Schaffer Corporation Limited reported a significant 61% drop in net profit and a 17% decline in revenue for the half-year ended December 2025, impacted by operational disruptions and softer market conditions. Despite the downturn, the company declared a fully franked interim dividend of 45 cents per share.
- Revenue down 17% to $93.5 million
- Net profit falls 61% to $5 million
- Interim dividend declared at 45 cents per share, fully franked
- Automotive Leather segment hit by Jaguar Land Rover cyberattack
- Building Materials segment affected by reduced government infrastructure spending
Half-Year Financial Overview
Schaffer Corporation Limited has revealed a challenging first half for the 2025 financial year, with revenues declining 17% to $93.474 million and net profit attributable to members plunging 61% to $4.981 million. The company’s interim dividend of 45 cents per share, fully franked, signals confidence despite the profit contraction, payable on 13 March 2026.
Operational Disruptions and Market Pressures
The Automotive Leather division, a core part of Schaffer’s manufacturing footprint, was notably impacted by a cyberattack on Jaguar Land Rover (JLR) during September and October 2025. This incident forced a temporary production shutdown at JLR, disrupting supply chains and sales volumes. Production resumed in November with a gradual return to normal sales levels, but the interruption weighed heavily on half-year results.
Meanwhile, the Building Materials segment, operating through Delta Corporation Limited, faced a tough market environment. The segment recorded a small loss as Western Australia’s government significantly scaled back spending on large civil infrastructure projects. This contraction intensified competition and compressed margins, further challenging profitability.
Investment Portfolio and Balance Sheet Strength
On a brighter note, Schaffer’s Group Investments segment delivered improved profits, buoyed by higher unrealised gains on equity investments. The company’s net tangible asset backing per share rose slightly to $17.30, reflecting steady asset values and prudent balance sheet management. Cash and liquidity positions remain robust, with available bank facilities increased to $121.5 million, providing financial flexibility.
Outlook and Strategic Considerations
While the half-year results underscore the impact of external shocks and market softness, Schaffer’s diversified business model offers some resilience. The recovery trajectory of the Automotive Leather segment post-cyberattack and the potential for infrastructure spending to rebound will be key factors to watch. The declared dividend also suggests management’s commitment to shareholder returns despite near-term earnings pressure.
Bottom Line?
Schaffer Corporation’s next challenge will be navigating recovery in its core manufacturing operations amid uncertain infrastructure demand.
Questions in the middle?
- How quickly will Automotive Leather fully recover sales volumes with Jaguar Land Rover?
- What is the outlook for government infrastructure spending impacting Building Materials?
- Could further cyber risks affect operational stability going forward?