Why Did IDT’s CEO Resign Amid a 40% Revenue Surge?

Leadership Shakeup at IDT

IDT Australia Limited (ASX, IDT), a pharmaceutical manufacturing company based in Boronia, Victoria, has announced the immediate resignation of its CEO, Paul McDonald. Having led the company since 2021, McDonald's departure comes as the Board appoints Independent Non-Executive Chair Mark Simari as Executive Chair to steer the company through this transitional period. Simari, who joined the Board in 2022, brings extensive healthcare sector experience and a deep understanding of IDT's operations.

The Board emphasized that Simari will work closely with the senior executive team to ensure continuity and minimal disruption to operations, staff, and clients. Meanwhile, a search for a new CEO is underway, aiming to complement the company’s medium-term strategic direction.

Financial Performance, Growth Amid Challenges

Alongside the leadership change, IDT provided a trading update for the 2025 financial year. The company expects unaudited total revenue to increase by 40.6% year-on-year, reaching approximately $19.9 million. This growth is largely driven by a significant rise in disbursement revenue, from $0.9 million in FY24 to $4.8 million in FY25, reflecting new contracts and associated costs for raw materials and equipment passed on to customers with a modest margin.

However, despite the revenue surge, IDT’s net loss after tax is projected to widen to $7.5 million, up from a $5.4 million loss in the previous year. This deterioration is partly attributed to one-off bad debts of around $1.2 million, stemming from two customers defaulting on payments. The Board has acknowledged these as isolated incidents and is reviewing client due diligence processes to mitigate future risks.

Strategic Outlook and Operational Review

Demand for IDT’s pharmaceutical manufacturing services remains robust, and the company continues to pursue its transformation program initiated three years ago to restore profitability. Under Simari’s leadership, a comprehensive review of operational and business activities will be conducted to accelerate progress toward this goal. The Board has committed to providing more detailed insights in the upcoming full-year results, expected before the end of August.

With IDT’s facilities regularly audited by both the US FDA and Australian TGA, and its expertise spanning high potency and high containment pharmaceutical products, the company remains positioned in a niche but competitive market. The leadership transition and operational review will be critical in determining how effectively IDT can convert its revenue growth into sustainable profitability.