Trademark Battle Drives Jatcorp to $6.9m Loss — What’s Next for Investors?
Jatcorp Limited reported a $6.9 million net loss for FY25, hit by a trademark dispute in China that suspended key product sales. Despite setbacks, the company is accelerating new channel growth and product innovation to regain momentum.
- Revenue from continuing operations down 34% to $34.8 million
- Net loss after tax of $6.9 million, reversing prior year profit
- Trademark dispute halts Neurio sales in China, triggering inventory impairments
- New sales incentive agreement with HS International targets $11 million+ sales in FY26
- Manufacturing upgrades and product launches underpin growth strategy
Financial Setback Amid Legal Challenges
Jatcorp Limited has revealed a challenging financial year ending 30 June 2025, reporting a net loss after tax of $6.9 million, a sharp reversal from a $1.6 million profit in the previous year. The company’s revenue from continuing operations fell 34% to $34.8 million, reflecting significant headwinds primarily linked to a trademark dispute in China.
The dispute has led to the suspension of sales of Jatcorp’s Neurio-branded products in mainland China, one of its key markets. This legal battle not only disrupted sales but also forced the company to write down inventory and impair goodwill related to its Sunnya subsidiary, compounding the financial impact.
Strategic Response and Growth Initiatives
In response to these challenges, Jatcorp has accelerated its growth strategy, focusing on expanding new sales channels and product innovation. The company onboarded around 30 new Australian retail outlets and significantly expanded online distribution of its Moroka brand across major Chinese e-commerce platforms such as JD, Douyin, VIP.com, and Tmall.
A pivotal development was the signing of a sales incentive agreement with HS International, a Tier 1 retailer in China’s mom and baby and health supplement sectors. This partnership generated over $8 million in sales in FY25, with a target to exceed $11 million in FY26, signaling confidence in the company’s ability to regain market traction.
Operational Enhancements and Product Pipeline
Jatcorp also invested in upgrading its ANMA manufacturing facility in Melbourne, introducing automation and new production lines to boost efficiency and support contract manufacturing growth. The company launched seven new Moroka products during the year, targeting immune support, cognitive health, and recovery nutrition, with more products slated for release in FY26.
Despite the short-term financial pressures, management remains optimistic about the long-term strategic plan. The company is actively pursuing legal avenues to protect its intellectual property rights and is expanding its footprint in Southeast Asia through new distribution partnerships.
Financial Position and Outlook
Jatcorp ended FY25 with a cash balance of $2.7 million and access to a $3 million credit facility, supporting its going concern status. The board highlighted the material uncertainty posed by the ongoing legal disputes but expressed confidence in the company’s ability to generate positive cash flows and execute its growth initiatives.
No dividends were declared for the year, reflecting the company’s focus on stabilising operations and funding expansion. Investors will be watching closely how Jatcorp navigates the trademark litigation and leverages its new partnerships to restore profitability.
Bottom Line?
Jatcorp’s FY25 results underscore the risks of international legal disputes but also highlight a proactive pivot towards growth and operational resilience.
Questions in the middle?
- How will the trademark dispute resolution timeline affect Jatcorp’s sales recovery in China?
- Can the HS International partnership deliver sustained sales growth beyond FY26 targets?
- What impact will new product launches and manufacturing upgrades have on margins and profitability?