Eneco Refresh has delivered its strongest profit in five years despite raw material inflation and logistics disruption, with operating cash flow and cash reserves also improving. The company now has scope to invest in automation and consider selective acquisitions, but offers no FY2027 earnings guidance or dividend.
- Revenue up 6.8% to $17.73 million
- Profit after tax rises to $451,001
- Operating cash flow reaches $1.71 million
- Cash climbs to $5.02 million with no borrowings
- Refresh Plastics revenue up 19% and profit up 59%
Eneco Refresh Limited (ASX:ERG) has turned a year of raw material inflation, rising freight costs and unpredictable demand into its strongest profit result in five years. Revenue rose 6.8% to $17.73 million for FY2026, while profit after tax jumped to $451,001 from $24,656 a year earlier.
The improvement was not merely an accounting rebound. EBITDA increased to $1.51 million from $1.12 million, and operating cash flow reached $1.71 million, up from $1.39 million. Cash at year-end stood at $5.02 million, while the group reported no borrowings, although it carried $3.54 million in lease liabilities.
Water and plastics divisions both improve
Refresh Waters remained the core business, generating $14.78 million in revenue and $931,000 in segment profit, up 5% and 60% respectively. Western Australia was the standout region, with profit rising 65% to $502,000, while the company said its Victorian Refresh Waters operation returned to overall profitability after previously being a significant loss-maker.
Refresh Plastics supplied the sharper growth profile. Revenue climbed 19% to $2.95 million and segment profit rose 59% to $213,000, despite raw material prices increasing by as much as 50% in March, according to the company. The result marks a meaningful recovery for a division that had endured several years of losses and a factory fire in FY2024.
The figures should be read with some care. Eneco changed the way custom-label water revenue is allocated between states, assigning sales to the location where products are made rather than centralising them through Sydney. That change contributed to the reported 4% revenue decline in New South Wales, making some regional comparisons less clean than the headline group result.
Balance sheet creates room for investment
Management says the stronger balance sheet provides capacity to invest in automation, improve operating margins and pursue potential acquisitions or operational synergies. The group invested $465,691 in property, plant and equipment during the year and repaid $774,600 of lease principal, while net assets rose to $8.87 million from $8.43 million.
There are still several points of tension beneath the recovery. Northern Territory demand fell by almost half in the second half as a customer downsized, although the operation contributes less than 0.3% of group revenue. Queensland revenue grew 4%, but profit fell 28% amid customer margin pressure and other adjustments. One supermarket chain accounted for more than 20% of sales, leaving the group exposed to customer concentration.
Eneco declared no dividend for FY2026 and retains accumulated losses of $10.04 million. It also has $1.24 million of unrecognised deferred tax assets linked mainly to carried-forward losses. The next test is whether automation and tighter cost control can preserve the earnings improvement once the unusually favourable comparison with FY2025 begins to fade, particularly if raw material and logistics costs remain elevated.
Bottom Line?
The turnaround has produced cash, profit and a cleaner balance sheet; FY2027 will show whether those gains are durable enough to fund expansion without sacrificing margins.
Questions in the middle?
- Can Eneco sustain FY2026’s margin improvement if raw material and freight costs remain volatile?
- Will automation investment translate into further profit growth across Queensland and Victoria?
- How much capital, if any, will be directed towards acquisitions before the company considers returning cash to shareholders?