China’s Market Headwinds Test Lynch Group’s Growth Momentum in FY26

Strong Growth in Australia and China

Lynch Group Holdings Limited has reported a robust financial performance for the fiscal year ending June 2025, with group revenue climbing 8.2% to $430.5 million. This growth was underpinned by solid demand in both Australia and China, the company’s two key markets. Australia’s revenue increased by 6.4%, supported by rising consumer preference for supermarket floral products, successful new brand launches, and an expanded sale or return (SOR) store network. Meanwhile, China delivered an impressive 18.3% revenue increase, driven by higher production volumes, improved tulip pricing, and stronger export volumes, particularly for roses.

Margin Improvements and Operational Efficiencies

The company’s EBITDA rose 9.1% to $43.2 million, surpassing prior guidance. Australia’s EBITDA growth of 8.1% was attributed to effective range management and disciplined cost control, despite challenges such as the Queensland cyclone impact. China’s EBITDA grew 12.7%, benefiting from stable pricing and increased tulip sales and exports, although the business faced higher costs related to tulip bulb production and energy. The Group also progressed with its SAP system upgrade, aiming to enhance operational efficiency, with the first phase expected to complete in the first half of FY26.

Dividend and Cash Flow Highlights

Lynch Group declared a fully franked final dividend of 9.0 cents per share, reflecting confidence in its cash flow generation and profitability. The company achieved a strong cash conversion rate of 96%, consistent with seasonal working capital movements. This solid financial footing provides a platform for continued investment and growth initiatives.

Outlook – Optimism in Australia, Caution in China

Looking ahead, CEO Hugh Toll expressed optimism about continued revenue momentum in Australia, with early FY26 sales up 5% year-on-year, driven by sustained consumer demand for supermarket floral products. However, the outlook for China is more cautious. Despite signs of stabilisation and improved event-driven demand, the company noted a 14% revenue decline in the first seven weeks of FY26 amid adverse weather conditions and a deflationary economic environment affecting non-event periods. Lynch expects Australia’s EBITDA margin to remain steady, while China’s margin will depend on market conditions through winter and key events in the second half of the year.

Strategic Positioning and Market Dynamics

Lynch Group’s vertically integrated model, combining growing and wholesale distribution, positions it well to capitalise on evolving consumer trends. The increasing penetration of floral products in Australian supermarkets suggests room for further category growth. In China, the company’s focus on premium flowers and export markets offers resilience amid domestic market fluctuations. The ongoing SAP upgrade and automation investments signal a commitment to operational excellence and scalability.