IVE Group’s Expansion and Capex Surge Pose Execution Risks for FY26

Strong Financial Performance Amid Economic Headwinds

IVE Group Limited has delivered a commendable financial performance for the fiscal year ended 2025, showcasing resilience in a challenging economic environment. Despite a modest 1.6% decline in revenue to $954.8 million, the company achieved a 21.1% increase in net profit after tax (NPAT) to $52.1 million. This growth was primarily driven by a notable expansion in material gross profit margin, which rose to 49.3% from 46.7% the previous year, and the full realisation of cost synergies from recent acquisitions such as Ovato and JacPak.

Operating cash flow remained robust, converting at 101.9% of EBITDA, underscoring efficient working capital management and operational discipline. The company’s earnings per share (EPS) also improved significantly, with underlying EPS (NPAT basis) up 20.3% to 33.7 cents.

Balance Sheet Strength and Capital Investment

IVE Group’s balance sheet was further strengthened during FY25, with net debt reduced to $114.4 million and gearing ratios comfortably below internal targets. The company maintains substantial undrawn debt capacity of $72 million, positioning it well for future growth initiatives and acquisitions.

Capital expenditure for the year totalled $25 million, focused heavily on expanding packaging capacity, including the acquisition of advanced sheet-fed presses and finishing equipment. Notably, some planned capital projects were deferred into FY26, reflecting a strategic approach to investment timing.

Operational Expansion and Sustainability Progress

Operationally, IVE Group is advancing key growth initiatives. The relocation of its Third Party Logistics (3PL) operations to a new, purpose-built 33,000 square metre facility in Dandenong South is ahead of schedule and will increase storage capacity by 60% for Victorian clients. This supersite is designed with sustainability in mind, featuring solar power, battery storage, and modern staff amenities.

In Sydney, the Kemps Creek supersite is progressing on track for completion by late 2025, consolidating multiple business units to drive operational efficiencies and support expansion into packaging and related services. These strategic moves are expected to enhance service delivery and cost efficiencies across the group.

IVE Group also reported strong progress against its 2025 Sustainability Strategy, with nearly half of its initiatives completed. Highlights include waste diversion, improved supplier due diligence, increased female representation in senior management, and the launch of a Reconciliation Action Plan.

Outlook and Strategic Focus for FY26

Looking ahead, IVE Group has provided guidance for FY26 underlying NPAT in the range of $50 million to $54 million. This forecast factors in non-cash accounting impacts related to new long-term leases and expected restructuring costs associated with the Dandenong and Kemps Creek relocations. Capital expenditure is anticipated to rise to approximately $42 million, reflecting the completion of packaging capacity build-out and fit-outs for the new facilities.

The company reaffirmed its commitment to maintaining a fully franked dividend of 18 cents per share and signalled ongoing strategic acquisition activity, particularly in logistics, merchandise, apparel, and creative content sectors. This approach aligns with IVE’s broader growth strategy to diversify and strengthen its market position.