Revenue Dips but Verbrec Strengthens Cash and Reintroduces Dividend

Strong Margins and Profitability Mark FY2025

Verbrec Limited has delivered a notable financial performance for the year ended 30 June 2025, posting its highest gross margins since 2015 at 37.3%, up from 35.8% the previous year. This margin improvement, coupled with disciplined project execution, helped lift comprehensive profits to $3.8 million, nearly doubling the prior year’s $2.0 million.

Despite a revenue decline to $85.6 million, impacted by macroeconomic headwinds such as inflationary pressures, political uncertainties, and the Queensland Cyclone Alfred, Verbrec managed to maintain a robust adjusted EBITDA margin of 10.3%, up from 9.7% in FY2024. The company’s ability to sustain profitability amid these challenges underscores the strength of its operational model and strategic focus.

Balance Sheet Strength and Cash Flow Improvements

Verbrec’s balance sheet shows marked improvement, with total equity rising to $23.8 million from $19.2 million and a net cash position of $2.3 million compared to a net debt position of $2.0 million the previous year. Cash and cash equivalents increased to $7.1 million, the highest year-end cash balance since FY2022, reflecting strong cash flow from operations and prudent overhead management.

This enhanced financial flexibility positions Verbrec well to pursue growth opportunities, whether through organic expansion, geographic diversification, or strategic acquisitions. The Board and management have signaled a renewed focus on capital allocation to drive long-term value creation.

Dividend Reinstatement Signals Confidence

In a significant move, Verbrec’s Board has approved the reintroduction of a dividend program, declaring a final fully franked dividend of 0.1 cents per share. This decision reflects confidence in the company’s stable profit margins, cash position, and strategic direction. The dividend will be paid on 17 October 2025 to shareholders on record as of 26 September 2025.

Contract Wins and Strategic Partnerships

Verbrec secured over $11 million in new contracts during FY2025, including Commonwealth Defence electrical projects, major control system upgrades, and water infrastructure design works. Notably, the company won a $4.2 million contract for the Port Adelaide M Berth Facility Electrical System Redevelopment Project, underscoring its expertise in critical infrastructure upgrades.

Additionally, Verbrec’s wholly owned subsidiary, StacksOn Operations Pty Ltd, entered a reseller agreement with Datamine to distribute its stockpile digital twin product, StacksOn. This partnership leverages Datamine’s international customer base to expand the reach of Verbrec’s mining technology solutions.

Outlook – Easing Headwinds and Growth Prospects

Management expects the macroeconomic pressures that constrained revenue in the second half of FY2025 to ease, enabling improved client capital spend and project approvals in FY2026. With a lean overhead structure and a focus on sustainable growth areas such as renewable gas and carbon capture projects, Verbrec aims to build on its momentum and grow revenues in the coming year.

The company’s strategic emphasis on sustainable focus areas and its strengthened financial position provide a solid foundation for future growth, while the reinstated dividend marks a milestone in its journey back to shareholder returns.