Mustera Property Group posted a $2.08 million net loss for FY26, weighed down by project costs and inventory write-downs, while making significant progress on its Verse on McCabe development backed by a $74.6 million construction loan.
- FY26 revenue of $13.17 million with $2.08 million net loss
- Inventory write-down of $1.49 million impacts results
- Verse on McCabe construction underway with $74.6 million financing secured
- Divestment of Midland land reduces debt
- Working capital deficit persists amid ongoing development spend
Losses Reflect Project Investment and Market Pressures
Mustera Property Group Ltd (ASX:MPX) reported a net loss after tax of $2.08 million for the year ended 30 June 2026, a modest improvement on the $2.6 million loss recorded in FY25. The result was driven by elevated project-related expenses and a $1.49 million write-down of property inventory to net realisable value, reflecting cautious market conditions and revised sales expectations.
The Group’s revenue rose slightly to $13.17 million, largely from sales of residual inventory at the Forbes Residences project in Applecross and the settlement of Lot 801 Helena Street in Midland. However, these gains were offset by significant marketing and selling costs, including $1.57 million for the Verse on McCabe project and $356,000 for Forbes Residences.
Verse on McCabe Project Progresses with Major Financing Milestone
Mustera has advanced its key North Fremantle development, Verse on McCabe, with construction commencing in April 2026. The project, approved for 42 apartments over eight levels, had secured $44.1 million in cumulative presales at year-end. Subsequent to 30 June, the Group closed a $74.6 million construction finance facility with PAG, marking a critical funding milestone. The first drawdown was made in August 2026, enabling ongoing construction aligned with the planned development timeline.
This progress follows a period of design finalisation, marketing preparation, and contractor procurement, with Thomas Building appointed as head contractor in March 2026. The site demolition and piling works were underway as at the reporting date.
Asset Sales and Working Capital Position
During the year, Mustera divested a non-core vacant land asset at Grace Quarter, Lot 801 Helena Street, Midland, for $1.375 million, applying proceeds to reduce debt facilities. Despite this, the Group reported a net working capital deficiency of $13.2 million at 30 June 2026, influenced by the timing of project expenditure and sales receipts. However, the Group expects proceeds from the remaining commercial unit at Forbes Residences and ongoing financing arrangements to support liquidity.
The East Perth property continues to generate rental income under a short-term commercial lease, covering associated loan interest costs. The Group is actively assessing development options for this strategically located site near Perth’s CBD and Optus Stadium.
Financial Position and Risk Management
Total assets stood at $39.9 million, down from $44.2 million in FY25, with net assets of $16.1 million. Borrowings remained steady at $18.4 million, with the Group compliant with loan covenants including an interest coverage ratio above 1.75 times and a loan-to-value ratio below 55%. Notably, the Group repaid a $1 million Harvis finance loan in July 2026.
Mustera continues to manage risks across project development, finance facilities, and personnel retention, with a focus on disciplined capital management. The Board remains confident in refinancing capabilities supported by the Group’s asset portfolio and ongoing project progress.
Remuneration and Governance Highlights
The Remuneration Report disclosed stable executive and non-executive director fees, with no new performance rights granted during the year. A total of 600,000 vested performance rights were converted into shares, while 2.6 million lapsed unexercised. The auditor, BDO Audit Pty Ltd, issued an unqualified opinion, highlighting inventory valuation and investment property fair value as key audit matters.
Substantial shareholders include Wonder Holdings Pty Ltd and Anrinza Future Pty Ltd, holding approximately 29.3% and 28.1% respectively. The Group declared no dividends for FY26, consistent with prior years.
What Lies Ahead for Mustera
Mustera’s immediate priorities are clear: advance construction and sales at Verse on McCabe, complete the sale of the remaining Forbes Residences commercial unit, and progress development strategy for the East Perth site. The Group’s ability to refinance debt facilities as they mature will be critical to sustaining operations and capitalising on development opportunities.
Investors will be watching how market conditions evolve in Western Australia’s property sector, particularly the impact on net realisable values and sales velocity. The Group’s next updates on construction milestones and presale achievements will provide important signals on its path to profitability.
Bottom Line?
Mustera’s FY26 loss underscores the challenges of property development cycles, but securing major construction finance for Verse on McCabe marks a pivotal step forward.
Questions in the middle?
- How will market conditions affect the net realisable value of Mustera’s remaining inventory?
- Can Mustera maintain refinancing success to support its development pipeline beyond FY27?
- What sales momentum can be expected from Verse on McCabe as construction progresses?