Why Did AVA Risk Group’s Losses Surge Despite Revenue Growth?
AVA Risk Group reported a 5% increase in revenue to $31.6 million for FY2025 but saw losses widen by 24% and EBITDA fall by 34%, with no dividend declared.
- 5% revenue growth to $31.6 million
- 24% increase in loss after tax to $6.46 million
- 34% decline in EBITDA to $3.42 million
- No dividend declared for FY2025, compared to 0.17 cents special dividend last year
- Net tangible assets per share slightly down to 4.75 cents
Financial Performance Overview
AVA Risk Group Limited has released its preliminary final report for the year ended 30 June 2025, revealing a mixed financial performance. The company achieved a 5% increase in consolidated revenue, reaching $31.6 million, signaling some top-line growth in its risk management services. However, this positive development was overshadowed by a significant deterioration in profitability metrics.
The loss after tax attributable to shareholders widened by 24% to $6.46 million, reflecting increased costs or operational challenges that have yet to be fully detailed. EBITDA, a key measure of operational earnings before accounting for interest, tax, depreciation, and amortisation, fell sharply by 34% to $3.42 million. This decline suggests that the company’s core earnings capacity has been under pressure despite higher revenues.
Dividend and Shareholder Returns
In a notable shift from the previous year, AVA Risk Group has decided not to propose any dividends for the current reporting period. This contrasts with the special dividend of 0.17 cents per share paid in December 2023. The absence of a dividend may reflect the company’s need to conserve cash amid ongoing losses and weaker earnings, signaling a cautious approach to shareholder returns in the near term.
Net tangible assets per security, a measure of the company’s net asset backing per share, decreased slightly from 4.94 cents to 4.75 cents. While this decline is modest, it aligns with the overall trend of increased losses and reduced profitability.
Operational and Strategic Context
The report confirms that there were no changes in control of entities or joint ventures during the period, indicating stability in the company’s corporate structure. The financial statements were audited with an unmodified opinion, providing assurance on the accuracy and reliability of the reported figures.
While the preliminary final report itself offers limited operational commentary, the company’s Directors’ Report and full financial statements are expected to provide further insights into the drivers behind the revenue growth and the factors contributing to the increased losses and reduced EBITDA. Investors will be keen to understand whether these trends reflect temporary challenges or longer-term structural issues within AVA’s business model.
Looking Ahead
AVA Risk Group’s FY2025 results present a complex picture of modest growth coupled with profitability pressures. The company’s decision to withhold dividends and the decline in EBITDA highlight the need for careful cost management and strategic focus moving forward. Market participants will be watching closely for updates on operational improvements and any changes in capital allocation policy that could influence the company’s financial trajectory.
Bottom Line?
AVA’s revenue growth is encouraging, but rising losses and no dividend raise questions about its path to sustainable profitability.
Questions in the middle?
- What specific factors drove the 24% increase in loss after tax despite revenue growth?
- How does AVA plan to address the 34% decline in EBITDA in the coming year?
- Will the company reinstate dividends once profitability improves, or is a longer pause expected?
