Stealth Group Doubles Profit on HBT Acquisition, Eyes $500m Sales by FY28

• Record FY26 sales of $165.1 million, up 13.8%
• Net profit after tax surges 86.3% to $5.8 million
• Hardware & Building Traders acquisition expands network to 1,200+ stores
• FY28 sales target upgraded to $500 million with 8–12% EBITDA margin
• Strong balance sheet with $32.1 million cash and low net debt

Profitability Inflection as Scale Accelerates

Stealth Group Holdings Ltd (ASX:SGI) has delivered a landmark year, reporting an 86.3% surge in net profit after tax to $5.8 million for FY26, alongside a 13.8% lift in sales to $165.1 million. This marks the company’s twelfth consecutive year of sales growth and a clear inflection point in profitability as its expanded platform begins to pay dividends.

Underlying revenue rose 6.7% on a like-for-like basis to $146.0 million, while statutory EBITDA jumped 46.2% to $14.4 million, lifting the EBITDA margin to 8.7% of sales. Earnings per share climbed 56.7% to 4.12 cents, reflecting both organic momentum and the impact of the recent acquisition of Hardware & Building Traders (HBT).

HBT Acquisition Transforms Scale and Market Position

The $22 million acquisition of HBT in November 2025 was the defining event of FY26, instantly expanding Stealth’s footprint by adding over 1,165 independent member stores and boosting its supplier network from roughly 800 to 1,300. The enlarged group now commands a purchasing ecosystem exceeding $770 million, up from $100 million pre-acquisition, creating Australia’s largest independent distribution platform across hardware, industrial, safety and home improvement sectors.

HBT contributed nearly $9 million in revenue and $2.9 million in net profit for the eight months post-acquisition, with integration efforts well advanced. Stealth has unified back-office systems, consolidated procurement terms, and launched central billing for HBT members, aiming to convert $200 million of member order value onto its platform by FY28. This central invoicing rollout is a key driver of the upgraded sales target and margin expansion.

Upgraded FY28 Targets Reflect Growth Confidence

Buoyed by the expanded scale and integration progress, Stealth has lifted its FY28 sales target from $300 million to $500 million, with an EBITDA margin goal of 8–12% and net profit after tax margin of 5–8%. The company expects capital expenditure to remain modest at around 1.5% of sales, consistent with its asset-light model.

Growth priorities include monetising the existing $770 million purchasing ecosystem; targeting a leap from 21% to 75% conversion into recognised sales; expanding product categories (now 29, up from 13), and growing supplier partnerships. Stealth is also focused on broadening customer segments across commercial, trade and DIY markets, expanding its national network of company-owned and independent stores, and enhancing digital and operational productivity.

Robust Balance Sheet and Cash Flow Support Ambitions

Stealth’s financial position remains solid, with cash balances more than doubling to $32.1 million and net debt to EBITDA falling to 0.5 times, the lowest leverage in five years. The company completed a $19.5 million capital raise at $1.00 per share to fund the HBT acquisition and integration, strengthening its institutional investor base.

Operating cash flow was $7.9 million, supporting ongoing investments in private label product development, digital commerce channels, technology systems, and store refurbishments. The Board declared a fully franked final dividend of 1.5 cents per share, up 50% from the prior year, reflecting confidence in sustained cash generation.

Strategic Execution and Market Positioning

Stealth’s integrated model now spans over 1,200 stores, including 10 company-owned outlets and a vast independent retailer network under the HBT banner. The company supplies a broad product range across hardware, timber, building supplies, industrial MRO, safety, and consumer retail categories, supported by a national sales force, distribution centres, and digital channels including marketplaces such as Woolworths, Amazon, and JB Hi-Fi.

Exclusive distribution agreements for brands like Casetify, Belkin, Ember, PanzerGlass, and Tech21, alongside own-label brands CAT, Harden Tools, and RIVO Safety, underpin product differentiation and margin expansion. The rollout of these brands into 42 hardware stores is expected to drive further sales and profitability gains in FY27 and beyond.

What to Watch Next

FY27 has started strongly with more than $100 million of new annualised sales secured, progressively commencing across the HBT, Heatleys, and C&L businesses. Consumer retail sales are forecast to rebound by 20% following new brand wins and customer contracts. A further $130 million of sales opportunities are in planning and negotiation, targeted to commence in the second half of FY27.

Investors will be keen to monitor the pace and success of the HBT central billing rollout, the conversion of embedded purchasing volume into recognised revenue, and the execution of category expansion initiatives. The company’s ability to maintain margin expansion while scaling sales will be critical to achieving its ambitious FY28 targets.

Stealth’s low leverage and strong cash position provide flexibility to pursue organic growth and potential strategic acquisitions, positioning it as a formidable independent competitor in Australia’s fragmented $120 billion workplace and home supply market.

Bottom Line?

Stealth’s FY26 results mark a clear profitability inflection, with the HBT acquisition unlocking a vast growth runway. Execution of integration and conversion initiatives will be pivotal as the company targets $500 million in sales by FY28.

Questions in the middle?

• How swiftly will Stealth convert HBT’s embedded purchasing volume into recognised sales?
• What margin pressures or opportunities might arise as the product range and supplier network expand?
• Could further strategic acquisitions accelerate Stealth’s path to its FY28 targets?