Acquisition Costs and Amortisation Pressure Kelly Partners’ Statutory Profit
Kelly Partners Group Holdings Limited reported a 17% rise in revenue for the half-year to December 2025, while statutory profit fell 15.5% due to acquisition costs and higher amortisation. Underlying earnings showed solid growth, reflecting the firm's core business strength.
- Revenue increased 17% to $75.99 million
- Statutory net profit attributable to owners declined 15.5% to $2.11 million
- Underlying NPATA rose 12.8% to $5.56 million
- Multiple acquisitions contributed $4.82 million revenue and $455,000 net profit before tax
- No dividends declared; working capital deficit linked to acquisition financing
Revenue Growth Amid Strategic Acquisitions
Kelly Partners Group Holdings Limited has reported a robust 17% increase in revenue to nearly $76 million for the half-year ended 31 December 2025. This growth was driven by the firm's ongoing expansion strategy, including several acquisitions across Australia, the United States, and the Philippines.
The acquisitions, completed between August and December 2025, contributed approximately $4.8 million in revenue and $455,000 in net profit before tax and amortisation, underscoring the group's commitment to broadening its service footprint in accounting and outsourced professional services.
Underlying Earnings Strengthen Despite Statutory Profit Pressure
While statutory net profit attributable to shareholders declined by 15.5% to $2.11 million, this figure was notably impacted by increased amortisation of customer relationship intangibles and one-off acquisition-related expenses. Amortisation expenses rose to $4.7 million, up from $3.45 million in the prior corresponding period.
Importantly, the underlying net profit after tax before amortisation (Underlying NPATA), a key measure of the group's core earnings, increased by 12.8% to $5.56 million. This suggests that the operational performance of Kelly Partners remains solid, with growth in earnings before the accounting impacts of acquisitions.
Balance Sheet and Cash Flow Considerations
The group's net assets increased to $71.66 million, reflecting the value added through acquisitions and organic growth. However, the company reported a working capital deficit of $34.7 million, primarily due to current lease liabilities and bank loans associated with recent acquisitions.
Kelly Partners has secured temporary overdraft facilities totaling $7.87 million to support acquisition funding, with ongoing negotiations to refinance these into amortising term debt. The company remains compliant with its financial covenants, providing some reassurance on liquidity and financial stability.
Dividend Policy and Shareholder Returns
No dividends were declared or paid during the half-year, continuing the suspension announced in early 2024. The board appears focused on reinvesting earnings to support growth initiatives and manage acquisition-related debt, signalling a cautious approach to shareholder returns in the near term.
Kelly Partners continues to operate under its Partner-Owner-Driver® model, aligning interests between the company, its partners, and clients, which management believes will underpin long-term value creation.
Bottom Line?
Kelly Partners’ underlying earnings growth and strategic acquisitions position it well, but investors should watch how acquisition costs and refinancing shape future profits.
Questions in the middle?
- How will the refinancing of acquisition-related debt impact Kelly Partners’ financial flexibility?
- What is the timeline for resuming dividend payments given current cash flow and debt levels?
- How effectively will recent acquisitions integrate and contribute to sustained earnings growth?
