Shine Justice Ltd reported a modest revenue increase for FY25 alongside a sharp decline in profit, raising questions about underlying challenges despite a steady dividend payout.
- Revenue increased 4.44% to $204.4 million
- Profit after tax dropped 90.53% to $8.7 million
- Net comprehensive income fell 88.04%
- Final fully franked dividend declared at 3.5 cents per share
- Acquisition of Shine Lawyers NZ Limited contributed minimally to profit
Revenue Growth Amid Profit Decline
Shine Justice Ltd has released its preliminary financial results for the year ended 30 June 2025, revealing a nuanced performance. The company managed to grow its revenue by 4.44% to $204.4 million, a positive sign in a competitive legal services market. However, this top-line growth starkly contrasts with a dramatic 90.53% plunge in profit after tax, which fell to just $8.7 million.
Diverging Financial Metrics
While revenue growth suggests steady demand for Shine Justice’s legal services, the steep profit decline signals rising costs or other operational pressures. Net comprehensive income also dropped sharply by 88.04%, indicating broader challenges beyond the income statement. The company’s net tangible assets per share slightly decreased, reflecting a modest erosion of underlying asset value.
Dividend Maintained Despite Profit Pressure
In a move likely aimed at reassuring investors, Shine Justice declared a final fully franked dividend of 3.5 cents per share, following an interim dividend of 1.5 cents. The company does not offer a dividend reinvestment plan, which may limit options for shareholders seeking to compound their investment. The dividend dates are set for late September and mid-October, maintaining a consistent shareholder return despite the profit squeeze.
Impact of Acquisition and Future Outlook
During the year, Shine Justice acquired Shine Lawyers NZ Limited, gaining accounting control in November 2024. However, the acquisition’s contribution to profit was described as immaterial, suggesting it has yet to significantly influence the group’s financial trajectory. Investors will be watching closely for how this expansion into New Zealand might bolster future earnings or operational scale.
The company’s results have been audited by PricewaterhouseCoopers and are detailed further in the 2025 Annual Report. The sharp profit decline, despite revenue growth, raises questions about cost management, competitive pressures, or one-off charges that the headline figures do not fully explain.
Bottom Line?
Shine Justice’s FY25 results highlight a critical juncture where revenue growth masks deeper profitability challenges, setting the stage for scrutiny in the year ahead.
Questions in the middle?
- What factors drove the steep 90% profit decline despite revenue growth?
- How will Shine Justice leverage its New Zealand acquisition to improve future earnings?
- Will the company adjust its dividend policy if profit pressures persist?