How Will McPherson’s Navigate FY26 After $15M Loss and Strategic Shift?

Strategic Shift and Financial Performance

McPherson’s Limited, a longstanding player in the health, wellness, and beauty sector, reported its FY25 results reflecting a significant transformation in its operating model. The company transitioned from a direct-to-store distribution approach to a pharmacy wholesaler and third-party logistics model, a move designed to streamline operations and position its core brands for sustainable growth.

Revenue for the year declined by 3.9% to $138.99 million, impacted partly by the exit of non-strategic lower-margin brands and a challenging trading environment. Despite this, core brands such as Manicare, Lady Jayne, and Fusion Health showed resilience, with some posting modest growth. However, international sales, particularly for Dr LeWinn’s, suffered a notable decline due to competitive pressures and market dynamics.

Profitability and Material Charges

The company reported a net loss after tax of $15.04 million, an improvement of 6% compared to the previous year. Underlying EBITDA was $7.3 million, slightly down from $7.7 million in FY24, with margins holding steady at around 5.2%. The results were weighed down by significant material items totaling $19.7 million pre-tax, including impairments of goodwill and brand assets, restructuring expenses related to the new operating model, and onerous lease provisions following the sublease of the Kingsgrove warehouse.

These impairments reflect a recalibration of brand growth expectations and the costs associated with embedding the new distribution strategy. The company also incurred transformation-related costs, including redundancy payments and asset write-downs, signaling the substantial operational changes underway.

Capital Management and Dividend Policy

Given the retained losses and ongoing capital requirements to support the new operating model, McPherson’s Board elected not to declare a final dividend for FY25. The company has rightsized its working capital facility from $45 million to $25 million to better align with current needs and reduce financing costs. It is actively engaged in refinancing its debt facilities, which mature in March 2026, aiming to secure terms that support its transformed business structure.

Looking ahead, McPherson’s plans to develop a revised capital allocation framework in FY26 to balance funding needs with potential future shareholder returns once the new model is fully embedded.

Leadership and Governance

Leadership changes marked the year, with Alison Cook appointed Chair of the Board in March 2025, bringing extensive experience in biopharmaceutical and health services sectors. CEO Brett Charlton, appointed in August 2023, continues to steer the company through its transformation, emphasizing operational discipline and brand investment.

The Board remains focused on risk management, highlighting key risks such as foreign currency fluctuations, execution of the transformation strategy, and regulatory compliance. The company maintains a comprehensive foreign exchange hedging program to mitigate currency risks, particularly given its significant sourcing in US dollars.

Outlook and Market Positioning

McPherson’s expects moderate growth in underlying EBITDA in FY26, with results anticipated to be weighted towards the second half of the year as the new operating model takes firmer hold. The company’s core brands remain central to its strategy, supported by enhanced distribution capabilities through wholesaler agreements with Sigma, Symbion, and API Services Australia.

While the transitional pipe-fill revenues that supported FY25 results will not recur, new wholesaler partnerships are expected to partially offset this. The company is also investing in marketing and innovation to drive brand momentum in a competitive market.