Eneco Refresh Faces Regional Sales Challenges Despite Overall Growth
Eneco Refresh Limited reports solid 8% year-to-date revenue growth for Q3 FY2025, underpinned by gains in its water and plastics segments and improved cash flow.
- 8% year-to-date revenue growth driven by Refresh Waters and Plastics
- Refresh Waters achieves 9% quarterly sales increase and profitability
- Refresh Plastics posts positive turnaround despite slow January sales
- Operating costs reduced, contributing to improved profit margins
- Strong cash flow with $4.4 million cash reserves and no new debt
Steady Revenue Growth Signals Turnaround Progress
Eneco Refresh Limited (ASX: ERG) has delivered encouraging financial results for the third quarter ending March 2025, reporting an 8% increase in year-to-date revenue compared to the prior year. This growth reflects the company’s ongoing turnaround strategy, with notable contributions from its Refresh Waters and Refresh Plastics business units.
The Refresh Waters segment led the charge with a 9% increase in quarterly revenue, driven by expanded sales to major retailers and operational cost efficiencies. This segment has now returned to profitability on a year-to-date basis, a significant milestone after several challenging years. Management’s focus on cost control and strategic initiatives appears to be paying off, positioning the water business for sustained improvement.
Plastics Segment Shows Signs of Recovery
While the Refresh Plastics division experienced a slowdown in sales during a quiet January, it still managed to outperform the previous year by 2% year-to-date. The business has undertaken product modifications and redesigns, opening new opportunities and enhancing its bespoke service offerings. This turnaround in the plastics segment is particularly noteworthy given its turbulent recent history and now contributes positively to the group’s overall results.
Operational Efficiency and Cash Flow Strength
Alongside revenue growth, Eneco Refresh has successfully reduced operating costs, including manufacturing, marketing, and staff expenses, which has helped improve profitability. The company reported net positive operating cash flow of $777,000 for the quarter and ended with a healthy cash balance of $4.4 million. Notably, no new financing facilities were drawn during the period, underscoring a stable liquidity position.
Despite these gains, some regional variations were observed, with New South Wales showing a slight revenue decline of 1%, while other states like Victoria and Queensland posted double-digit growth. This mixed regional performance may warrant closer attention in future reports.
Looking Ahead
Chairman Colin Moran expressed confidence in maintaining the positive momentum, emphasizing management’s commitment to delivering a year-end result that significantly improves upon recent years. The company’s strategic focus on operational improvements and product innovation appears to be setting a foundation for sustainable growth.
Bottom Line?
Eneco Refresh’s Q3 results mark a turning point, but sustaining growth across all regions remains the next challenge.
Questions in the middle?
- Can Eneco Refresh maintain its profitability momentum through to year-end?
- What strategies will address the sales slowdown in New South Wales?
- How will product innovation in Refresh Plastics impact long-term growth?
