Big River Industries has posted a $1.4 million profit for the half-year ending December 2025, reversing a substantial loss from the previous year, while completing a strategic acquisition in Perth.
- Half-year profit of $1.387 million, reversing prior $17 million loss
- Revenue declined 2.6% to $206 million amid market challenges
- EBITDA steady at $14.5 million with improved margin to 7.1%
- Acquisition of Johns Building Supplies in Perth completed
- Fully franked interim dividend of 2.0 cents per share declared
Financial Turnaround Amid Market Headwinds
Big River Industries Limited has reported a notable turnaround in its financial performance for the half-year ended 31 December 2025, posting a net profit after tax of $1.387 million. This marks a significant recovery from a loss of nearly $17 million in the same period last year. Despite a slight 2.6% decline in revenue to $206 million, the company managed to improve its gross profit margins through disciplined pricing, a refined product mix, and closer supplier relationships.
Operational Performance and Market Conditions
The company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) remained resilient at $14.5 million, just marginally down from $14.8 million in the prior corresponding period. Importantly, the EBITDA margin improved slightly to 7.1%, reflecting better operating leverage and ongoing cost control measures. While volumes softened and competitive pressures persisted, Big River’s focus on higher-value segments and operational efficiencies helped stabilise performance. The revenue for the first half of fiscal 2026 also showed a 6.4% increase compared to the second half of fiscal 2025, suggesting early signs of market stabilisation.
Strategic Acquisition and Capital Management
A key highlight of the period was the acquisition of Johns Building Supplies (JBS), a Perth-based building supplies business, completed in mid-December 2025. The acquisition, valued at a maximum of $17.1 million, included cash, shares, and contingent consideration tied to future EBITDA performance. JBS contributed $0.8 million in revenue during the half-year and is expected to strengthen Big River’s footprint in Western Australia. To support growth and integration, the company raised over $10 million through a shareholder entitlement offer in December and successfully extended its banking facilities with National Australia Bank, ensuring liquidity and financial flexibility.
Balance Sheet and Intangible Assets
The acquisition increased goodwill and intangible assets on the balance sheet, with goodwill rising to $46.8 million. The company conducted impairment testing and noted some sensitivity in the Panels division goodwill valuation, indicating potential risks if market conditions deteriorate. However, management remains confident in the assumptions underpinning their forecasts. Net tangible assets per share slightly declined to 58.74 cents from 64.39 cents, reflecting the impact of the acquisition and share issuance.
Shareholder Returns and Outlook
Reflecting improved profitability, Big River declared a fully franked interim dividend of 2.0 cents per share, consistent with the final dividend paid in October 2025. The company’s leadership emphasises ongoing strategic initiatives to enhance sustainable growth, including system integration and supply chain alignment. While residential market conditions remain mixed, Big River’s diversified operations and disciplined approach position it well to navigate future challenges.
Bottom Line?
Big River’s return to profit and strategic acquisition set the stage for cautious optimism amid ongoing market uncertainties.
Questions in the middle?
- How will the finalisation of the JBS acquisition accounting impact goodwill and earnings?
- What are the risks to the Panels division goodwill given the sensitivity noted in impairment testing?
- How might the entitlement offer and share issuance affect shareholder dilution and future capital raising?