Desane Group Holdings reports a modest half-year profit with stable assets and gearing, completes a key property sale, and pushes forward with a major industrial development in Penrith.
- HY25 EBIT of $0.8 million and net profit of $0.2 million
- Total assets steady at $103.9 million; gearing remains low at 33.5%
- Refinanced property debt on favourable terms with National Australia Bank
- Sold 13 Sirius Road, Lane Cove for $8.7 million
- Progressing 1.2ha Thornton industrial development in Penrith with $40 million projected realisation
Financial Performance and Capital Management
Desane Group Holdings Limited (ASX: DGH) has reported a steady financial performance for the half year ended 31 December 2025, delivering an EBIT of $0.8 million and a net profit after tax of $0.2 million. Total assets remained largely unchanged at $103.9 million, while net tangible assets per share held firm at $1.69. The company’s overall gearing ratio stayed conservative at 33.5%, reflecting a cautious capital structure amid ongoing market uncertainties.
Capital management was a highlight, with Desane successfully refinancing its property debt on favourable terms through National Australia Bank, enhancing financial flexibility. The group also maintained healthy liquidity, holding $9.5 million in cash reserves, and returned value to shareholders via a special partially franked dividend of 2 cents per share paid in December 2025.
Operational Highlights and Property Transactions
Operationally, Desane improved its leasing profile, positioning the company for stronger earnings in the upcoming fiscal years. A significant milestone was the completion of the sale of 13 Sirius Road, Lane Cove, for $8.7 million, a transaction that bolstered cash flow and reduced investment property exposure.
The company’s interest income also contributed positively, with cash and financial assets generating an average return of 5.4% per annum, underscoring prudent treasury management.
Development Pipeline and Market Outlook
Looking ahead, Desane is advancing the development of its 1.2-hectare industrial site at Thornton, Penrith. This project is expected to deliver approximately 44 industrial units with a gross realisation value around $40 million. Completion is targeted over FY27 and FY28, promising a meaningful contribution to future earnings.
Despite persistent inflationary pressures and volatile interest rates affecting the broader property market, Desane remains optimistic about demand for quality, well-located industrial sites. However, the company acknowledges that high construction costs continue to challenge project feasibilities across the sector. Management has committed to a disciplined and proactive approach to navigate these headwinds in the second half of FY26.
Governance and Compliance
Desane continues to comply fully with environmental and occupational health and safety regulations, maintaining its commitment to responsible operations. The board, led by Non-executive Chairman John Sheehan AM and Managing Director Rick Montrone, remains focused on delivering shareholder value through strategic asset management and development initiatives.
Bottom Line?
Desane’s steady half-year results and strategic development plans set the stage for cautious optimism, but rising construction costs remain a key challenge to watch.
Questions in the middle?
- How will ongoing construction cost inflation impact the feasibility and timing of the Thornton development?
- What are the prospects for leasing demand in Desane’s industrial portfolio amid broader economic uncertainties?
- Could Desane consider interim dividends in future periods as earnings stabilise or grow?