Supply Network Posts 15% Revenue Growth and Raises Final Dividend to 44 Cents

Financial Performance Surges on Broad-Based Growth

Supply Network Limited (ASX:SNL) delivered a robust FY2026 result, with revenue climbing 15.4% to $403.7 million and net profit after tax jumping 19% to $47.6 million. Earnings per share rose to 109 cents, up from 92.9 cents the prior year, reflecting steady margin improvement and operational leverage. The company declared a fully franked final dividend of 44 cents per share, payable 2 October 2026, lifting total dividends for the year to 80 cents, a 10-cent increase over FY2025.

The growth was broadly based, with Australian sales up 17.2% in local currency and New Zealand sales rising 12.2% in NZ dollars. Supply Network’s profit after tax margin nudged up to 11.8%, supported by disciplined cost management and a 15.5% increase in group sales revenue. Operating cash flow strengthened to $38.4 million, underpinning a net cash position of $17.9 million and net assets of $160.5 million.

Strategic Investments in Network and Systems Drive Momentum

The company’s operational highlights centred on significant branch network expansions and a major IT systems overhaul. In New Zealand, a new branch in North Auckland opened ahead of expectations, while racking capacity at the Hamilton distribution centre was expanded to support growth. Closer integration of Australian and New Zealand operations was also advanced, aiming to exploit scale efficiencies.

In Australia, Supply Network completed phased IT upgrades, including a new browser-based sales interface, enhanced warehouse scanning apps, and a new ERP backbone. Despite the usual challenges of system transitions, these upgrades are delivering immediate benefits in process efficiency and customer service quality. The full integration of the Pemulwuy (Sydney) and Truganina (Melbourne) distribution centres further rationalised the network to support scalable growth.

Looking ahead, the company is executing several branch expansions to capture growth corridors: a tripling of the Eagle Farm branch footprint in Brisbane, doubling Canberra’s branch size, relocating Toowoomba and Kwinana branches to larger, better-located sites, and a new branch development in Penrith targeting FY2028. These projects aim to improve service levels and increase stock holdings in high-growth regions.

Market Dynamics and Growth Outlook

Supply Network operates in the aftermarket parts sector for trucks and buses, an industry estimated to grow at about 7% annually. The company benefits from a shift away from original equipment manufacturers towards independent suppliers offering quality parts at competitive prices with tailored services. To validate its growth strategy, Supply Network has begun collaborations with global leaders in service innovation, reinforcing its positive long-term outlook.

For FY2027, the company targets approximately $50 million in revenue growth, a challenging but achievable goal given its modern, scalable systems and ongoing sales momentum. The recent elevation of the General Manager, Australia to Group General Manager reflects a strategic move to better coordinate operations across Australia and New Zealand.

Executive Remuneration and Governance

The report details a remuneration framework designed to align executive incentives with company performance and shareholder returns. Managing Director Geoffrey Stewart received a short-term incentive of 40% of fixed compensation, reflecting strong financial and operational results, while CFO Robert Coleman earned 22.7%. Both executives participate in a long-term equity incentive plan with performance-based vesting conditions.

The board maintains a strong governance posture, with recent director changes including the resignation of Peter Gill and appointment of Karen Phin as Audit and Risk Committee Chair. The company’s auditor, BDO Audit Pty Ltd, issued an unqualified opinion, highlighting robust controls over inventory valuation, a key audit matter given the materiality of inventory on the balance sheet.

Safety and Culture as Growth Enablers

Safety remains a core value, with initiatives targeting hazardous manual tasks and traffic management risks. Investments in safer warehouse storage and mental health toolkits underscore a holistic approach to employee wellbeing. The company emphasises a culture of local empowerment balanced by strong ethics, positioning it well to compete in diverse and demanding markets.

Supply Network’s ongoing investments in network capacity, IT systems, and people underpin its ambition to capture market share and sustain growth amid competitive pressures. Execution on branch expansions and integration efforts will be key to watch as the company pursues its $50 million revenue growth target in FY2027.