PWR Holdings has lifted its FY27 Aerospace and Defence revenue growth outlook to around 50% after delivering record FY26 revenue of $170.7 million. A new US$4.6 million pre-contract order and a planned Polish manufacturing site are adding momentum, although the larger defence opportunity remains subject to customer and program decisions.
- FY27 Aerospace and Defence growth outlook raised from around 30% to around 50%
- US$4.6 million pre-contract order secured for a pipeline opportunity
- FY26 revenue rose 31% to $170.7 million and NPAT climbed 83% to $17.9 million
- Krosno, Poland site secured on a 10-year lease with initial operations due in FY27
- FY27 statutory NPAT margin expected to improve to 12.5%
Defence growth outlook raised to 50%
PWR Holdings Limited (ASX:PWH) has upgraded its FY27 Aerospace and Defence revenue growth outlook to around 50%, from the previous expectation of roughly 30%, after securing a US$4.6 million order for pre-contract activities tied to one of its disclosed pipeline opportunities.
The order is meaningful, but it is not yet a program award. PWR said the work represents an important step towards converting the opportunity, while stressing that it has not been formally selected as the supplier for the ongoing program. Timing of individual orders will also depend on customer delivery schedules.
Record FY26 result provides a stronger base
The revised outlook follows a sharp FY26 improvement. Revenue increased 31% to a record $170.7 million, EBITDA rose 60% to $40.7 million and statutory net profit after tax jumped 83% to $17.9 million. The NPAT margin expanded by three percentage points to 10.5%, despite the costs of PWR's new Stapylton facility, higher research and development spending and additional capacity investment.
Motorsports remained the largest contributor, with revenue up 45% to $101.9 million as Formula 1 regulation changes increased cooling content per car. Aerospace and Defence revenue grew 31% to $35.2 million, while its order book stood at around $40 million at the start of FY27 and its FY26 book-to-bill ratio reached 144%. That momentum builds on the earlier US$9.1m follow-on contract, which PWR said was subsequently increased to US$11.9 million.
Poland adds capacity but carries start-up costs
PWR has signed a 10-year lease, with two five-year options, for a new site in Krosno, southeastern Poland. Initial operations remain on track to begin in FY27, with the company planning $3.8 million of capital expenditure in FY27 and $16.1 million over four years, within its existing capital expenditure plans.
The site is intended to support European Aerospace and Defence customers, bring more component manufacturing in-house and provide access to specialised manufacturing talent. PWR expects to employ about 15 people initially, with a target of roughly 60 by FY30. Start-up and investment costs are expected to reduce FY27 NPAT by less than $1 million.
Margin recovery now depends on execution
Management expects group revenue growth in FY27 to be driven largely by Aerospace and Defence, while Motorsports holds its higher FY26 baseline and OEM revenue grows by around 20%, subject to customer production timing. Automotive Aftermarket revenue is expected to record modest growth as PWR continues shifting its catalogue towards higher-volume, higher-value products.
At group level, PWR expects statutory NPAT margin to improve to 12.5% in FY27. It says any outperformance above that level will be reinvested in mobilising resources for potential pipeline conversions. Over FY28 to FY30, the company continues to expect the margin to trend towards its FY24 reference level of 17.8%, although the intermediate recovery path is indicative rather than formal guidance.
Shareholders back leadership and incentive resolutions
The AGM proxy results showed strong support across the board. Sharyn Williams's leadership followed the Sharyn Williams CEO appointment, while Matthew Bryson and Susan Forrester were backed for election with 99.68% and 99.82% of votes cast in favour, respectively. The remuneration report and all five performance rights resolutions also received at least 99.68% support among votes recorded.
The immediate test is whether the upgraded defence outlook converts into recurring production revenue rather than remaining concentrated in a small number of customer programs. PWR enters that test with a lower net debt balance of $5.6 million, a new European base under construction and a business still carrying the cost of expanding ahead of demand.
Bottom Line?
PWR has raised the growth ambition for its most promising division, but the investment case now turns on converting pre-contract work and order-book strength into repeatable defence revenue while restoring margins.
Questions in the middle?
- Will the US$4.6 million pre-contract order lead to formal selection for the related long-term program?
- Can the Krosno site begin operations in FY27 without materially delaying PWR's margin recovery?
- How much of the $40 million Aerospace and Defence order book will convert to recognised revenue in the first half?