AVADA Group lifted revenue by nearly 15% in FY26, driven by Queensland and New South Wales expansion, while managing a $15 million impairment in Victoria that kept the statutory loss steady.
- 14.6% revenue increase to $209.8 million
- Adjusted EBITDA rose slightly to $13.1 million
- Non-cash $15 million impairment on Victorian operations
- Successful refinancing with Commonwealth Bank
- Ongoing business transformation and operational improvements
Revenue Growth Anchored in Queensland and New South Wales
AVADA Group Limited (ASX:AVD) posted a 14.6% increase in full-year revenue to $209.8 million for FY26, reflecting strong market penetration and contract wins in its two largest regions, Queensland and New South Wales. Queensland revenue rose 6.4% to $112.3 million, underpinned by a robust pipeline of infrastructure projects, including preparatory works for the Brisbane 2032 Olympic and Paralympic Games. New South Wales surged 86.7% year-on-year to $65.1 million, fueled by expansion into new regional markets and new customer acquisitions.
These gains offset ongoing challenges in Victoria and New Zealand, where difficult trading conditions and economic headwinds constrained performance. Victoria’s revenue declined amid mandated union labour on major government projects, intense price competition, and operational disruptions. New Zealand’s economic outlook remained weak, limiting government-funded projects and contributing to a loss before tax of $2.4 million, albeit improved from the prior year.
Statutory Loss Steady Despite $15 Million Victorian Impairment
The Group reported a statutory net loss after tax of $15.2 million, marginally better than FY25’s $15.6 million loss. This included a significant $15 million non-cash impairment charge related to the carrying value of Victorian intangible assets, reflecting a reassessment of future earnings potential in that market. The impairment comprised $9.4 million of goodwill and $5.6 million of customer intangibles.
Excluding one-off and non-cash items, AVADA’s adjusted EBITDA improved slightly to $13.1 million from $12.8 million in FY25, signalling underlying operational progress. Queensland and New South Wales delivered positive EBITDA contributions of $15.4 million and $7.1 million respectively, while Victoria and New Zealand segments remained loss-making.
Operational Costs Rise Amid Expansion and Market Pressures
Operating costs increased beyond revenue growth due to mobilisation expenses supporting new regional contracts, one-off business transformation costs, and fuel price escalations linked to geopolitical tensions in the Middle East. The Group absorbed much of the second-half fuel cost surge while engaging customers on potential recovery mechanisms. Investments in leadership capability, operational discipline, and fleet utilisation were key drivers of improved service delivery and financial resilience.
AVADA’s transformation initiatives have strengthened commercial governance and operational execution, including enhanced workforce planning and contract management. The executive leadership team expanded with new appointments in strategic execution, operations, and commercial management, further reinforcing accountability and decision-making.
Refinancing Strengthens Financial Flexibility
In April 2026, AVADA successfully refinanced and expanded its banking facilities with Commonwealth Bank of Australia, increasing covenant headroom and extending debt maturities. The Group’s total borrowings stood at $40.6 million with cash reserves of $6.5 million at year-end. Despite a material uncertainty related to going concern flagged by auditors, Directors remain confident in the Group’s ability to meet obligations and continue operations, supported by cash flow forecasts, refinancing, and operational improvements.
Safety and Sustainability Initiatives Continue to Advance
Safety remains central to AVADA’s operations, with FY26 recording a 53% reduction in recordable injuries and a Total Recordable Injury Frequency Rate (TRIFR) halving to 2.53. The Group’s ESG framework integrates environmental monitoring, Indigenous employment pathways, and psychosocial risk management, reflecting a commitment to sustainable and responsible business practices.
Looking ahead, AVADA aims to leverage its market leadership and operational improvements to capitalise on infrastructure investment pipelines, particularly in Queensland ahead of the 2032 Olympics. The Group’s focus will remain on enhancing operational and commercial discipline to drive profitable growth amid ongoing market challenges.
Bottom Line?
AVADA’s FY26 results reveal a company navigating market headwinds with strategic transformation and regional growth, but the Victorian impairment and going concern uncertainty underscore risks ahead.
Questions in the middle?
- Will AVADA’s Victorian turnaround initiatives restore profitability in FY27?
- How will ongoing fuel cost volatility impact contract margins and pricing negotiations?
- Can the Group maintain momentum in New South Wales and Queensland to offset weaker markets?