Finbar Group delivered its strongest profit since FY15 with a 41% rise in NPAT to $20.3 million despite a 28% revenue decline, underpinned by record pre-sales and a robust development pipeline exceeding $1.8 billion.
- 40.9% increase in net profit after tax to $20.3 million
- Record pre-sales hit $567.2 million at June 2026
- Revenue declined 28% to $204.3 million due to project timing
- Strong balance sheet with $50.7 million cash and 3% debt ratio
- Five-year development pipeline expanded to $1.8 billion
Profit Surge Despite Revenue Dip
Finbar Group Limited (ASX:FRI), Western Australia’s prominent apartment developer, posted a 40.9% jump in net profit after tax (NPAT) to $20.3 million for the financial year ended 30 June 2026. This marks its strongest profit since FY15, comfortably within guidance of $18 million to $22 million. The uplift came despite a 28.2% fall in revenue to $204.3 million, reflecting the timing and mix of project completions, with settlements easing 18% to 287 lots.
The company’s gross profit margin improved to 20.2%, up from 12.1% in FY25, driven by successful sell-downs of completed stock including the recently finished Bel-Air Apartments in Belmont. Operational efficiencies and a leaner cost base also contributed to a 29% rise in operating profit to $27.5 million.
Record Pre-Sales and Strong Pipeline
Finbar recorded a record $567.2 million in total pre-sales at year-end, with average monthly off-the-plan sales of $29.1 million across 35 lots. This robust order book was supported by successful launches of Riverbank Residences, Palmyra West Apartments, and Romeo Applecross, providing strong visibility over future settlements as projects advance.
The company’s development pipeline remains substantial, with projects under construction valued at $515.1 million and a five-year pipeline exceeding $1.8 billion, spanning over 1,700 units. Notably, Finbar recently acquired a prime 5,317sqm site at 172-176 Great Eastern Highway, Ascot, for $7.5 million, targeting a $150 million end value and market launch in 2027, further expanding the pipeline to nearly $2 billion.
Balance Sheet Strength and Capital Management
Finbar’s balance sheet strengthened significantly with cash and term deposits rising 39% to $50.7 million and net debt reducing by $36.4 million to a low 3% debt-to-capital ratio. The company fully repaid project loans including the remaining $5.5 million loan on Bel-Air in July 2026, enhancing financial flexibility to fund future land acquisitions and project equity.
The Board declared a fully franked final dividend of 3 cents per share, bringing total FY26 dividends to 5.5 cents per share. The dividend reinvestment plan remains suspended for the year.
Market Context and Strategic Focus
Finbar continues to focus on affordable, mid-tier apartments in prime, transit-connected Perth precincts, addressing the state’s housing supply gap amid strong population growth. Western Australia leads the nation with 2.2% population growth over the past year, driven by strong interstate and overseas migration, supporting ongoing demand for apartments. The Perth apartment market outperformed other capitals with 22.7% annual growth in median sale prices and rental yields around 3.8%.
CEO Ronald Chan highlighted the company’s disciplined approach: “Our record pre-sales provide clear visibility over future settlements and give us confidence as we progress our substantial five-year development pipeline. We remain focused on delivering high-quality apartment communities that meet the needs of our customers while contributing to the supply of much-needed housing.”
Governance and Leadership Updates
The year saw governance changes with John Chan transitioning from Executive Chairman to Non-Executive Chairman in March 2026, and Melissa Chan appointed as Executive Director and Chief Operating Officer. The Board maintains a strong focus on risk management, corporate governance, and ethical standards, supported by an experienced executive team.
The company’s audit, conducted by KPMG, returned an unqualified opinion, with particular attention on investment property valuations, which comprise 12% of total assets. The valuation methodology and assumptions were deemed appropriate and consistent with prior years.
What to Watch Next
Investors should keep an eye on Finbar’s execution of its $1.8 billion-plus development pipeline, including the upcoming market launch of the Ascot project and progress on Garden Towers, Riverbank Residences, and Palmyra West. The company’s ability to sustain pre-sales momentum and manage construction costs amid evolving market conditions will be critical. Additionally, the impact of federal tax reforms effective July 2027 on investor demand for new-build apartments remains a key variable.
Bottom Line?
Finbar’s strong profit growth and record pre-sales underscore its solid position, but delivering on a $1.8 billion pipeline amid shifting market dynamics will test its execution discipline.
Questions in the middle?
- How will Finbar navigate potential cost pressures and supply chain risks in its large development pipeline?
- What impact will the 2027 federal tax reforms have on investor appetite for new apartment projects?
- Can Finbar maintain its high pre-sales rates and operational efficiency as it scales construction activity?