McPherson’s Faces $11M Write-Downs Amid Transformation and China Market Pressures
McPherson’s Limited anticipates FY25 revenue around $139 million with a strong second-half EBITDA rebound, while its strategic shift to third-party wholesalers sets the stage for significant EBIT gains in FY26.
- FY25 revenue expected at approximately $139 million
- Underlying EBITDA forecast between $7.0 and $7.5 million, with strong 2H25 momentum
- Transition to third-party wholesaler and logistics model substantially complete
- Non-cash impairments of $9–11 million related to Dr LeWinn’s brand challenges
- Projected $4.0 to $5.0 million annual EBIT benefits from FY26 operating model
FY25 Financial Performance Amidst Market Challenges
McPherson’s Limited has provided an update on its financial performance for the fiscal year ended 30 June 2025, revealing an expected revenue figure close to $139 million. Despite a tough trading environment, four of its five core brands, Manicare, Lady Jayne, Swisspers, and Fusion Health, delivered year-on-year revenue growth, with Fusion Health leading at over 10% growth. However, the Dr LeWinn’s brand faced headwinds, particularly in China, resulting in an 8.4% revenue decline overall, though it showed modest growth in Australia and New Zealand during the second half.
EBITDA Recovery and Cash Position
The company expects underlying EBITDA to land between $7.0 and $7.5 million for FY25, with a notable improvement in the second half where EBITDA is forecasted at $5.0 to $5.5 million, up from $2.0 million in the first half. This recovery aligns with McPherson’s strategic reset, including headcount reductions and reshaped cost structures. Importantly, McPherson’s maintains a positive net cash position of $8.8 million as of 30 June 2025, underpinning its financial stability during this transition.
Transformation to a New Operating Model
Central to McPherson’s update is its shift from a direct-to-store distribution approach to a third-party wholesaler and logistics model. Contracts with major pharmacy wholesalers, Sigma, Symbion, and Clifford Hallam Healthcare, are now live, supported by Excel Logistics as the third-party warehousing provider. This transformation, substantially completed in FY25, is expected to unlock annual underlying EBIT benefits between $4.0 and $5.0 million starting FY26, exceeding earlier guidance and enabling further brand and customer investments.
Impairments Reflect Competitive Pressures
The update also discloses significant non-cash intangible asset impairments estimated between $9.0 and $11.0 million. These impairments primarily relate to Dr LeWinn’s brand, reflecting ongoing intense competition in the Chinese facial skincare market and the need for increased brand investment in Australia and New Zealand. While these write-downs weigh on reported earnings, they align with McPherson’s strategic focus on long-term brand health and market positioning.
Looking Ahead to FY26 and Beyond
With the new operating model firmly in place, McPherson’s is poised to capitalise on improved efficiencies and scale benefits in FY26. The company plans to release its audited FY25 results on 27 August 2025, which will provide further clarity on the transformation’s financial impact. Investors will be watching closely to see how the company balances ongoing brand investments with operational gains amid evolving market dynamics.
Bottom Line?
McPherson’s transformation gains traction, but brand challenges and impairments signal a cautious path ahead.
Questions in the middle?
- How will McPherson’s manage competitive pressures in China’s skincare market moving forward?
- Can the new operating model sustain the projected EBIT uplift beyond FY26?
- What specific brand investment strategies will McPherson’s deploy to revive Dr LeWinn’s growth?
