How Is Oldfields Overcoming Working Capital Limits to Drive FY2026 Growth?
Oldfields Holdings reports constrained Q4 FY2025 sales due to limited working capital but signals a positive growth outlook for FY2026 following its strategic transformation and capital support.
- Exited East Coast hire and service model to focus on sales and distribution
- Q4 sales limited by working capital restricting inventory replenishment
- Raised $1.039 million in capital during Q1 FY2025 and secured additional loans
- Strong sales pipeline with $19.8 million in annuity and one-off opportunities
- FY2026 growth expected through improved operations and external funding
Strategic Realignment and Operational Focus
Oldfields Holdings Limited (ASX – OLH) has continued its transformation journey in the fourth quarter of FY2025, following a strategic realignment initiated mid-2024. The company exited its hire and service operations on the East Coast, pivoting towards a leaner, sales-driven model focused on sales and distribution. This shift aims to optimise resource allocation and enhance customer engagement, particularly in South and Western Australia where operations remain stable.
Despite strong demand for its paint and scaffold products, Oldfields faced significant challenges in Q4 due to limited working capital carried over from Q3. This constraint hampered the company’s ability to replenish inventory, directly impacting sales volumes. The sale of ex-hire scaffold stock continued but slowed as available saleable products diminished.
Financial Performance and Capital Management
Financially, Oldfields reported a modest net cash inflow of $0.14 million from operating activities in Q4, supported by customer receipts of $6.2 million; a slight increase from the previous quarter. However, profitability was pressured by low cash collections from ex-hire scaffold sales and restricted working capital limiting inventory purchases, particularly in paint.
To bolster its financial position, Oldfields successfully raised $1.039 million through share issuances in Q1 FY2025 and secured additional loans, including a $340,000 increase from lender Pure and a $50,000 advance from its major shareholder. These measures aim to support working capital needs and reduce debt, though the company acknowledges ongoing capital raising efforts will be necessary.
Outlook and Growth Prospects
Looking ahead, Oldfields is optimistic about FY2026, expecting momentum to build as the sales and distribution model matures. The company’s sales pipeline is robust, featuring $10.4 million in annuity opportunities and $9.4 million in one-off projects, reflecting strong domestic and international demand. Operational improvements, including better inventory management and a focus on health and safety specialisations in South and Western Australia, are expected to underpin sustained growth.
Oldfields’ board and management remain committed to securing additional funding to support working capital and long-term value creation. The company’s transformation, while progressing slower than initially hoped due to capital constraints, is positioning it for a turnaround and enhanced financial stability.
Investors will be watching closely as Oldfields navigates these challenges, balancing the need for capital with the imperative to convert its sales pipeline into profitable contracts.
Bottom Line?
Oldfields’ strategic pivot shows promise, but working capital constraints remain a key hurdle to watch in FY2026.
Questions in the middle?
- How quickly can Oldfields secure additional capital to fully support inventory replenishment?
- Will the sales pipeline convert into sustained revenue growth amid ongoing operational changes?
- How will competitors respond to Oldfields’ shift away from hire services on the East Coast?