Saferoads’ Debt Looms as Road Safety Rentals Sale Settlement Awaits Finalisation

Quarterly Financial Performance

Saferoads Holdings Limited has reported a return to profitability for the quarter ended 31 March 2025, posting an unaudited profit of approximately $103,000. This marks a positive turnaround with a year-to-date profit of $84,000, supported by steady revenue of $2.84 million, virtually unchanged from the previous quarter's $2.85 million. The company attributes this improvement primarily to stringent cost reduction measures, particularly in staff expenses.

Strategic Sale of Road Safety Rentals

During the quarter, Saferoads finalized an Asset Sale Agreement and a Product Supply Agreement with Onsite Rentals Group for its Road Safety Rentals (RSR) business. The sale, subject to several conditions including shareholder approval, which was secured at a recent Extraordinary General Meeting, represents a significant strategic shift. The company’s immediate focus is now on expanding its product sales division, aiming to build a profitable business independent of rental income.

Debt Repayment and Banking Facilities

The proceeds from the RSR sale are expected to enable Saferoads to repay all outstanding bank debts and asset finance contracts, a move that should strengthen its balance sheet considerably. To facilitate the completion of this transaction, the company has secured an extension of its Commonwealth Bank of Australia (CBA) facilities until 31 May 2025. This extension provides the necessary runway to finalise the sale and execute the planned debt repayments.

Cash Flow and Operational Outlook

Despite the positive profit result, Saferoads ended the quarter with a slight negative cash balance of $70,000, offset by unused financing facilities of $755,000, resulting in total available funding of $685,000. The company’s net operating cash flow was positive at $211,000 for the quarter, signaling operational improvements. Management’s focus on cost discipline and the transition away from rental income towards product sales will be critical to sustaining this momentum.

Governance and Related Party Payments

Payments to related parties during the quarter amounted to $211,000, covering salaries and fees for key executives and directors, as well as commercial transactions at arm’s length. The company has maintained transparency in these disclosures, consistent with ASX listing requirements.

Looking Ahead

With the Road Safety Rentals sale nearing settlement, Saferoads is poised to enter a new phase focused on product sales growth and financial consolidation. Investors will be watching closely for updates on the sale completion and the company’s ability to leverage its streamlined cost base to drive sustainable profitability.