Star Combo Pharma reported a 23% decline in revenue to $11.9 million for the half year ended December 2025, driven by the loss of a major OEM contract and closure of its AustoYou retail business. Despite this, operating profit after tax rose 49% to $413,243, reflecting effective cost management.
- Revenue down 23% to $11.9 million due to OEM contract loss and AustoYou closure
- Operating profit after tax increased 49% to $413,243
- AustoYou retail business ceased trading in October 2025
- No dividend declared for the half year; $500k dividend paid relating to prior year
- Focus on expanding contract manufacturing and commissioning new Smithfield capacity
Revenue Decline Amid Strategic Shifts
Star Combo Pharma Limited has reported a notable 23% drop in revenue for the half year ended 31 December 2025, with total revenue falling to $11.9 million from $15.7 million in the previous corresponding period. This decline was primarily driven by the loss of a significant original equipment manufacturer (OEM) contract, which accounted for a $2.6 million revenue reduction, alongside the closure of the AustoYou retail business, which contributed a further $0.7 million decrease.
Profitability Improves Despite Top-Line Pressure
Contrary to the revenue trend, Star Combo Pharma’s operating profit after tax rose by 49% to $413,243, up from $276,342 in the prior half year. This improvement underscores the company’s effective cost control and operational efficiencies, particularly as it navigated the challenges of losing a major contract and winding down its retail operations. The company’s net tangible asset backing per share also increased slightly to $0.28 from $0.25, reflecting a stable asset base.
AustoYou Retail Business Closure
The AustoYou retail segment, which operated an Australia-China e-commerce platform offering over 5,000 health product lines, ceased trading in October 2025. This closure contributed significantly to the revenue decline, with retail sales dropping 66% to $378,624. The company’s strategic pivot away from retail towards its core manufacturing and distribution business is evident, as it seeks to consolidate and strengthen its contract manufacturing operations.
Strategic Outlook and Capacity Expansion
Looking ahead, Star Combo Pharma remains focused on growing its contract manufacturing business, with plans to commission additional manufacturing capacity at its Smithfield facility. This expansion is expected to support future revenue growth and operational scalability. The company did not declare a dividend for the half year but paid a $500,000 dividend relating to the prior financial year, signalling a cautious approach to capital distribution amid ongoing business transformation.
Financial Position and Governance
Star Combo Pharma’s balance sheet remains solid with total assets of $67.3 million and net assets of $38.7 million as at 31 December 2025. The directors affirmed their confidence in the company’s ability to meet its debts as they fall due. No significant changes in the state of affairs or material events have occurred since the reporting date, aside from the cessation of AustoYou’s operations.
Bottom Line?
Star Combo Pharma’s ability to boost profitability despite revenue headwinds sets the stage for a critical test of its manufacturing growth strategy in the coming months.
Questions in the middle?
- How will the loss of the major OEM contract impact long-term revenue stability?
- What are the expected timelines and financial implications of the Smithfield capacity expansion?
- How will the closure of AustoYou affect Star Combo’s market presence in China?