Connexion Mobility Ltd reported a 7% rise in revenues and a 5% increase in profit after tax for the half-year ended December 2025, while expanding its SaaS footprint and acquiring a strategic stake in Covertrue Group.
- 7% revenue growth to US$5.83 million
- 5% profit after tax increase to US$1.14 million
- 27.28% acquisition in Covertrue Group Pty Ltd
- Continued share buyback with 17.2 million shares repurchased
- Reduced R&D growth spend focusing on existing projects
Solid Financial Performance Amid Strategic Expansion
Connexion Mobility Ltd (ASX – CXZ) has delivered a steady financial performance for the half-year ended 31 December 2025, reporting a 7% increase in revenues to US$5.83 million and a 5% rise in profit after tax to US$1.14 million. The company’s continued focus on its automotive fleet and rental management software as a service (SaaS) solutions in the United States underpinned this growth, despite a slight contraction in gross profit margins.
While gross profit decreased marginally to US$3.59 million from US$3.81 million in the prior comparable period, Connexion’s disciplined cost management and strategic investments helped sustain profitability. The company’s working capital surplus improved to US$2.01 million, reflecting a stronger balance sheet position.
Strategic Investment in Covertrue Group
A notable highlight of the period was Connexion’s acquisition of a 27.28% stake in Covertrue Group Pty Ltd, an Australian fleet branding business operating under Liberty Signs. This investment, completed in September 2025, includes stapled redeemable notes with a 12% annual interest rate, positioning Connexion to benefit from Covertrue’s earnings growth and potential future ownership expansion.
Management classifies this stake as an associate investment, reflecting significant influence without control. This move diversifies Connexion’s income streams beyond its core SaaS offerings, aligning with its long-term objective to enhance earnings sustainability and diversification.
Operational Focus and Product Development
Connexion continued to invest in research and development (R&D) and sales and marketing, albeit with a 16% reduction in growth spend compared to the prior period. The company concentrated on enhancing existing projects, including its Marketplace platform and features such as CheckMyDriver, UVeye, Paid Rental, and Reporting & Analytics.
During the half, Connexion added 47 new product sales or trials, signaling improving traction within its existing dealership customer base. The company is actively pursuing revenue diversification through deeper engagement with original equipment manufacturers (OEMs), franchised dealerships, and expansion into new markets.
Capital Management and Share Buybacks
Capital management remains a key priority, with Connexion repurchasing 17.2 million shares at an average price of A$0.026 during the half-year. This brings total shares bought back to approximately 254 million at an average price of A$0.02. The company emphasises that buybacks will not constrain organic investment initiatives and will be considered only after internal growth projects are fully funded.
No dividends were declared or paid during the period, consistent with prior practice, as Connexion focuses on reinvesting capital to strengthen its competitive position and earnings base.
Outlook and Market Position
Looking ahead, Connexion remains optimistic about the adoption of its SaaS solutions by OEMs and dealerships, driven by the need to improve customer experience, operational efficiency, and risk management. The company highlights its large user base and relatively small share of dealership software budgets as opportunities for growth.
Connexion plans to grow its SaaS revenue through proprietary feature development, commercial partnerships, and expanding its user base across new OEMs and dealerships. The company’s progress aligns with the strategic plan presented at its most recent annual general meeting.
Bottom Line?
Connexion Mobility’s steady growth and strategic investments set the stage for a potentially stronger market position, but investors will watch closely for how the Covertrue stake and share buybacks translate into long-term value.
Questions in the middle?
- How will the Covertrue investment impact Connexion’s earnings and strategic direction over the next few years?
- What is the company’s plan to accelerate revenue growth beyond its current US dealership base?
- Will Connexion consider resuming dividends or increasing buyback activity as organic growth stabilises?