Hotwire’s Challenges and Leadership Shakeup Cloud Enero’s Growth Outlook
Enero Group reports a robust 13% increase in EBITDA for FY26 Q1, powered by strong Australian agency performance and strategic cost cuts, while Hotwire Global undergoes leadership changes and cost optimisation.
- 13% Group EBITDA growth with margin expansion to 10.3%
- BMF agency boosts margins to 21.6%, wins Effective Agency of the Year
- Orchard segment posts 17% revenue and 83% EBITDA growth
- Hotwire Global faces sector challenges, implements cost cuts and appoints new CEO
- Corporate cost reductions contribute to improved overall profitability
Strong Start to FY26 for Enero Group
Enero Group Limited (ASX – EGG) has kicked off FY26 with a solid trading update, revealing a 13% rise in EBITDA for the first quarter compared to the previous year. This growth was underpinned by strong performances from its Australian agencies and a leaner corporate structure that helped expand overall EBITDA margins from 9.2% to 10.3%.
The diversified marketing and communications group, which operates across technology, healthcare, and consumer sectors, demonstrated resilience amid mixed conditions. While some segments thrived, others faced headwinds, reflecting the varied dynamics in their respective markets.
BMF and Orchard Lead the Charge
BMF, Enero’s creative agency, delivered an impressive performance with a margin increase from 18.8% to 21.6%, buoyed by a full quarter of large client wins. The agency’s continued excellence was recognised with its second consecutive Effective Agency of the Year award at the Effie Awards, highlighting its creative and strategic prowess.
Orchard, the group’s digital and experiential agency, also posted strong results, with revenue up 17% and EBITDA surging 83% year-on-year. Growth was driven by expanded service offerings and new client acquisitions in both healthcare and consumer verticals, signalling robust demand for its integrated marketing solutions.
Hotwire Global Navigates Sector Challenges
Conversely, Hotwire Global, which focuses on technology sector clients, experienced a revenue decline of 11% and a 38% drop in EBITDA. The segment faced a challenging environment, prompting management to implement cost optimisation measures, including role reductions and selective offshoring. Despite these challenges, Hotwire successfully onboarded its largest client to date, Qualtrics, with revenue expected to contribute fully from FY26 Q2 onwards.
In a strategic move to reinvigorate Hotwire, Enero announced the appointment of a new Global CEO effective January 2026. This leadership change aims to sharpen Hotwire’s focus on innovation and growth, potentially setting the stage for a turnaround in the coming quarters.
Corporate Efficiency and Dividend Outlook
Beyond agency-level performance, Enero’s leaner corporate centre, including a streamlined executive team, contributed to lower overheads and improved profitability. The group reaffirmed its commitment to dividend payments aligned with its historical payout ratio of 40% to 60% of earnings per share, signalling confidence in its cash flow generation.
CEO Ian Ball emphasised the strength of Enero’s diversified portfolio model, which balances sector and geographic risks while enabling consistent growth. He highlighted ongoing investments in automation and global centres of excellence as key drivers for future momentum.
Bottom Line?
Enero’s diversified model and strategic leadership changes set the stage for sustained growth, but Hotwire’s turnaround will be critical to watch.
Questions in the middle?
- How will the new Hotwire CEO reshape the agency’s strategy and performance?
- What impact will Qualtrics’ revenue have on Hotwire’s future quarters?
- Can Enero sustain margin expansion amid ongoing sector volatility?