NTAW Holdings reported a slight revenue increase to $538 million for FY2025 but posted a significant net loss of $44 million, driven by a $39 million impairment charge and operational challenges including the loss of Dunlop distribution rights. The company is executing a business reset focusing on inventory, costs, and cash flow.
- FY2025 revenue up 0.9% to $538.15 million
- Net loss of $43.96 million due to $39.22 million impairment charge
- Termination of Dunlop tyre distribution agreements in Australia and New Zealand
- Operational reset delivers inventory reduction and improved cash flow in 2H2025
- No dividends declared; management strengthened with new appointments
Financial Performance and Impairment Impact
NTAW Holdings Limited has released its preliminary final report for the year ended 30 June 2025, revealing a challenging year marked by a modest revenue increase to $538.15 million, up 0.9% from the prior year. However, the company recorded a substantial net loss of $43.96 million, a sharp reversal from a $1.24 million profit in FY2024. This loss was primarily driven by a non-cash impairment charge of $39.22 million against intangible assets linked to key business units including the Tyre & Wheel wholesale operations, Black Rubber retail and retreading business, and Carters in New Zealand.
Operational Challenges and Strategic Reset
The first half of FY2025 was particularly difficult, with lower than expected sales in commercial retail and retreading segments across Australia and New Zealand. The termination of distribution agreements for Dunlop branded tyres in Australia and New Zealand, effective July 2025, further impacted performance. Black Rubber faced losses due to customer attrition in Western Australia and costs associated with expanding its national commercial fleet services. Carters experienced a significant profit decline amid New Zealand’s recessionary conditions affecting the transport sector.
In response, the company accelerated an operational reset under new CEO Warwick Hay, appointed in January 2025. This reset focused on inventory management, cost reduction, and cash flow improvement. Inventory levels were reduced by nearly 19% from $157 million at December 2024 to $128 million by June 2025. Net operating cash flow swung to a $37 million inflow in the second half of the year, compared to a $10 million outflow in the first half. Operating expenses were cut by 14% in the second half, contributing to a stronger financial position despite the ongoing challenges.
Leadership and Governance Developments
The company also strengthened its management team with the appointments of Rob Watson as CEO of the New Zealand group and Sean Banfield as Group General Manager of Technology, bringing expertise in growth and IT transformation. Meanwhile, former CEO Peter Ludemann stepped down from his executive roles by June 2025, marking a leadership transition aligned with the company’s strategic reset.
Financial Position and Outlook
NTAW Holdings maintains a solid balance sheet with net assets of $86.36 million and net debt reduced to $40.44 million. The company is actively engaging with the Commonwealth Bank of Australia to manage financial covenants, with the bank indicating support amid the reset. Further debt repayments are planned for FY2026, alongside continued efforts to optimize inventory and reduce costs.
Looking ahead, the company anticipates subdued sales growth in FY2026, reflecting the cessation of Dunlop distribution in Australia and cautious consumer sentiment. Growth is expected from core wholesale brands, organic expansion of Carters, and steady progress at Black Rubber and other subsidiaries. The company is also reviewing strategic options for its South African business and aims to leverage supplier partnerships and marketing initiatives to regain market share.
Risks and Remuneration
Key risks identified include macroeconomic volatility, supplier and customer retention challenges, competitive pressures, foreign exchange fluctuations, and regulatory compliance. Executive remuneration remains closely tied to performance metrics, with short-term incentives linked to revenue, cost reduction, and inventory management targets, and long-term incentives based on shareholder returns and return on net assets.
Bottom Line?
NTAW Holdings’ FY2025 results underscore the urgency of its operational reset and strategic realignment, with FY2026 set to test the resilience of its turnaround efforts amid ongoing market headwinds.
Questions in the middle?
- How will the loss of Dunlop distribution rights affect long-term revenue and market positioning?
- Can the operational reset sustain momentum and translate into profitability in FY2026?
- What strategic options will the company pursue for its South African operations?