Profit Jumps 61% to $2.17M Despite 7.3% Revenue Fall at Ashley Services

• Statutory NPAT rises 60.9% to $2.17 million in FY25
• Revenue falls 7.3% to $515.9 million, impacted by Victorian project delays
• No final dividend declared; interim dividend paid with 53% payout ratio
• Net debt reduced by $1.2 million to $11.2 million
• Early FY26 shows contract renewals and new customer gains

Financial Performance Overview

Ashley Services Group Limited (ASX – ASH) has delivered a solid financial performance for the full year ended 30 June 2025, posting a statutory net profit after tax (NPAT) of $2.17 million. This represents a significant 60.9% increase compared to the prior year’s $1.35 million, despite a 7.3% decline in revenue to $515.9 million. The prior period included a substantial $3.2 million non-recurring expense related to goodwill impairments, which the company avoided this year, helping to underpin the improved bottom line.

Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA), excluding non-recurring items, remained stable at $8.7 million, reflecting the company’s ability to maintain operational profitability amid challenging market conditions.

Segment Challenges and Strategic Reset

The revenue decline was primarily driven by the Labour Hire division, which saw a 7% drop to $500.7 million. This was largely due to the completion of major projects and delays in new work within Victoria’s construction and engineering sectors, compounded by industrial relations challenges. However, other sectors such as supply chain, manufacturing, retail, rail, and horticulture showed resilience or growth, with horticulture revenues notably increasing by 9%.

The Training division also faced headwinds, with revenues falling 16.3% to $15.3 million due to state government funding cuts in Victoria and reduced telecommunications training in Queensland. Correspondingly, EBITDA in Training declined sharply by 60% to $1.6 million.

Balance Sheet and Dividend Policy

Ashley Services Group has prioritized strengthening its balance sheet, reducing net debt by $1.2 million to $11.2 million over the year. This cautious approach is reflected in the decision not to declare a final dividend for FY25, although an interim dividend of 0.8 cents per share was paid, resulting in a full-year payout ratio of 53%, down from 79% the previous year.

Corporate costs were trimmed by $1.1 million, aided by lower staffing and insurance expenses, demonstrating management’s focus on cost control and efficiency improvements.

Outlook and Early FY26 Momentum

Managing Director Ross Shrimpton highlighted that FY25 was a year of stabilization and strategic reset. Encouragingly, early FY26 results show improved momentum with contract renewals or finalizations covering over 85% of recurring revenues in key sectors. New customer acquisitions in supply chain and retail, alongside a five-year contract in horticulture, signal potential for sustained growth.

Construction and traffic sectors in Victoria are also poised for recovery, with new projects commencing in June 2025 and further work scheduled to ramp up from October. The company continues to pursue operational efficiencies and is advancing the commercialization of its proprietary labour management systems internationally, which could open new revenue streams.

Overall, Ashley Services Group appears to be navigating sector-specific challenges with a clear focus on debt reduction, contract stability, and diversification, positioning itself for a potentially stronger FY26.

Bottom Line?

Ashley Services Group’s FY25 results mark a cautious but promising reset, with debt reduction and contract wins setting the stage for growth.

Questions in the middle?

• How quickly will Victorian construction and traffic sectors return to historic revenue levels?
• What impact will the commercialization of labour management systems have on future earnings?
• Will the company resume final dividend payments once debt targets are met?