Terragen Faces Going Concern Warning Despite New Product Launch and Capital Boost
Terragen Holdings reported a $3.72 million loss for FY25, impacted by drought and lower revenues, while launching dry probiotic products targeting feedlots and completing a $4.76 million equity raise.
- Net loss widened to $3.72 million despite new product launches
- Revenue declined 24% to $1.62 million due to challenging environmental conditions
- Introduced dry format probiotics for ruminants targeting beef and lamb feedlots
- Raised $4.76 million through placement and entitlement offer to strengthen balance sheet
- Key management changes including CFO transitions during the year
Financial Performance and Market Challenges
Terragen Holdings Limited has released its preliminary final report for the year ended 30 June 2025, revealing a net loss after tax of $3.72 million, up from a $3.01 million loss the previous year. Revenues fell 24% to $1.62 million, primarily due to adverse environmental factors such as drought impacting key agricultural markets in Australia and New Zealand.
The company’s core revenue streams remain its animal probiotics, Mylo® and Great Land Plus®, a plant bio-stimulant. Despite the revenue decline, Terragen has made strategic moves to diversify its product offerings and market reach.
Strategic Product Launches and Market Expansion
In March 2025, Terragen launched its new dry format probiotic products, Terragen Probiotic for Ruminants™ and Terragen Probiotic Ultra for Ruminants™, marking a significant pivot towards the beef and lamb feedlot sectors. These products are being sold online and through major agri-retailers across Australia, supported by targeted marketing campaigns and veterinary endorsements.
Additionally, the company is advancing development of a canine probiotic, with research trials nearing completion, aiming to broaden its product pipeline and reduce seasonal revenue volatility.
Capital Raising and Balance Sheet Strengthening
To support ongoing operations and growth initiatives, Terragen completed a placement and entitlement offer during the year, issuing over 135 million shares at $0.035 each and raising approximately $4.76 million before costs. This capital injection has bolstered the company’s net assets to $6.57 million, up from $5.32 million the prior year.
Operating expenses increased by 4.8% to $6.43 million, driven by higher sales and marketing costs to support the new product launches and the introduction of share-based payments to employees and directors.
Governance and Management Changes
The year saw several key management changes, including the appointment of Andrew Guthrie as a Non-Executive Director and transitions in the Chief Financial Officer and Company Secretary roles, with Roger McPherson appointed CFO and Company Secretary in August 2025.
The board remains focused on disciplined cost management while investing strategically in research and commercialisation to drive long-term growth.
Risks and Going Concern Considerations
The independent auditor issued an unqualified opinion but highlighted a material uncertainty regarding Terragen’s ability to continue as a going concern, citing ongoing losses and cash outflows. The company’s future viability depends on increasing sales, successful product adoption, and securing additional funding if necessary.
Key risks include intellectual property protection, market acceptance of new products, regulatory approvals, and the sufficiency of funding to support research and commercial activities.
Bottom Line?
Terragen’s FY25 results underscore the challenges of commercialising innovative agri-biological products amid environmental headwinds, with upcoming sales traction and capital management pivotal to its next phase.
Questions in the middle?
- How quickly will the new dry probiotic products gain traction in the beef and lamb feedlot markets?
- What are the prospects and timeline for commercialising the canine probiotic under development?
- Will Terragen require further capital raises to sustain operations beyond the current cash runway?
