McPherson’s Faces $15m Statutory Loss Amid Operating Model Reset
McPherson's Limited reported a 3.9% revenue decline in FY25 driven by exiting lower-margin brands, while core brands grew 1.9%. The company posted a statutory net loss of $15 million, weighed down by significant impairments as it completes a major operating model transformation.
- FY25 revenue down 3.9% to $139 million
- Core brand revenue up 1.9%, driven by focused advertising and innovation
- Statutory net loss of $15 million includes $19.7 million impairments
- Operating model transformation substantially completed in 2H25
- FY26 outlook anticipates moderate EBITDA growth weighted to second half
Revenue and Core Brand Performance
McPherson's Limited closed FY25 with revenue of $139 million, a 3.9% decline from the previous year, primarily reflecting the strategic exit of non-core, lower-margin brands. Despite this, the company’s core brands demonstrated resilience, growing revenue by 1.9% to $124.6 million. This growth was supported by increased advertising and promotions (A&P), improved product ranging, and a transitional pipe-fill to new wholesalers, particularly in Australia and New Zealand.
Four out of five core brands posted growth, with notable strength in health and wellness segments such as Fusion Health and VMS (vitamins, minerals, and supplements). However, the international segment, especially the Dr LeWinn’s brand in China, faced significant headwinds due to intense competitor discounting, resulting in a 45.3% revenue decline and increased EBITDA losses.
Operating Model Transformation and Cost Management
The company substantially completed a major operating model reset in the second half of FY25, including new wholesaler agreements, sub-leasing warehouse space, and divesting the Multix brand. These changes have unlocked operational efficiencies, with annualised EBIT benefits estimated between $4.5 million and $5 million. Cost savings were realized through restructuring, reduced employee expenses, and overhead discipline, partially offsetting the impact of foreign exchange headwinds and increased A&P investment in core brands.
Despite these efforts, McPherson's reported a statutory net loss after tax of $15 million, a 6% improvement from FY24 but still significant. This loss was heavily influenced by $19.7 million in material impairments, including goodwill and brand name write-downs, primarily related to the international business and underperforming brands like Dr LeWinn’s, Maseur, and Revitanail.
Cash Flow and Financial Position
The company’s net cash position declined to $8.8 million from $14.1 million the prior year, reflecting increased working capital requirements linked to transitional pipe-fill and timing of customer receipts. Operating cash flow was modest at $2.2 million, down from $12.3 million in FY24, influenced by the absence of Multix-related trading benefits and GST remittances. McPherson’s continues to manage cash prudently to support the embedding of its new operating model and ongoing brand investments.
Outlook and Strategic Priorities for FY26
Looking ahead, McPherson’s expects moderate growth in underlying EBITDA for FY26, with results weighted to the second half of the year. The company plans to capitalise on improved distribution and service capabilities, continue disciplined investment in core brand building, and accelerate digital transformation initiatives including e-commerce expansion and AI-driven business process improvements.
Management remains focused on embedding the new operating model, leveraging enhanced data capabilities, and driving sustainable growth in health, wellness, and beauty categories. The international segment will be carefully assessed for strategic fit and profitability, particularly in the Asia Pacific region.
Bottom Line?
McPherson’s FY25 marks a pivotal reset with core brand growth offset by impairments and transformation costs, setting the stage for cautious optimism in FY26.
Questions in the middle?
- How will McPherson’s address ongoing challenges in its international segment, especially Dr LeWinn’s in China?
- What impact will the ASIC legal proceedings have on the company’s financial and operational outlook?
- Can the new operating model deliver sustained margin expansion and cash flow improvements in FY26 and beyond?
