How Did NTAW Holdings Engineer a $30.3M EBITDA Turnaround in FY2025?

A Challenging Start, A Strong Finish

NTAW Holdings Limited (ASX – NTD) faced a difficult FY2024 and first half of FY2025, culminating in a significant net loss largely driven by a substantial non-cash impairment charge. However, the appointment of Warwick Hay as CEO and Managing Director marked a turning point. His leadership has accelerated a comprehensive transformation focused on operational discipline, cost control, and inventory management.

In the second half of FY2025, NTAW achieved an Operating EBITDA of $19.7 million, contributing to a full-year Operating EBITDA of $30.3 million. This turnaround was underpinned by aggressive cost reductions totaling $9 million and an 18.8% reduction in inventory, which helped improve liquidity and reduce working capital demands.

Financial Reset and Debt Management

Despite reporting a net loss after tax of $44 million for FY2025, the bulk of this loss stemmed from a $39.2 million impairment charge in the first half. The second half’s net loss narrowed dramatically to $1.1 million, reflecting the tangible benefits of the reset initiatives. Importantly, net debt was slashed by 37% to $40.4 million by year-end, with further repayments of $11 million occurring post-balance date. The company’s borrowing facility with Commonwealth Bank of Australia remains intact and supported, providing a stable financial platform moving forward.

Operational Improvements and Strategic Focus

Operationally, NTAW has completed a rescaling of its retail footprint, closing eight small regional stores and streamlining six large commercial retail outlets. The Group’s focus is now on leveraging its core wholesale brands across Australia and New Zealand, including Carter’s Tyre Service, Dynamic Wheel Co, and Black Rubber. The latter has been simplified with new performance criteria and accreditation from major suppliers like Goodyear and Michelin, enhancing efficiency and flexibility.

Looking ahead, NTAW is targeting conservative revenue growth in FY2026, mindful of subdued consumer sentiment and low economic growth in its key markets. The company plans to continue embedding disciplined cost controls, optimizing inventory levels, and pursuing organic growth opportunities. Discussions are also underway regarding the future of its South African business, signaling a potential strategic realignment.

Leadership and Cultural Reset

Alongside Warwick Hay’s leadership, the Group has strengthened its senior management team with key appointments in New Zealand and technology functions. The Board and management emphasize a cultural reset alongside financial improvements, aiming to build a sustainable platform for value creation for investors, customers, and employees alike.

While challenges remain, particularly in a tough global economic environment and ongoing supply chain pressures, NTAW’s tactical response and operational reset have laid a solid foundation for FY2026. The company’s strategic evaluation phase is underway, with a clear focus on consolidation, growth, and delivering shareholder value.