DGL Group Limited reported a 3% revenue increase to $481.5 million for FY25 but swung to a $24.6 million net loss driven by asset impairments and operational challenges. The company is undertaking significant restructuring and integration efforts to restore profitability.
- FY25 revenue up 3% to $481.5 million
- Net loss after tax of $24.6 million versus $14.3 million profit in FY24
- Underlying EBITDA declined 19% to $52.1 million after non-recurring costs
- Closure of Laverton ULAB recycling facility and asset write-downs
- Ongoing integration of acquisitions and investment in new ERP systems
Revenue Growth Masks Underlying Challenges
DGL Group Limited reported a modest 3.5% increase in revenue for the financial year ended June 30, 2025, reaching $481.5 million. This growth was largely driven by strong performances in its Manufacturing and Logistics segments, supported by recent acquisitions. However, beneath the top-line improvement, the company faced significant operational and financial headwinds.
From Profit to Loss – The Impact of Asset Write-Downs and Restructuring
Underlying Earnings and Cost Rationalisation
Adjusting for these one-off items, underlying EBITDA declined 19% to $52.1 million, reflecting ongoing challenges in cost management and integration. The company has responded by consolidating ULAB recycling operations to its Unanderra facility and rationalising employee and overhead expenses to better align with current volumes. Additionally, DGL invested in new enterprise resource planning (ERP), logistics management, and HR systems aimed at streamlining operations and driving productivity gains in FY26.
Asset Sales and Debt Management
To strengthen its balance sheet, DGL is actively divesting non-core assets including manufacturing and recycling sites in Seven Hills, Tomago, and Laverton, with sales expected to settle in the coming months. Proceeds from these disposals will be directed towards debt reduction. The Group remains compliant with amended debt covenants, which were temporarily relaxed until December 2025 to provide financial flexibility during this transitional period.
Regulatory and Audit Considerations
The company disclosed an ongoing Environmental Protection Authority (EPA) investigation related to alleged breaches at one site in 2024. While the outcome and potential financial impact remain uncertain, management does not currently anticipate a material outflow. Additionally, the final audit opinion is expected to carry a qualification concerning inventory valuation at two locations, underscoring the need for continued operational improvements.
Looking Ahead
DGL’s FY25 results underscore the challenges of integrating multiple acquisitions and managing legacy operations amid changing market conditions. The company’s focus on operational consolidation, system upgrades, and asset rationalisation will be critical to restoring profitability and delivering shareholder value in the coming year.
Bottom Line?
DGL’s FY25 loss highlights a pivotal restructuring phase, with upcoming asset sales and integration efforts set to define its recovery trajectory.
Questions in the middle?
- How quickly can DGL realise cost savings and synergies from its new ERP and integration initiatives?
- What is the potential financial impact and timeline of the EPA investigation on the Group?
- Will the sale of non-core assets sufficiently reduce debt and improve liquidity to support growth?