BSA Limited reported an 84% plunge in revenue for the half-year ending December 2025, driven by lost contracts and reduced volumes, yet managed a $6.3 million profit amid restructuring and cost controls. Significant board changes signal a strategic reset as the company navigates uncertain waters.
- Revenue plunged 84% to $23.4 million due to lost nbn, Bluecurrent, and Intellihub contracts
- EBITDA fell 58% to $5.9 million but showed improved margin conversion
- Net profit after tax declined 19% to $6.3 million
- Operating cash flow swung to a $4.8 million outflow, impacted by restructuring costs
- Board reshuffle with new chair and director appointments post-period
Revenue Collapse Amid Contract Losses
BSA Limited’s half-year results for the period ending 31 December 2025 reveal a dramatic 84% drop in revenue to $23.4 million, a stark contrast to the $148.3 million reported in the prior corresponding period. This steep decline stems primarily from the loss of key contracts and reduced volumes with major clients including nbn, Bluecurrent, and Intellihub. The company’s failure to secure the new nbn Field Module contract and volume reductions in smart metering projects have severely impacted top-line performance.
Profitability and Cost Discipline
Despite the revenue shock, BSA managed to post a net profit after tax of $6.3 million, down 19% from $7.9 million a year earlier. EBITDA fell 57.9% to $5.9 million but showed a notable improvement in conversion rate to 26%, up from 9.5%. This was largely due to non-recurring transition payments from nbn and other projects, alongside stringent cost control and margin management. The company’s focus on operational efficiency has partially offset the volume-driven revenue decline.
Cash Flow and Balance Sheet Position
Operating cash flow swung to a negative $4.8 million, influenced heavily by $5.9 million in redundancy-related outflows as the company completed a significant restructuring. Excluding these costs, operating cash flow was a modest positive $1.1 million. BSA’s balance sheet remains stable with $18.8 million in cash, including $1.7 million restricted cash, and no debt. The company maintains a $2.6 million guarantee facility, with $2.1 million utilised and 75% cash-backed since October 2025.
Governance Changes and Strategic Outlook
Post-reporting period, BSA underwent notable governance changes. Daniel Raihani was appointed Chair, replacing Nick Yates, while Paul Heick and Warwick Sauer resigned as directors. Piers Lewis joined as a new non-executive director, and Robert Featherby replaced Nanda Herling as company secretary. These moves aim to support continuity and align with strategic priorities amid challenging market conditions.
Looking Ahead: Risks and Opportunities
BSA acknowledges the risk of potential unprofitability in the second half of the financial year due to ongoing contract uncertainties. The company is actively pursuing organic growth and new client engagements within existing sectors but faces a material uncertainty regarding its going concern status. Management remains confident in its liquidity position for at least 12 months based on current forecasts, though execution risks remain. The company’s ability to stabilise revenue streams and secure new contracts will be critical to its recovery trajectory.
Bottom Line?
BSA’s half-year results underscore a company in transition, balancing sharp revenue losses with disciplined cost control and governance renewal as it seeks a path back to growth.
Questions in the middle?
- Can BSA secure new contracts to offset the significant volume declines from nbn and smart metering clients?
- How will the recent board changes influence strategic direction and operational execution?
- What are the prospects for returning to positive operating cash flow amid ongoing restructuring and market challenges?