Big River Industries delivered a stronger FY26 despite subdued residential construction, lifting underlying EBITDA 8.4% and reducing gearing after its Johns Building Supplies acquisition. The company is targeting double-digit underlying EBITDA growth in FY27, while its strategic options review remains unresolved.
- Revenue rose 5.3% to $426.4 million
- Underlying EBITDA increased 8.4% to $31.1 million
- Johns Building Supplies contributed $25.2 million of revenue
- Net debt fell to $24.8 million and gearing to 17.9%
- FY27 double-digit underlying EBITDA growth target reiterated
Margins and earnings recover in difficult construction market
Big River Industries Limited (ASX:BRI) has put a difficult residential construction market behind a materially better FY26, reporting higher revenue, wider margins, stronger cash generation and a return to statutory profit. Group revenue rose 5.3% to $426.4 million, while underlying EBITDA increased 8.4% to $31.1 million and underlying NPAT climbed 20.5% to $5.2 million.
The statutory result was also sharply improved, with NPAT of $4.9 million compared with a $14.8 million loss in FY25. That comparison is influenced by the prior year’s $20.0 million non-cash goodwill impairment, but the underlying operating result still moved higher: gross margin expanded by 30 basis points to 26.5% and EBITDA margin reached 7.3%.
Construction leads as Panels absorbs softer demand
The Construction division did most of the heavy lifting. Revenue increased 7.1% to $295.0 million and segment EBITDA rose 19.4% to $27.7 million, supported by resilient commercial construction and formwork activity, particularly in Western Australia and New South Wales. The Panels division grew revenue only marginally to $131.4 million, while EBITDA fell to $12.3 million from $13.5 million as weaker New Zealand and recreational-vehicle markets offset growth in bespoke decorative panels, cladding and other higher-value categories.
Management said pricing discipline, product mix, procurement, supplier alignment and operating efficiencies helped counter softer volumes. About 20% of group revenue now comes from Big River-manufactured products, giving the company a combination of manufacturing capability and national distribution that it says can support growth without relying solely on a broad construction recovery.
JBS adds scale while balance sheet strengthens
The December 2025 acquisition of Johns Building Supplies added $25.2 million of revenue and $3.1 million of EBITDA over 6.5 months. Big River paid up to $17.1 million for the Perth business, using cash, $2.0 million of shares and contingent consideration linked to defined EBITDA thresholds. The full-year contribution from JBS is now one of the main supports for the FY27 earnings target.
Despite the acquisition and continued investment, net debt fell to $24.8 million from $25.5 million and gearing declined to 17.9% from 20.1%. Operating cash flow before interest and tax was $31.7 million, equivalent to 101.5% cash conversion, while net working capital improved to 15.9% of revenue from 17.7%. A circa $10 million renounceable entitlement offer generated $9.8 million of net proceeds and provided additional balance-sheet flexibility. The board declared a fully franked final dividend of 2.0 cents per share, taking FY26 dividends to 4.0 cents per share.
FY27 target meets strategic review uncertainty
Big River has reiterated its expectation for double-digit underlying EBITDA growth in FY27, subject to market conditions and execution. Its stated drivers include a full-year JBS contribution, greater penetration in cladding, plywood and differentiated panels, improved manufacturing utilisation, procurement gains and additional operating leverage through the existing network.
That forecast sits alongside two unresolved issues. Residential construction is expected to remain variable, and the company’s strategic options review, being supported by Greenstone Partners, is still under way with no certainty of a transaction or other specific outcome. The annual report also records $56.2 million of goodwill and other intangible assets. No impairment was recognised in FY26, but the Panels cash-generating unit had only $9.6 million of headroom and could be vulnerable to reasonably possible changes in its discount rate or growth assumptions. The next test is therefore not simply whether Big River can post growth, but whether JBS and the targeted product categories can deliver enough of it to make the FY27 promise comfortably repeatable.
Bottom Line?
The FY27 target now depends on converting JBS’s partial-year contribution and higher-value product initiatives into sustained earnings growth, while the strategic review and Panels impairment sensitivity remain open variables.
Questions in the middle?
- Can the full-year JBS contribution lift FY27 earnings without eroding the improved margin profile?
- Will growth in cladding, plywood and differentiated panels offset continued weakness in residential construction and recreational vehicles?
- What outcome, if any, will emerge from the ongoing strategic options review?