How Is AVADA Group Steering Through Revenue Slump and NZ Losses?
AVADA Group reported a 10.5% revenue decline in FY2025 amid operational consolidation and leadership changes, while conducting a strategic review of its New Zealand operations. Despite setbacks, the company remains cautiously optimistic about future growth.
- Revenue declined 10.5% to $183.1 million in FY2025
- Underlying EBITDA fell to $12.8 million from $18.8 million
- New Zealand operations posted an $11.8 million loss including a $9.7 million write-down
- Leadership refreshed with new CEO, CFO, and strategic roles
- Group consolidated 11 businesses under AVADA Traffic brand and implemented a single ERP platform
A Year of Consolidation and Challenge
AVADA Group Limited’s 2025 financial year was marked by significant transformation amid a challenging market environment. The company successfully integrated eleven Australian businesses into a unified operating platform under the AVADA Traffic brand, aiming to streamline operations and enhance client service. This consolidation was supported by the rollout of a single enterprise resource planning (ERP) system, designed to provide consistent data insights and reduce costs across its network.
Despite these operational improvements, AVADA faced headwinds from severe weather events, including Tropical Cyclone Alfred, and delays in government infrastructure projects that impacted revenue streams. The company reported a 10.5% decline in revenue to $183.1 million and a drop in underlying EBITDA to $12.8 million, down from $18.8 million the previous year.
New Zealand Operations Under Scrutiny
One of the most significant challenges came from AVADA’s New Zealand business, which suffered an operating loss of $11.8 million. This included a substantial $9.7 million write-down reflecting the weak economic outlook in the region. In response, the Group undertook a strategic review considering all options, including potential sale or closure of the New Zealand operations. Management restructuring and cost reductions have been implemented locally, with the Board maintaining support for ongoing improvement plans.
Leadership and Financial Position
Leadership changes were a key feature of the year, with Donald Montgomery appointed CEO in April 2025, Ben-Louis Ludik joining as CFO in May, and Rhys Attwood taking on the role of Executive General Manager for Strategic Execution and Operations. These appointments signal a renewed focus on operational and financial discipline. Meanwhile, Managing Director Dan Crowley shifted focus towards business development, aiming to strengthen client relationships and revenue growth.
Financially, AVADA reduced borrowings by $6.2 million to $35.3 million, reflecting efforts to strengthen the balance sheet amid the turbulent year. The Board also saw changes with the resignation of two non-executive directors, but no new appointments are planned, maintaining a lean governance structure.
Looking Ahead with Cautious Optimism
AVADA’s outlook remains cautiously optimistic. The company highlights a positive market environment driven by substantial planned infrastructure investments across Australia and New Zealand. However, it acknowledges ongoing risks such as project delays, pricing pressures, weather disruptions, and trade union activity. The Group’s ongoing transformation and scale position it as a leading traffic management provider, with a strong emphasis on safety and client service as competitive differentiators.
As AVADA continues to navigate these complexities, the market will be watching closely how effectively the company executes its improvement plans and manages the future of its New Zealand operations.
Bottom Line?
AVADA’s 2025 was a year of tough lessons and strategic resets, setting the stage for a critical turnaround phase ahead.
Questions in the middle?
- Will AVADA proceed with selling or closing its New Zealand operations?
- How quickly can the new leadership team reverse the earnings decline?
- What impact will ongoing infrastructure project delays have on near-term revenue?
