IVE Group delivered a robust FY25 with a 69% jump in IFRS net profit, driven by margin gains and cost synergies, while guiding steady earnings for FY26 despite higher capital spending and relocation expenses.
- IFRS NPAT up 69.2% to $46.7 million
- Underlying NPAT rises 21.1% to $52.1 million
- Revenue dips slightly by 1.6% to $954.8 million
- FY26 guidance set between $50 million and $54 million NPAT
- Capital expenditure to spike to $42 million due to expansion and relocations
Strong Profit Growth Despite Revenue Dip
IVE Group Limited (ASX, IGL) has reported a standout financial performance for the year ended 30 June 2025, with IFRS net profit after tax (NPAT) soaring 69.2% to $46.7 million. This surge was underpinned by a notable improvement in operating margins and effective cost management, even as total revenue slipped slightly by 1.6% to $954.8 million.
The company’s underlying NPAT, which excludes non-operating items, also rose significantly by 21.1% to $52.1 million, reflecting a solid operational footing. Earnings per share followed suit, increasing by over 20%, signaling enhanced shareholder value.
Margin Expansion and Cash Flow Strength
IVE Group’s gross profit margin expanded to 49.3% from 46.7% the previous year, a key driver behind the improved profitability. EBITDA climbed 7% to $136.7 million, supported by the full integration of cost synergies from recent acquisitions Ovato and JacPak.
Operating cash conversion remained robust at just over 100%, enabling the company to reduce net debt from $131 million to $114.4 million. This strong cash flow position underpins IVE’s capacity to fund growth initiatives and maintain a stable fully franked dividend of 18 cents per share for FY25.
FY26 Outlook, Growth with Elevated Costs
Looking ahead, IVE Group has set its underlying NPAT guidance for FY26 between $50 million and $54 million. This forecast incorporates several headwinds, including a non-cash accounting timing difference of approximately $2.5 million related to new long-term property leases, and an expected $4 million post-tax loss from its Lasoo business, which management anticipates will improve in FY27.
Additionally, the company expects around $10 million in abnormal post-tax costs linked to the relocation of facilities in Dandenong and Kemps Creek, including overlapping rent expenses. Capital expenditure is projected to rise sharply to about $42 million, driven by packaging capacity expansion and fit-out costs for the new sites, before normalizing to $15 million–$20 million annually from FY27 onwards.
Strategic Growth via Acquisitions
IVE Group continues to emphasize diversification through acquisitions as a core growth strategy. With a strengthened balance sheet and strong cash flow, the company is actively pursuing opportunities in third-party logistics, merchandise, apparel, and creative content sectors. This approach aims to build on the momentum from recent integrations and position IVE for sustained medium-term growth.
Managing Director Matt Aitken highlighted the resilience of the business amid economic uncertainties, noting that the company comfortably exceeded its FY25 targets. He emphasized that the combination of margin improvements, cost discipline, and strategic investments provides a solid platform for future expansion.
Bottom Line?
IVE’s FY25 momentum sets the stage for growth, but near-term costs and Lasoo losses warrant close investor attention.
Questions in the middle?
- How quickly can Lasoo return to profitability and impact overall earnings?
- What specific acquisition targets is IVE prioritizing in its growth strategy?
- How will the increased capital expenditure affect cash flow and dividend sustainability beyond FY26?