Redox Limited reported a robust FY26 with profit after tax rising 19.2% to $91.9 million on record revenue of $1.33 billion, supported by strong North American growth and improved margins. The company declared a fully franked final dividend of 6.5 cents, bringing total dividends to 13 cents per share.
- Revenue climbs 6.9% to $1.33 billion
- Profit after tax up 19.2% to $91.9 million
- North American sales surge 33.8% past $100 million
- Gross margin improves to 22.4%, EBITDAFX up 9.9%
- Final dividend of 6.5 cents, total 13 cents per share
Record Revenue and Profit Growth Amid Challenging Conditions
Redox Limited (ASX:RDX) has delivered a standout financial performance for the year ended 30 June 2026, posting record revenue of $1.33 billion, up 6.9% on the prior year, and a 19.2% jump in profit after tax to $91.9 million. This growth was achieved despite a subdued global chemical distribution market and ongoing geopolitical tensions, notably in the Middle East, which have disrupted supply chains and increased costs.
Underlying earnings before interest, tax, depreciation, amortisation, and foreign exchange adjustments (EBITDAFX) rose 9.9% to $134 million, reflecting improved operational efficiency and a favourable product mix. Gross profit climbed 11.0% to $298 million, with the gross margin expanding 0.8 percentage points to 22.4%, slightly above the long-term historical average.
North American Expansion Accelerates
The North American business was a key driver of growth, with sales soaring 33.8% to exceed $100 million for the first time. This was underpinned by new customer wins, an expanded product portfolio, and deeper penetration across Industrial, Food, Human Health, and Personal Care segments. Redox's footprint now spans coast to coast in the US, with notable sales growth in California, Texas, Florida, and emerging success in Canada.
In the Asia Pacific region, Australian revenue grew 6.1% to $1.12 billion, buoyed by strong demand in Industrial, Crop Production & Protection, Food, and Animal Health & Nutrition sectors, alongside contributions from the Molekulis acquisition. New Zealand sales declined slightly by 4%, mainly due to softened demand in the Human Health segment.
Robust Balance Sheet and Cash Flow Position
Redox ended FY26 with a robust balance sheet, holding cash and cash equivalents of $123 million and maintaining zero net debt. The company generated operating cash flow of $88 million, up $40 million year-on-year, with free cash flow conversion improving to 62.5%, well within its historical range. Net working capital increased modestly to $417 million but remained within the company’s target range of 30% to 32% of revenue.
The strong cash position provides Redox with substantial capacity to invest in organic growth initiatives and pursue value-accretive acquisitions. The Board declared a fully franked final dividend of 6.5 cents per share, matching the prior year’s final dividend and bringing total dividends for FY26 to 13 cents per share, a 4% increase. This represents a payout ratio of 74%, comfortably within the company’s 60% to 80% dividend policy range.
Investing in Technology, Sustainability, and Talent
Redox continues to invest in its proprietary ERP/CRM platform, Redebiz, which supports its complex global operations and regulatory compliance. The integration of Molekulis onto Redebiz has been successfully completed, enhancing operational efficiency and product mix.
Sustainability remains a strategic priority, with Redox advancing decarbonisation efforts such as electrification of warehouse equipment, rooftop solar installations, and procurement of renewable energy. The company reports detailed greenhouse gas emissions data and participates in industry stewardship programs focused on waste reduction and circularity.
On the human capital front, Redox grew its workforce by 2.5% to 488 employees, emphasizing diversity, equity, and inclusion initiatives. The company was recognised as a Best Place to Work across Australia, New Zealand, and the US. Leadership changes are underway, with Chair Ian Campbell retiring and Non-Executive Director Mary Verschuer appointed as his successor, alongside the nomination of Sheila Lines as a new Non-Executive Director.
Remuneration Aligned with Performance
The remuneration report highlights increased fixed pay for key executives and incentive plans closely tied to underlying NPATFX growth. The FY24 Long-Term Incentive Plan (LTI) grants performed strongly, with total shareholder return ranking in the 82nd percentile relative to the ASX 300, triggering full vesting of performance rights. The FY27 LTI plan introduces an additional earnings per share hurdle to better align executive rewards with operational performance.
Non-Executive Director fees will increase in FY27 to reflect market benchmarks and governance demands, remaining within the approved remuneration pool.
Bottom Line?
Redox’s FY26 results showcase resilient growth and margin expansion, setting a solid platform for further North American expansion and strategic investments amid ongoing global uncertainties.
Questions in the middle?
- How will Redox balance continued organic growth with potential acquisition opportunities in a volatile global market?
- What impact will the new EPS hurdle in the FY27 LTI plan have on executive focus and shareholder alignment?
- Can Redox sustain margin improvements as supply chain pressures and geopolitical risks persist?