Big River Reports $211.5m Revenue, 17.5% EBITDA Growth Half-on-Half

Revenue and Profitability Trends

Big River Industries Limited (ASX: BRI) released its half-year results for the period ending 31 December 2024, revealing a nuanced performance amid a softening market environment. The Group reported revenue of $211.5 million, a 3.3% decline compared to the prior corresponding period (pcp), and a 9.0% decrease on a like-for-like basis excluding the SLQ acquisition. Despite this top-line contraction, the company’s EBITDA before significant items stood at $14.8 million, down 26% year-on-year but up 17.5% compared to the second half of FY24, suggesting operational momentum is building.

The gross profit margin remained stable relative to the prior year but improved by 76 basis points from the previous half, driven by disciplined pricing strategies, supplier consolidation, and a more favourable sales mix. These factors underscore management’s focus on margin enhancement even as revenue pressures persist.

Market Dynamics and Segment Performance

The results reflect ongoing challenges in the residential construction sector, particularly in New South Wales and Victoria, where demand softness impacted the Construction division, which saw a 9.2% revenue decline. Conversely, the Panels division experienced a 10.7% revenue increase, buoyed by the SLQ acquisition and growth in bespoke panel products. Regional performance was mixed, with Queensland, South Australia, and Western Australia showing strength, while New Zealand’s market outlook improved following recent interest rate cuts.

Big River’s strategic emphasis on differentiated market segments, including commercial projects and medium-density housing, helped offset some residential softness. The company’s investment in pricing training and operational efficiencies appears to be paying dividends, as evidenced by sequential revenue and profit growth from the prior half.

Balance Sheet and Cash Flow Management

Financial discipline remains a cornerstone of Big River’s approach. The Group maintained a strong balance sheet with a working capital to revenue ratio of 17.7%, slightly higher than the prior year but within target ranges. Inventory levels were carefully managed, and debtor days improved from 39 to 37, reflecting tighter credit control. The gearing ratio increased modestly to 22.8% due to asset financing but remains comfortably below the company’s threshold, preserving flexibility for future growth initiatives.

Cash conversion was robust at 78.4%, supporting the Board’s decision to declare a fully franked interim dividend of 2.0 cents per share, signaling confidence in ongoing cash flow generation despite market headwinds.

Impairment and Strategic Outlook

In response to the prolonged downturn in the housing market, Big River recorded a non-cash impairment charge of $20 million against intangible assets. While this impacts statutory profit, management emphasizes that it does not affect operational cash flow or the company’s strategic trajectory.

Looking ahead, Big River remains committed to its growth strategy, focusing on organic expansion, acquisitions, and unlocking synergies through system integration projects like the Fusion ERP rollout. The Group anticipates continued market challenges in the short term but is optimistic about medium-term prospects, particularly in Queensland and New Zealand, supported by demographic trends and government housing initiatives.

Operational initiatives such as supplier consolidation, pricing discipline, and workforce development are expected to underpin margin improvements and sustainable growth. The company’s active pursuit of value-accretive acquisitions further positions it to capitalize on evolving market opportunities.