Jatcorp’s FY2025 Losses Surge $1.9M in H2 as Revenue Drops $39M

Jatcorp’s Challenging FY2025

Jatcorp Limited (ASX, JAT), a producer of supplementary and plant-based food products, has revealed preliminary unaudited guidance pointing to a net loss after tax between $7.6 million and $8 million for the financial year ended June 30, 2025. This marks a notable deterioration from the first half of FY2025, where the company reported a $6.1 million loss, and a significant decline compared to FY2024’s audited results.

The primary driver behind this disappointing performance is a sharp revenue contraction of approximately $39 million. This decline stems largely from the cessation of Jatcorp’s international trading operations and the unexpected suspension of Neurio-branded product sales in China. The suspension follows an adverse interim ruling in ongoing legal disputes related to the Neurio brand, which has materially disrupted the company’s access to one of its key markets.

Financial Impairments and Legal Costs

Compounding the revenue hit, Jatcorp has recorded a goodwill impairment of over $2.3 million and a trade name impairment of $225,000 linked to the Sunnya cash generating unit, reflecting diminished recoverable value due to the China sales suspension. Additionally, the company took a non-cash inventory write-down of approximately $1.4 million, mostly tied to excess stock from the halted Neurio operations.

Legal and professional expenses, while reduced by about $1 million compared to the previous year, remain elevated at $4.1 million. These costs are primarily associated with ongoing litigation surrounding the Neurio brand dispute in China, underscoring the financial strain of protracted legal battles on the company’s bottom line.

Looking Ahead, FY2026 Outlook

Despite the setbacks, Jatcorp is cautiously optimistic about FY2026. Management is focusing on operational restructuring, brand development, and expanding distribution channels to drive recovery. The Moroka brand, in particular, has shown promising momentum with an expanding product range and increasing consumer engagement.

Jatcorp’s principal distributor, H&S International (HK) Co. Ltd., has reaffirmed its commitment to achieving an $11 million sales target for FY2026, representing a 22% increase over FY2025 sales. This target signals confidence in the company’s growth strategy and the potential for margin improvement.

The company plans to provide further details on its FY2026 strategy and operational guidance alongside the release of its audited FY2025 results, which remain subject to final audit adjustments.