Delayed Projects Push AVA Risk Group to $1.18M Loss Despite Strategic Funding

Half-Year Financial Performance

AVA Risk Group Limited has revealed a challenging first half for FY2026, with revenue falling 17% to $14.1 million compared to the previous year’s $17.1 million. The decline was primarily driven by delays in the Detect segment, where several key projects were postponed, pushing expected revenue recognition into the second half of the financial year. This revenue shortfall contributed to a net loss after tax of $1.179 million, a significant increase from the modest $23,000 loss reported in the prior corresponding period.

Despite the loss, the company’s EBITDA showed improvement, narrowing the negative gap as operating costs remained stable and gross margins held firm at 64%. The stable cost base positions AVA well to leverage revenue growth when delayed projects commence.

Strategic Investment and Capital Position

In a notable development, AVA secured a binding agreement with Hale Capital for a strategic investment package totaling up to $12.6 million. This includes $7 million via a Convertible Loan Note and $5.6 million through associated Warrants. The initial tranche of $2.98 million was received in January 2026, with shareholder approval sought for the remaining $4.02 million tranche in a special meeting scheduled for March 2026.

This capital injection is earmarked to support AVA’s growth ambitions, particularly its expansion into the U.S. market, which the company identifies as its largest and most attractive addressable market. The partnership with Hale Capital not only provides growth capital but also aligns AVA with a strategic investor focused on its long-term success.

Order Backlog and Market Focus

AVA’s confirmed sales order backlog stands at $7.8 million, including $2.6 million in contracted annual recurring revenue. The backlog comprises equipment orders and multi-year service contracts, underscoring the company’s growing recurring revenue base. Key sectors driving this pipeline include sovereign border protection, transport infrastructure, and telecommunications.

Significant contracts awarded during the half include a $1.2 million rail infrastructure project supplying Aura Ai-X fibre sensing systems, and orders for airport perimeter protection in Morocco and Athens. The sovereign border protection segment is gaining momentum with a $0.5 million contract in Latvia and further opportunities anticipated in Eastern Europe and the Middle East.

Telecommunications remains a strategic growth area, with AVA deepening its relationship with Telstra and participating in the Telstra Together 26 roadshow to showcase its technology’s capacity to protect critical infrastructure, including subsea cables.

Outlook and Market Expectations

Looking ahead, AVA expects a significant turnaround in H2 FY2026 as delayed projects are delivered and new contracts close. Notable expected revenue includes $1 million from U.S. corrections facilities, $0.7 million from U.S. government sites delayed by earlier shutdowns, and multiple contracts across transport, energy, and border protection sectors totaling several million dollars.

The company anticipates that stable operating margins and a consistent cost base will translate this revenue growth into improved earnings. AVA’s focus on expanding its recurring revenue streams and penetrating high-value verticals underpins its confidence in a stronger second half.