Star Combo Pharma Boosts Profit to $5.3M on 7% Revenue Growth in FY25
Star Combo Pharma Limited reported a 7% increase in total revenue to $27.8 million for FY25, propelled by a 10% rise in its core OEM and Own Brands segment. The company’s profit before tax surged to $5.31 million, reflecting operational strength despite challenges in its Retail division.
- 7% overall revenue growth to $27.8 million
- 10% increase in OEM and Own Brands revenue to $25.8 million
- Profit before tax rises to $5.31 million from $1.0 million
- Retail division revenue declines 25% amid store closures
- Declared $500,000 in franked dividends
Solid Growth in Core Manufacturing
Star Combo Pharma Limited has delivered a robust financial performance for the year ended 30 June 2025, with total group revenue climbing 7% to $27.8 million. This growth was largely driven by a 10% increase in its core Original Equipment Manufacturer (OEM) and Own Brands segment, which reached a record $25.8 million in revenue. The company attributes this to an expanded client base, new product development, and enhanced manufacturing efficiencies including intermittent 24-hour production capabilities.
Profitability Rebounds Strongly
The company’s profit before tax surged to $5.31 million, more than five times the $1.0 million recorded in the prior year. This improvement reflects operational leverage from higher manufacturing output and improved supply chain dynamics. Star Combo’s management highlighted strengthened relationships with OEM clients and new distribution arrangements both domestically and in Asia, targeting growing middle-class and aging populations.
Retail Division Faces Headwinds
Despite the strong core business, the non-core Retail division, comprising the Austoyou and Koala Mall platforms, experienced a 25% revenue decline to $2 million. This was driven by reduced demand from China and the closure of an Australian retail shop. The company has not indicated plans to reverse this trend, suggesting a strategic focus on its manufacturing and OEM operations.
Balance Sheet and Cash Position
Star Combo maintains a healthy balance sheet with net tangible assets per share increasing to $0.27 from $0.24. Cash on hand rose to $3.59 million, supplemented by term deposits of $14.52 million, reflecting prudent cash management. The company declared franked dividends of $500,000, signaling confidence in ongoing cash flow generation.
Governance and Outlook
The Board remains stable with no changes post-year-end. The audited financial statements were clean, with no disputes or qualifications. While the company has not provided explicit forward guidance, the focus on expanding OEM client relationships and distribution channels suggests a strategic emphasis on scaling its core manufacturing business. The decline in Retail revenue and the impact of lease liabilities on future cash flows remain areas to watch.
Bottom Line?
Star Combo Pharma’s FY25 results underscore its growing strength in contract manufacturing, but the Retail segment’s decline and lease commitments warrant close investor scrutiny.
Questions in the middle?
- How will Star Combo address the ongoing decline in its Retail division?
- What are the company’s plans to manage lease liabilities and capital expenditure going forward?
- Can Star Combo sustain its OEM growth momentum amid competitive pressures?
