Schaffer Corporation Grows FY25 Profits 7% Despite Supply Chain Setbacks
Schaffer Corporation delivered solid FY25 results with revenue growth and record property valuations, but the Jaguar Land Rover cyberattack clouds the near-term outlook for its Automotive Leather division.
- Group revenue rose 2% to $230 million with manufacturing profits up 7%
- Automotive Leather profits increased 7% to $16.3 million despite supply disruptions
- Delta division posted record revenues but expects a small loss in 1H26
- South Connect Jandakot property value increased to $100.2 million with warehouse development underway
- Jaguar Land Rover cyberattack caused a two-month production halt impacting 1H26 Automotive Leather outlook
Solid Financial Performance in FY25
Schaffer Corporation Limited reported a steady financial year ending June 2025, with group revenue increasing by 2% to $230 million and manufacturing profits rising 7%. The Automotive Leather division was a key contributor, posting profits of $16.3 million, up from $15.3 million the previous year, driven by higher sales volumes despite operational setbacks. Meanwhile, the Delta division achieved record revenues of $31.5 million and profits of $4.9 million, reflecting strong demand during the first half of the year.
Supply Chain Disruptions and Cyberattack Impact
The year was not without challenges. Automotive Leather faced delays from a major customer’s flooding incident and a significant cyberattack on Jaguar Land Rover (JLR) in September 2025. The cyberattack forced JLR to halt global production for two months, severely impacting sales volumes and profitability in the first half of FY26. Despite this, the division retained most employees to prepare for the eventual production restart, with November and December sales gradually recovering to about 65% of normal levels.
Property Investment Growth and Development
On the investment front, Schaffer’s South Connect Jandakot logistics estate increased in pre-debt value to $100.2 million, up from $94.3 million the prior year. The estate, strategically positioned to capitalize on growing demand for last-mile warehousing, is set to commence construction of a 13,500 sqm warehouse in early 2026. The company plans to finance this build-to-lease project with approximately $22 million in debt, maintaining a conservative leverage position relative to the asset’s value.
Outlook and Risks Ahead
Looking forward, Schaffer flagged a cautious outlook. The Automotive Leather division expects a first-half profit of around $3.5 million, down from $7.8 million the previous year, while Delta anticipates a small loss amid a more competitive market following the completion of major infrastructure projects. The company highlighted ongoing risks including semiconductor shortages, geopolitical tensions, currency volatility, and a potential global economic slowdown. Despite these headwinds, the Board intends to maintain the fully franked dividend at $0.45 per share for the coming half-year.
Strategic Focus on Automation and Growth
Management emphasized their commitment to leveraging automation and technology advancements within the Automotive Leather division to improve efficiency and profitability. The leadership team’s depth and expertise are positioned to navigate the evolving business landscape shaped by technological innovation and shifting market dynamics.
Bottom Line?
Schaffer’s FY25 strength is tempered by near-term operational challenges, setting the stage for a pivotal 2026.
Questions in the middle?
- How quickly will Jaguar Land Rover’s production fully recover and what is the lasting impact on Automotive Leather?
- What are the prospects for Delta to regain profitability amid increased industry competition?
- How will geopolitical and supply chain risks influence Schaffer’s investment and operational strategies going forward?
