HiTech Reports 3.2% Revenue Decline, Declares 4 Cent Dividend

Revenue and Profitability Pressures in FY26

HiTech Group Australia Limited (ASX:HIT) reported a modest 3.2% decline in revenue for the 2026 financial year, falling to $65.6 million from $67.7 million the previous year. More notably, EBITDA plunged 35% to $5.59 million, reflecting ongoing margin pressures amid challenging macroeconomic conditions and subdued government spending patterns. The company’s EBIT mirrored this trend, dropping 35.6% to $5.54 million.

Gross profit also contracted sharply by 25.5%, underscoring the squeeze on operating margins. Despite these setbacks, HiTech describes profitability as ‘acceptable’ but acknowledges it remains below long-term targets. The company continues to manage operating costs tightly to realign profitability with revenue trends.

Robust Balance Sheet and Dividend Commitment

HiTech’s balance sheet remains a bright spot, with zero debt and a healthy cash reserve of $10.56 million at year-end. Net tangible assets per share stood at 28 cents, marginally up from the prior year. The board declared a fully franked final dividend of 4 cents per share, payable on 22 September 2026, complementing the 4.5 cents interim dividend declared earlier in the year.

Basic earnings per share fell to 9.7 cents from 15.1 cents in FY25, reflecting the profit decline. The company emphasised its strong annuity-style revenue streams, primarily from ICT contractor placements and recruitment services, which continue to underpin steady cash flows despite broader economic headwinds.

Strategic Progress on Hudson Acquisition

HiTech is advancing its acquisition of the Australian operations and selected assets of Hudson Global Resources, a move expected to significantly expand its footprint and diversify service offerings beyond traditional labour hire. The transaction, signed under a binding agreement in July 2026, is subject to conditions precedent and is anticipated to complete in September.

This acquisition aims to strengthen HiTech’s presence across multiple Australian states and enhance its government sector capabilities, particularly within ICT recruitment and professional services. The company expects the deal to be earnings accretive post-integration, supporting margin expansion and long-term growth.

Outlook and Market Positioning

HiTech remains focused on operational improvements and securing higher-margin client engagements, particularly through fixed-term service agreements with federal government agencies such as Defence. These contracts offer a recurring revenue base extending 24 to 36 months, positioning the company to benefit from economies of scale in FY27 and beyond.

The firm is also prioritising employee retention and capability development, recognising the critical role of its specialised ICT workforce in maintaining service quality and client relationships. While acknowledging ongoing macroeconomic uncertainties, HiTech is optimistic about leveraging its strategic foundations and acquisition to capture emerging market opportunities.