Big River Industries (ASX:BRI) reversed a $14.8 million loss in FY25 to a $4.9 million profit in FY26, driven by margin expansion and the acquisition of Johns Building Supplies. The group targets double-digit EBITDA growth in FY27 amid mixed market conditions.
- Revenue up 5.3% to $426.4 million
- Statutory profit after tax $4.9 million vs loss in prior year
- EBITDA increased 8.4% to $31.1 million with margin expansion
- Johns Building Supplies acquisition contributed $25.2 million revenue
- Fully franked final dividend of 2 cents per share declared
Profit Turnaround Amid Challenging Market
Big River Industries Limited (ASX:BRI) has delivered a striking turnaround in FY26, reporting a statutory net profit after tax of $4.9 million, a 133% improvement from a $14.8 million loss the previous year. This recovery was underpinned by a 5.3% lift in revenue to $426.4 million and an 8.4% rise in underlying EBITDA to $31.1 million, with margins expanding despite ongoing softness in residential construction markets.
The company’s CEO John Lorente highlighted disciplined execution as key, citing pricing discipline, product mix optimisation, and supplier alignment as drivers of a 30 basis point gross margin expansion to 26.5%. The underlying NPAT of $5.2 million also rose 20.5% year-on-year, reflecting operating leverage as the business navigated subdued market conditions.
Strategic Acquisition Boosts Western Australia Presence
December 2025 saw Big River complete its acquisition of Johns Building Supplies (JBS), a Perth-based building materials distributor, for a maximum consideration of $17.1 million. The acquisition contributed $25.2 million in revenue and $3.1 million in EBITDA over 6.5 months, outperforming expectations and materially strengthening Big River’s footprint in Western Australia.
The deal was partly funded through a $10 million entitlement offer completed in December 2025, which was oversubscribed, reflecting strong shareholder support. The acquisition integrates seamlessly into Big River’s Construction division, which posted a 7.1% revenue increase to $295 million and a 19.4% EBITDA uplift to $27.7 million, driven by JBS and organic growth in key markets like Western Australia and New South Wales.
Panels Division Faces Margin Pressure but Invests in Growth
The Panels division delivered a more modest 1.3% revenue increase to $131.4 million, buoyed by bespoke and value-added product growth. However, EBITDA declined 8.9% to $12.3 million, reflecting competitive pricing pressures, product mix challenges, and investments in targeted growth initiatives. Softer conditions in New Zealand and the recreational vehicle market weighed on performance.
Robust Balance Sheet and Cash Flow Support Growth Ambitions
Big River maintained a strong balance sheet, with gearing reduced to 17.9% from 20.1% and net working capital to revenue ratio improved to 15.9% from 17.7%. Operating cash flow before interest and tax rose to $31.7 million, achieving a cash conversion ratio of 101.5%, up from 100.1% in FY25. This cash generation supported capital expenditure, acquisition funding, and dividend payments.
The Board declared a fully franked final dividend of 2 cents per share, bringing total dividends for FY26 to 4 cents per share, maintaining a payout ratio near 77%. The company reiterated its expectation for double-digit EBITDA growth in FY27, driven by the full-year contribution from JBS, continued expansion in higher-value product categories, operational efficiencies, and increased manufacturing utilisation.
Risks and Strategic Review Underway
Big River’s Directors flagged key risks including economic volatility, workplace health and safety, key personnel retention, IT and cyber security threats, and climate-related operational impacts. The company has implemented comprehensive risk management frameworks across these areas.
In June 2026, Big River engaged Greenstone Partners to conduct a strategic review of the Group’s valuation, capital structure, and growth opportunities. While no specific outcomes are assured, the review underscores management’s focus on unlocking shareholder value amid variable market conditions.
Outlook Hinges on Market and Execution
Looking ahead, Big River anticipates subdued residential market growth but expects commercial, infrastructure, and formwork activity to remain resilient. Western Australia and South Australia are forecast to outperform softer eastern seaboard markets, with Queensland poised for growth linked to the Brisbane 2032 Olympics preparations.
The Group’s FY27 growth strategy centers on leveraging its national platform for operating leverage, investing in specialist sales and category management, and driving gross profit improvements through pricing and procurement initiatives. The company also remains open to further value-accretive acquisitions to complement organic growth.
Bottom Line?
Big River’s FY26 rebound sets a foundation for growth, but execution amid mixed market signals and ongoing strategic review will be critical to sustaining momentum.
Questions in the middle?
- How will Big River navigate continued softness in residential construction while pursuing growth?
- What strategic options might emerge from the ongoing Board review with Greenstone Partners?
- Can the Panels division reverse margin pressures while investing in higher-value categories?