HighCom Limited has updated its FY26 second half guidance, now forecasting EBITDA losses between $1.2 million and $1.6 million, an improvement on the first half but shy of earlier breakeven expectations, alongside revenue growth of 70% to 100%.
- H2 FY26 EBITDA loss guidance revised to $1.2M-$1.6M
- H2 revenue expected 70%-100% above H1's $10.9M
- Deferral of armour revenue into FY27 impacts timing
- Stronger technology business partially offsets delays
- No immediate capital raising anticipated
Second Half EBITDA Loss Narrower but Profitability Still Out of Reach
HighCom Limited (ASX:HCL) has trimmed its expectations for the second half of FY26, now forecasting an EBITDA loss between $1.2 million and $1.6 million. While this marks a significant improvement from the first half's $5.4 million loss, it falls short of the breakeven or profitable outcome the company had signalled back in March.
Revenue Growth Slower Than Previously Guided
The company expects H2 revenue to rise 70% to 100% above the $10.9 million recorded in H1 FY26, down from the earlier forecast of 100% to 150% growth. This tempered outlook largely stems from the deferral of certain armour orders into FY27 and shifts in product mix, despite stronger-than-anticipated performance from HighCom's technology division.
Timing and Product Mix Drive Revised Guidance
HighCom attributes the guidance revision primarily to timing issues around revenue recognition rather than any fundamental deterioration in business performance. The armour segment's later-than-planned revenue rebound and the postponement of some contract deliveries have pushed revenue into the next fiscal year. Meanwhile, the technology business, which supplies advanced small uncrewed aerial systems and sensor payloads to Australian Defence, has delivered a more robust performance, partially offsetting the delays in armour sales.
Cash Position Stable, No Capital Raise Expected
Despite the softer guidance, HighCom reassures that it maintains an adequate cash position and does not anticipate any immediate need to raise additional capital. This stability follows recent funding initiatives, including a $4.5 million loan facility secured in May and a $7.8 million capital raise earlier in the year, which have bolstered the company's financial flexibility.
Audit and Year-End Finalisations Pending
The updated outlook is based on unaudited management accounts and remains subject to final contract timings and audit completion. HighCom also notes that inventory carrying value assessments and other accounting matters are yet to be finalised as part of the year-end process, which could influence the final reported results.
Bottom Line?
HighCom’s updated guidance highlights the challenges of timing and product mix in a recovery phase, with a clearer picture expected post-audit and into FY27.
Questions in the middle?
- Will deferred armour revenues in FY27 translate into sustainable growth or further delays?
- How will the stronger technology segment influence overall profitability in the coming years?
- Could inventory or accounting adjustments materially alter the final FY26 results?