Simonds Group delivered a record net profit after tax of $10.5 million for FY26, driven by a 9.5% revenue rise to $729.1 million and strategic expansion including a Western Australia joint venture.
- Net profit after tax surged 950% to $10.5 million
- Revenue grew 9.5% to $729.1 million
- EBITDA rose 77% to $42.5 million with margin expansion
- Western Australia joint venture launched with Atlas
- Dennis Family Homes acquisition fully integrated
Record Profit Reflects Strategic Execution
Simonds Group Limited (ASX:SIO) has reported a striking 950% jump in net profit after tax (NPAT) to $10.5 million for the year ended 30 June 2026, marking its highest profit since listing. This leap came alongside a 9.5% revenue increase to $729.1 million, underpinned by a 16.1% rise in site starts and the full-year contribution from its acquisition of Dennis Family Homes (DFH).
The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) surged 76.8% to $42.5 million, lifting the EBITDA margin to 5.8% from 3.6% in FY25. This margin expansion was driven by disciplined pricing, procurement efficiencies, and productivity gains, illustrating the successful execution of Simonds’ multi-channel growth strategy.
Diversified Channels and Geographic Expansion
Simonds’ multi-channel approach matured in FY26, broadening its market exposure across retail, wholesale, developer partnerships, and medium-density projects. This diversification helped the Group navigate affordability pressures, interest rate challenges, and shifting buyer preferences. CEO and Executive Chair Rhett Simonds highlighted the strategy’s role in delivering volume and earnings resilience.
Geographically, the Group made a strategic push into Western Australia through a 50/50 joint venture with Atlas Building. While the joint venture recorded a start-up loss of $0.3 million on a proportional basis, this investment lays the groundwork for future growth in a new market. This expansion complements the integration of DFH, which enhanced Simonds’ product range, regional footprint, and operational scale.
Cash Flow and Balance Sheet Highlights
Despite strong earnings, net operating cash flows declined by $14.1 million to $25.3 million, reflecting increased working capital tied up in higher inventory and site start activity. Cash on hand stood at $16.5 million, supplemented by $22.6 million in undrawn banking facilities, maintaining a healthy liquidity position of $39.1 million.
Net tangible asset backing per share improved to 3.89 cents, and net assets backing per share rose to 8.40 cents, signaling a stronger balance sheet. The Group’s investment in display networks and alternative sales channels contributed to the cash reduction but is expected to generate long-term value.
Goodwill and Contingent Consideration Adjustments
Following the DFH acquisition completed in FY25, Simonds adjusted goodwill down by $1.639 million to $10.705 million, reflecting refined expectations and synergies realized. The contingent consideration linked to DFH’s operational performance hurdles was settled by $7.05 million during FY26, leaving a balance of $2.48 million.
Governance and Outlook
Amid these results, the Board has established an independent directors’ committee to oversee inquiries related to proposed shareholder resolutions requesting forensic accounting investigations. Simonds reaffirmed its commitment to strong governance as it navigates these developments.
Looking ahead, the Group expects ongoing market influences from interest rates, borrowing capacity, land availability, and consumer confidence. Management plans to focus on growing medium-density and alternative channels, enhancing affordability-focused product offerings, and integrating its Western Australia operations. Investments in data, automation, and AI-enabled capabilities aim to bolster customer experience and operational efficiency.
The Board is considering a dividend for FY26, with details pending audit completion. Investors will be watching how Simonds balances growth investments with shareholder returns in FY27.
Bottom Line?
Simonds’ FY26 results showcase operational discipline and strategic expansion, but sustaining growth amid market headwinds and governance inquiries will test its resilience.
Questions in the middle?
- How will Simonds’ Western Australia joint venture evolve beyond its initial investment phase?
- What impact will the ongoing governance inquiries have on investor confidence and management focus?
- To what extent will the Group’s investments in AI and automation translate into improved margins and customer retention?