Coventry Group Ltd posted a modest revenue increase to $187.4 million for the half year ended December 2025, but underlying EBITDA plunged 67.7% amid a statutory net loss of $9.7 million. A strategic review is underway as the company suspends dividends to focus on debt reduction and growth.
- Revenue rises 1.5% to $187.4 million
- Underlying EBITDA falls 67.7% to $3.2 million
- Statutory net loss widens to $9.7 million
- Net debt slightly reduced to $54.9 million
- Dividend suspended pending strategic review
Revenue Growth Masks Profitability Challenges
Coventry Group Ltd, a key player in industrial supply and services across Australia and New Zealand, reported a slight revenue increase to $187.4 million for the six months ended 31 December 2025, up 1.5% from the prior corresponding period. However, this top-line growth belies a sharp decline in profitability, with underlying EBITDA tumbling 67.7% to $3.2 million and a statutory net loss of $9.7 million, compared to a modest loss of $0.7 million in the previous half.
Segment Performance Highlights Fluid Systems Resilience
The Group’s two main segments showed divergent trends. Fluid Systems revenue grew 4.0%, though its underlying EBITDA fell 12.5%, indicating margin pressure despite sales gains. Trade Distribution sales were largely flat, up just 0.4%, but underlying EBITDA plunged 46.5%, reflecting operational challenges in this core business. These results underscore the complexity of navigating competitive and cost pressures in industrial markets.
Balance Sheet and Cash Flow Underpin Strategic Priorities
Coventry’s net debt position improved slightly to $54.9 million from $56.3 million at 30 June 2025, supported by ongoing cost-saving initiatives. The company’s net tangible assets per security declined to 19 cents from 27 cents, reflecting the impact of losses and asset revaluations. Cash flow from operations was positive but down significantly, highlighting the need for disciplined capital management.
Dividend Suspension and Strategic Review Signal Caution
In light of the financial results, the Board has suspended interim dividends to prioritise debt reduction and fund growth initiatives. A strategic review announced in January 2026 is underway, aiming to identify pathways to restore profitability and operational efficiency. Management remains optimistic about market conditions improving in the second half of the fiscal year but acknowledges the challenges ahead.
Leadership and Governance Stability
The half-year period saw the appointment of Nissim (Nik) Alpert as Managing Director and CEO in September 2025, signaling a leadership refresh aligned with the company’s turnaround efforts. The Directors reaffirmed confidence in Coventry’s ability to continue as a going concern despite the losses, supported by the independent auditor’s review which found no material misstatements or impairments.
Bottom Line?
Coventry Group’s next steps hinge on the strategic review’s outcomes as it seeks to reverse profit declines and stabilise its financial footing.
Questions in the middle?
- What specific operational changes will the strategic review recommend to improve profitability?
- How sustainable are the cost savings achieved in the first half, and what further efficiencies can be realised?
- What is the outlook for debt covenant compliance and refinancing risks amid ongoing losses?