Stealth Group Holdings has delivered record half-year results for 1H26, boosted by its strategic acquisition of Hardware & Building Traders and a strengthened balance sheet. The company is now targeting over $500 million in sales by FY28, signalling ambitious growth in Australia's fragmented hardware and industrial distribution market.
- Record 1H26 sales up 11.8% to $82.2 million
- Net profit after tax jumps 51.4% to $1.6 million
- Acquisition of Hardware & Building Traders expands footprint to ~1,200 locations
- Balance sheet strengthened with $19.5 million capital raise and net debt reduced to $7.3 million
- FY28 guidance upgraded to $500m+ sales with 8–12% EBITDA margin
Record Half-Year Performance Signals Structural Growth
Stealth Group Holdings Ltd (ASX: SGI) has reported a landmark half-year financial performance for the six months ending December 2025, underscoring its evolution into Australia's largest independent distributor in the hardware, industrial, safety, and consumer products sectors. The company posted sales of $82.2 million, an 11.8% increase on the prior corresponding period, alongside a striking 51.4% rise in net profit after tax to $1.6 million.
This growth is not merely incremental but reflects a strategic repositioning driven by the acquisition of Hardware & Building Traders (HBT) in November 2025. The acquisition added approximately 1,200 hardware and industrial locations and an $800 million annual purchase volume, significantly enhancing Stealth’s scale and market presence.
Capital Strength and Operational Efficiency
Stealth’s balance sheet has been notably fortified through a $19.5 million capital raise completed in late 2025, boosting cash reserves to $32.5 million; a 212.5% increase; and reducing net debt by 34% to $7.3 million. This financial flexibility supports the company’s capital-light growth model and positions it to capitalise on market opportunities while managing risks amid ongoing macroeconomic challenges such as cost pressures and geopolitical uncertainty.
Operationally, the company improved its cost efficiency, reducing the cost of doing business by 4.2% to $15.8 million, while maintaining a healthy gross profit margin of 29.4%. EBITDA rose 17.5% to $5.4 million, reflecting disciplined overhead management and revenue growth.
Strategic Growth and Market Positioning
Stealth Group’s strategy leverages its integrated wholesale, B2B distribution, and retail platform to capture market share in a highly fragmented $93 billion Australian home living and building environment market. The company now represents approximately 1.7% market share in this sector and holds a strong position in the $60 billion industrial maintenance, repair, and operations market.
Key growth drivers include expanding the HBT platform’s procurement scale, rolling out exclusive and own-label brands, and launching new services such as tool hire and loyalty reward programs. The company also continues to deepen its digital and marketplace presence, recently commencing trading on JB HiFi and Woolworths marketplaces.
Confident Outlook and Ambitious FY28 Targets
Looking ahead, Stealth Group expects the second half of FY26 to outperform the first half, with net profit anticipated to exceed FY25 levels. The integration of HBT is progressing smoothly, and procurement optimisation initiatives are underway.
The company has upgraded its FY28 guidance, targeting net sales exceeding $500 million, EBITDA margins between 8% and 12%, and net profit margins of 5% to 8%. This ambitious growth trajectory is underpinned by multiple embedded earnings engines and a clear execution roadmap focused on scaling the national platform, expanding membership, and enhancing product and service offerings.
Stealth Group’s management emphasises that this growth is structural, not incremental, reflecting a capital-efficient expansion that positions the company as a formidable independent alternative to major players in the Australian hardware and industrial distribution landscape.
Bottom Line?
Stealth Group’s record 1H26 results and strategic acquisition set the stage for transformative growth, but execution risks and market volatility remain key watchpoints.
Questions in the middle?
- How effectively will Stealth integrate HBT’s operations and realise anticipated synergies?
- What impact will ongoing macroeconomic pressures have on Stealth’s margin expansion plans?
- Can Stealth sustain its market share gains amid competition from major incumbents like Bunnings?