MyEco Group Posts 2% Sales Growth with 103.8% Surge in Council Channel

Sales Performance Amid Mixed Market Conditions

MyEco Group Ltd (ASX, MCO), a key player in sustainable packaging, posted total group sales of $3.7 million for the September 2025 quarter, marking a 2% increase compared to the prior corresponding period (PCP). This growth was largely propelled by a remarkable surge in the Council and Waste channel, which saw sales more than double, climbing 103.8% year-on-year and 21.7% quarter-on-quarter. The company’s MyEco® branded products also maintained category leadership in major Australian retailers Coles and Woolworths, with Australian sales up 17.9% on PCP.

However, total group sales declined 9.2% quarter-on-quarter, primarily due to the absence of a significant white label order delivered in the previous quarter for the UK’s Home Bargains launch. This created a high comparative base, typical of the post-launch sales cycle where reorder volumes take time to build.

Challenges from U.S. Tariff Policies and Resin Market Volatility

MyEco Group’s growth narrative is tempered by softer resin sales, down 62.5% on PCP, as the company prioritizes production capacity for its own branded products amid volatile resin market conditions. Additionally, recent U.S. government tariff policy changes have impacted both MyEco® Global and white label sales, particularly in the U.S. market. The company views these tariff-related challenges as medium-term and is actively exploring alternative "big box" store markets outside the U.S., such as Mexico and Canada, to mitigate uncertainty.

Operational Restructuring and Margin Improvement

Despite these headwinds, MyEco Group reported a gross margin improvement to 24.2% from 18.5% in the prior corresponding period, reflecting operational efficiencies and a refined sales strategy. The ongoing operational restructure is on track to deliver approximately $2.5 million in fixed cost savings during FY26, a critical step toward achieving positive EBITDA in the medium term.

Net operating cash flow was negative $0.5 million for the quarter, with a healthy cash balance of $2.9 million and no bank debt. The company also maintains an unused $1.0 million financing facility, providing additional liquidity to support growth initiatives.

Regulatory Environment and Product Innovation

Regulatory developments, particularly in New South Wales, are shaping a favorable medium-term demand pipeline. From July 2026, supermarkets, institutions, and hospitality businesses in NSW will be required to implement source-separated food organics waste collection services, with universal household FOGO services mandated by 2030. MyEco Group’s active role in advocating for certified compostable products, including engagement with the Victorian Government on draft service standards, underscores its commitment to shaping supportive policy frameworks.

On the innovation front, MyEco continues collaborations with the Australian Government-funded Solving Plastic Waste Cooperative Research Centre and RMIT scientists to develop advanced compostable resins and films. These efforts aim to broaden applications, especially in food packaging, and generate data to support wider acceptance of compostable alternatives.

Looking Ahead

MyEco Group’s strategy focuses on leveraging growth in Australian markets and council channels while navigating international trade challenges. The company remains vigilant on U.S. tariff impacts but is optimistic about expanding into new global markets. With operational efficiencies underway and regulatory tailwinds gaining momentum, MyEco is positioning itself for sustainable growth and improved profitability.