Schaffer Corporation Delivers 16% Underlying Profit Growth Amid Leadership Shift

Robust Underlying Earnings Despite Property Valuation Dip

Schaffer Corporation Limited (ASX – SFC) has reported a statutory net profit after tax (NPAT) of $24.3 million for the 2025 financial year, down 10% from $27.1 million in FY24. This decline primarily reflects a reduced unrealised gain on its South Connect Jandakot property investment, which contributed $2.3 million this year versus $8.1 million last year. When excluding this property revaluation, the company’s underlying NPAT actually rose 16% to $22 million, underscoring solid operational performance.

Automotive Leather Division Drives Growth Amid Challenges

The Automotive Leather division delivered a commendable 7% increase in profits to $16.3 million, supported by higher sales volumes and the launch of new programs for luxury brands Audi and Porsche. This growth came despite a two-month production interruption caused by flooding at a key aluminium supplier affecting Land Rover sales. Profit margins improved, aided by a weaker Australian dollar against the Euro, although currency volatility remains a risk. The division’s outlook is cautiously optimistic, with profits expected to hold steady in the first half of FY26 amid global economic uncertainties and geopolitical risks.

Delta Division’s Strong FY25 Performance Faces Near-Term Headwinds

Delta posted a 9% profit increase to $4.9 million on record revenues of $31.5 million, driven by major infrastructure projects in Western Australia. However, with several large projects completed, the market has become more competitive, and the company anticipates near break-even performance in the first half of FY26. This signals a challenging environment ahead as industry capacity increases and project opportunities tighten.

Investment Portfolio Growth and Development Plans

Schaffer’s total investment portfolio, including South Connect Jandakot and other property and equity holdings, grew 7.8% in value to $227.3 million, equating to $16.73 per share. South Connect Jandakot’s pre-tax net equity value rose to $88 million, supported by ongoing civil works and a $3.3 million unrealised gain. The company is advancing plans to commence construction of a 13,500 square metre warehouse in the first half of FY26, targeting logistics and last-mile warehousing demand in a prime location.

Leadership Renewal to Support Strategic Transformation

In a significant leadership update, Schaffer appointed Ralph Leib as CEO of the Automotive Leather division. Having served as CFO for eight years, Mr. Leib will spearhead the division’s strategic initiatives focused on automation and production transformation. This leadership strengthening aims to position the division for sustainable growth amid evolving market conditions.

Dividend Maintained Amid Positive Outlook

The Board declared a fully franked final dividend of $0.45 per share, unchanged from the prior year, reflecting confidence in the company’s cash flow and earnings stability. While the near-term outlook for Delta is cautious and Automotive Leather faces external risks, Schaffer’s diversified operations and growing investment portfolio provide a solid foundation for future performance.