Structural Monitoring Systems PLC reported a 31% revenue increase to AUD 16.5 million for H1 2025, driven by strong avionics growth and improved profitability despite ongoing litigation and leadership changes.
- 31% revenue growth to AUD 16.5 million in H1 2025
- Avionics segment revenue up 68%, adjusted EBITDA surges
- After-tax loss narrows to AUD 0.1 million from AUD 2.3 million
- Leadership changes include new Non-Executive Chair and Interim CEO
- Progress on FAA approval for CVM™ technology with Boeing
Strong Revenue Growth Driven by Avionics
Structural Monitoring Systems PLC (ASX: SMN) has delivered a robust half-year performance for the six months ended 31 December 2025, reporting a 31% increase in revenue to AUD 16.5 million. This growth was largely propelled by its Avionics segment, which saw revenues climb 68% to AUD 10 million, reflecting higher production volumes and a favourable program mix. The segment’s adjusted EBITDA jumped significantly to AUD 3.8 million, underscoring improved gross margins and operational leverage as volumes increased.
Contract Manufacturing and CVM™ Technology Progress
The Contract Manufacturing division experienced a slight revenue decline of 2% to AUD 6.6 million but improved its adjusted EBITDA to AUD 1.3 million through better pricing discipline and cost management. Meanwhile, the company’s CVM™ Smart Sensor Solutions segment, still in early commercialisation, generated nominal revenue but is advancing towards a critical milestone: Boeing’s submission of the Service Bulletin to the FAA for approval. This regulatory step is pivotal for the technology’s broader adoption and future growth prospects.
Leadership Changes and Litigation Update
The half-year period was marked by notable corporate governance changes. Neville Bassett AM was appointed Non-Executive Chair in December 2025, replacing Ross Love, who was removed as Executive Chair amid ongoing Federal Court litigation involving allegations from Mr Love and related parties. The court declined to grant an injunction against the company and ordered costs to be paid by the former director. Rick Freeman was appointed Interim CEO of the wholly owned subsidiary Anodyne Electronics Manufacturing Corp (AEM), signalling a strategic leadership refresh.
Financial Position and Outlook
Despite recording a modest after-tax loss of AUD 0.1 million, a significant improvement from the prior period’s AUD 2.3 million loss, the Group demonstrated strong operating cash flow of AUD 4.3 million. Net assets remained stable at AUD 23.4 million, with cash balances increasing to AUD 4.6 million. The company continues to focus on expanding its proprietary avionics product offerings and progressing FAA approval for its CVM™ technology, which remains a key strategic priority for 2026.
Investor Considerations
Structural Monitoring Systems PLC’s half-year results reflect a company in transition, strengthening its core avionics business while navigating leadership changes and legal challenges. The progress towards FAA approval for CVM™ technology could unlock new revenue streams, but timing and regulatory outcomes remain uncertain. Investors will be watching closely how the company balances growth ambitions with operational discipline and governance stability in the coming months.
Bottom Line?
With strong avionics momentum and FAA approval on the horizon, Structural Monitoring Systems faces a pivotal year ahead amid leadership and legal uncertainties.
Questions in the middle?
- When will Boeing submit the CVM™ Service Bulletin to the FAA, and how soon might approval follow?
- What impact will ongoing litigation and leadership changes have on company strategy and investor confidence?
- How will Structural Monitoring Systems balance growth in proprietary products with contract manufacturing profitability?