Saferoads Doubles Revenue and Returns to Profit in FY2026

Revenue Doubles as Profit Returns Post-Divestment

Saferoads Holdings Limited (ASX:SRH) has delivered a marked financial turnaround for the year ended 30 June 2026, with revenue from continuing operations soaring 110% to $12.47 million. This surge followed the strategic divestment of its Road Safety Rental (RSR) business in May 2025, which had previously contributed significant discontinued operation profits. The company reported a net profit of $711,389 from continuing operations compared to a loss of $923,415 in the prior year, reflecting the successful execution of its post-divestment strategy.

Strong Sales to On-Site Rental Group Drive Growth

A key driver of the improved performance was product sales to On-Site Rental Group, which accounted for $5.7 million in revenue during the year, substantially exceeding the initial $3 million commitment. This relationship is poised to remain important, although no formal future commitments have been made. The sales boost, combined with disciplined cost management and operational improvements, helped lift earnings before interest and tax (EBIT) from a loss of $830,748 to a positive $805,260.

Dividend Policy Reflects Confidence Amid Modest NTA Decline

Reflecting its return to profitability, Saferoads declared a fully franked final dividend of 0.5 cents per share, matching the interim dividend paid earlier in the year. This is a significant reduction from the 10 cents per share dividend paid in 2025, which included proceeds from the RSR sale. Net tangible asset backing per share slightly declined to 10.3 cents from 10.8 cents, influenced by the divestment and asset reallocation.

Balance Sheet and Cash Flow Position

The Group ended the year with net assets of $5.26 million and cash holdings of $2.52 million, down from $3.5 million the previous year, reflecting ongoing investments and dividend payments. Operating cash flow remained positive at $428,665 despite the challenging transition. The company also completed a small buy-back of unmarketable parcels, reducing shares on issue to 43.35 million.

Related Party Transactions and Strategic Acquisitions

During the year, Saferoads acquired assets from Chameleon AMLS for $400,000 plus deferred consideration of $100,000 in shares, coinciding with the appointment of Andrew Kaye, Chameleon's founder, to the board. The acquisition aims to expand Saferoads’ product range in modular trailers. Related party transactions included equipment purchases and property rentals at commercial rates, with full disclosure provided. The company continues to manage lease liabilities prudently, including a lease extension for its Pakenham facility.

Audit Status and Forward Momentum

The financial statements are currently unaudited but the company anticipates an unmodified audit opinion upon completion. Saferoads maintains a cautious but optimistic outlook, with ongoing sales to On-Site Rental Group and new product lines supporting growth prospects. Investors will be watching how the company balances dividend payouts with reinvestment and how it leverages its expanded product portfolio.