Ashley Services Rebounds with Record Q1 Revenues After FY25 Setback
Ashley Services reported a challenging FY25 with a 7.3% revenue decline but kicked off FY26 with record quarterly revenues and improved profitability, signaling a strategic turnaround.
- FY25 revenue declined 7.3% to $515.9 million due to project delays and funding cuts
- Net profit after tax (NPAT) for FY25 was $2.17 million with a 0.8 cent dividend declared
- Q1 FY26 revenues hit a record $150.3 million, with EBITDA rising to $3.74 million
- EBITDA margins improved by 1 percentage point in key labour hire sectors
- Strategic progress includes new projects in construction and commercialisation of labour management systems
FY25, A Year of Reset and Challenges
Ashley Services closed the financial year ended 30 June 2025 on a note of stabilisation amid market headwinds. Chairman Ian Pratt outlined how the company faced delays in commencing new projects within its construction, traffic, and engineering divisions in Victoria, alongside reductions in state government funding impacting its training business. These factors contributed to a 7.3% drop in revenue to $515.9 million and a modest net profit after tax of $2.17 million.
Despite the revenue decline, the company maintained shareholder returns, declaring a dividend of 0.8 cents per share, albeit with a lower payout ratio compared to the previous year.
Q1 FY26, Signs of a Strong Recovery
The outlook brightened considerably in the first quarter of FY26. CFO Paul Brittain reported record revenues of $150.3 million, a significant increase from the prior corresponding period, alongside a marked improvement in profitability. Earnings before interest, tax, depreciation, and amortisation (EBITDA) rose to $3.74 million, up $2.9 million, while net profit after tax swung to a positive $1.65 million from a loss in the same quarter last year.
These gains were supported by operational efficiencies and renewed customer contracts, reflecting the company’s ability to adapt and capitalise on market opportunities.
Strategic Momentum and Sector Growth
Managing Director Ross Shrimpton highlighted several key areas driving growth. Labour hire sectors including supply chain, retail, and manufacturing saw EBITDA margins improve by one percentage point, with revenues up 17% year-on-year in Q1. Notably, construction revenues in Victoria surged 61% as new projects commenced and ramped up, reversing the prior year’s decline.
Training services also rebounded with a 12% revenue increase, particularly in rail training and Queensland operations. Additionally, horticulture labour supply grew by 14%, benefiting from seasonal harvesting demand.
Beyond operational performance, Ashley Services is advancing the commercialisation of its proprietary labour management systems, having secured memorandums of understanding with two potential overseas customers. This initiative could open new revenue streams and enhance the company’s technological edge.
Financial Position and Outlook
The company’s banking facilities remain robust, with an acquisition loan fully drawn at $11.1 million and an invoice facility of $25 million available but unused, providing flexibility to support growth. Overheads were carefully managed, with cost savings offsetting inflationary pressures.
While the FY25 results reflected a period of adjustment, the strong start to FY26 and strategic initiatives suggest Ashley Services is positioning itself for a more sustained recovery and growth trajectory.
Bottom Line?
Ashley Services’ early FY26 momentum offers a promising counterpoint to FY25’s challenges, but sustaining growth will require continued execution and market stability.
Questions in the middle?
- Can Ashley Services maintain its improved EBITDA margins across all sectors throughout FY26?
- How will the commercialisation of labour management systems impact revenue and profitability in the medium term?
- What is the outlook for government funding and new project pipelines in Victoria’s construction and training sectors?
