Tamawood Projects Up to 50% Profit Surge in H1 FY26 on Strong Sales and AI Gains
Tamawood Limited anticipates a substantial 40% to 50% increase in first-half FY26 profit before tax, driven by a 36.5% rise in sales and improved Work In Progress reporting confirmed by auditors.
- 36.5% sales revenue growth in first five months of FY26
- 40% to 50% expected profit increase in H1 FY26 versus prior year
- External auditors validate new WIP calculation methodology under AASB15
- No significant rise in operating costs despite higher sales
- AI-enabled productivity improvements underpin future benefits
Robust Sales Drive Profit Outlook
Tamawood Limited has signaled a strong start to fiscal year 2026, with sales revenue climbing 36.5% in the first five months compared to the same period last year. This surge in sales, combined with a more favourable product mix, is expected to translate into a 40% to 50% increase in profit before tax for the first half of FY26, a significant leap from the $4.765 million recorded in the prior corresponding period.
WIP Reporting Gains Confidence
Central to this upbeat outlook is the confirmation from Tamawood's external auditors that the company's recently implemented software system accurately captures Work In Progress (WIP) calculations in line with accounting standard AASB15. This validation addresses previous concerns about WIP reporting and enhances transparency for investors regarding ongoing project valuations, particularly for the Dixon jobs currently underway.
Cost Control and AI-Driven Productivity
Despite the revenue growth, Tamawood reports no material increase in operating costs, suggesting effective cost management. The company attributes part of its improved productivity and quality to the introduction of AI-enabled components across departments, which are expected to deliver sustained operational benefits. However, the company cautions that rising construction costs may erode some margins in the second half of FY26.
Governance and Market Communication
In line with best practices, Tamawood's directors have entered a trading blackout period ahead of the release of the reviewed half-year financial results, ensuring compliance and market integrity. This blackout also means that directors could not alter prior Dividend Reinvestment Plan instructions. The company has committed to maintaining heightened scrutiny over WIP reporting to provide timely and accurate updates moving forward.
Looking Ahead
While the first half of FY26 looks promising, Tamawood remains cautious about the second half due to potential margin pressures from increased construction costs and external factors such as weather and regulatory changes. The company’s ongoing investment in AI and productivity enhancements will be critical to sustaining growth and navigating these challenges.
Bottom Line?
Tamawood’s strong first-half momentum sets a high bar, but rising costs and external risks will test its resilience in the months ahead.
Questions in the middle?
- How will rising construction costs specifically impact second-half margins?
- What further AI-driven initiatives does Tamawood plan to implement?
- Will the improved WIP reporting translate into more frequent market updates?