How Did Trajan Beat Revenue Targets Despite Margin Setbacks?
Trajan Group Holdings has reported record FY25 revenue of $166.5 million, exceeding guidance despite operational headwinds. However, EBITDA fell slightly short of forecasts, reflecting challenges in supply chains and market shifts.
- Record FY25 net revenue of $166.5 million, 7.4% growth year-on-year
- EBITDA at $15.5 million, below guidance but up 26.6% from FY24
- Operational challenges include FX losses, delayed shipments, and tariff-driven supply chain shifts
- Cash position improved to $11.9 million; net debt reduced to $29.6 million
- Leverage ratio improved to 1.9X, within target range
Strong Revenue Growth Despite Challenges
Trajan Group Holdings Limited (ASX – TRJ), a global player in analytical science and life sciences devices, has announced a robust top-line performance for the financial year 2025. The company expects to report net revenue of $166.5 million, surpassing the upper end of its guidance by $1.5 million and marking a 7.4% increase over the previous year. This growth is particularly notable given the $3.9 million revenue loss from a specialised biotech syringe segment that the company previously flagged.
EBITDA Growth Tempered by Operational Headwinds
While revenue growth was strong, Trajan’s group nEBITDA is anticipated to come in at approximately $15.5 million, falling short of the lower guidance threshold of $17 million by around 8.8%. Nevertheless, this represents a substantial 26.6% increase compared to FY24’s $12.3 million. The shortfall is attributed to several factors, including an unexpected $0.8 million foreign exchange revaluation loss due to AUD/USD fluctuations, delayed shipping of microsampling orders, and a shift in capital equipment sales towards more price-sensitive emerging markets, which compressed gross profit margins.
Supply Chain and Tariff Impacts
Tariff announcements during the year forced Trajan to pivot its operational strategy, focusing on local fulfilment to mitigate tariff impacts. This necessitated repositioning supply chains to better serve emerging markets, which, while strategic, contributed to margin pressures. These adjustments highlight the complex global trade environment companies like Trajan must navigate, especially when operating across multiple continents including the US, Australia, Europe, and Malaysia.
Improved Financial Position and Outlook
On the balance sheet front, Trajan’s cash and equivalents rose to $11.9 million, reflecting strong organic cash flow generation. The company’s net debt decreased by $3.3 million to $29.6 million, with net debt to EBITDA leverage improving from 2.7 times to 1.9 times, comfortably within the company’s target range of below 2.0 times. Late in the fiscal year, Trajan also secured new long-term debt arrangements with more supportive terms, reclassifying debt as non-current and aligning financial structure with growth ambitions.
Looking Ahead to FY26
Trajan’s management expressed confidence in the company’s positioning for continued EBITDA and margin expansion in FY26. The diversified product portfolio, strong customer relationships, and leadership in key market segments underpin this optimism. Investors will be keenly awaiting the full audited results scheduled for release on 28 August 2025, which will provide further clarity on the company’s financial health and strategic trajectory.
Bottom Line?
Trajan’s record revenue growth sets a strong foundation, but margin pressures and global trade dynamics will test its FY26 momentum.
Questions in the middle?
- How will Trajan manage ongoing FX volatility and tariff impacts in FY26?
- What strategies will the company deploy to restore and expand EBITDA margins?
- How significant is the loss of the biotech syringe revenue stream for future growth?
