soft through the early part of FY26, with a modest recovery expected later in the year as interest rates ease and housing demand strengthens. The company plans to continue growing market share in differentiated, higher-margin product categories such as bespoke panels and lightweight cladding.

Operationally, Big River is focused on improving margins through pricing discipline, product mix optimization, and supplier alignment. The rollout of its enterprise resource planning system is 75% complete, supporting improved efficiency and pricing consistency. The company also maintains a disciplined capital allocation approach, with an eye toward selective, value-accretive acquisitions to drive future growth.

Big River’s leadership highlighted the company’s lean and resilient platform entering FY26, underpinned by strong cash conversion and stable gearing at 20.1%, which provides flexibility to pursue strategic opportunities while maintaining financial discipline.

Building for the Future

Since 2017, Big River has completed 15 acquisitions, expanding its capabilities and geographic reach. The company has streamlined its workforce and consolidated key sites to improve scalability and operational discipline. Investments in safety, cyber resilience, and leadership development are also part of its strategy to strengthen governance and position the business for sustainable growth.

While the housing market remains a key variable, Big River’s diversified footprint and focus on higher-margin segments provide a buffer against cyclical softness. The company’s outlook suggests cautious optimism, balancing near-term challenges with strategic initiatives designed to capture growth as market conditions improve.