Advance ZincTek Posts $1.75M Profit Rebound Amid US Sales Surge
Advance ZincTek Limited signals a strong financial turnaround for FY25, expecting a $1.75 million profit before tax driven by increased US sales and strategic operational shifts.
- FY25 sales revenue rises to $10.65 million, surpassing FY24 full-year figures
- Projected profit before tax of $1.75 million, reversing prior year loss
- Closure of Perth facility and relocation of production to Brisbane
- One-off costs include staff redundancies, product development amortisation, and lost major customer impact
- Company remains debt free with $767,095 cash and $2.4 million in trade receivables
Financial Turnaround in Focus
Advance ZincTek Limited (ASX, ANO) has revealed a promising turnaround in its financial fortunes for the current fiscal year. Based on unaudited management accounts, the specialty chemicals company anticipates a profit before tax of approximately $1.75 million for FY25, a marked improvement from the $990,000 loss reported in FY24. This shift is underpinned by a notable increase in sales revenue, which has already reached $10.65 million, exceeding the entire previous year’s sales of $9.53 million.
Operational Changes and Cost Impacts
The company attributes this growth largely to a pickup in sales within the United States and strategic operational changes, including the closure of its Perth facilities and the relocation of production equipment to Brisbane. However, the results have been tempered by several one-off and non-recurring expenses. These include a $121,000 non-cash charge related to staff share issues and redundancies, an $88,000 increase in amortisation tied to completed product development costs, and costs associated with the transfer of production equipment, though the latter remains difficult to quantify.
Additionally, the loss of a major customer for the White Sapphire Matte product has had a tangible impact, reducing sales by $130,000 in FY25 compared to over $1 million in FY24. Despite this setback, the company continues to push forward with product innovation and market expansion.
Product Development and Market Expansion
Advance ZincTek is actively advancing its product pipeline, distributing White Sapphire Matte samples to key U.S. distributors and showcasing sunscreen samples at the New York Society of Cosmetic Chemists Suppliers Day in June 2025. Meanwhile, precursor materials for high purity trials have arrived, with product testing scheduled to commence imminently. These efforts suggest a strategic focus on penetrating new markets and enhancing product offerings.
Balance Sheet and Future Outlook
Financially, the company remains in a solid position with cash reserves of $767,095 and no debt, alongside trade receivables amounting to $2.4 million. The Board is currently evaluating capital management initiatives, with further updates expected at the upcoming Annual General Meeting. Regulatory and tariff conditions remain stable, with no material changes since April 2025, providing a steady backdrop for the company’s ongoing activities.
Overall, Advance ZincTek’s FY25 performance reflects a successful combination of operational restructuring, market focus, and product development, positioning it well for future growth despite some lingering uncertainties.
Bottom Line?
Advance ZincTek’s turnaround sets the stage for critical capital decisions and market expansion in the months ahead.
Questions in the middle?
- How will the loss of the major White Sapphire Matte customer affect future revenue streams?
- What specific capital management initiatives will the Board propose at the AGM?
- Can the new product trials translate into sustainable sales growth in competitive markets?
