EBITDA up 14.9% on cost cuts as revenue declined 1.3%

Management attributes the gap to a 4% reduction in operating expenses on a normalised basis, alongside continued growth in OneRoof digital listings revenue (+18%).

Reported NPAT swung from a $16.0m loss to a $13.1m profit (+181.6%), and PBT swung from -$12.5m to $18.6m (+249.1%). Most of that swing reflects the absence of the FY24 intangible asset impairment that depressed the prior operating result, rather than a 30-point lift in underlying earnings power.

Cash generation strengthened materially: operating cash flow rose 33.0% to $50.4m and free cash flow more than doubled to $25.4m. Net debt fell from $24.1m to $15.5m, taking leverage to 0.25x EBITDA from 0.45x.

EBITDA expanded $8.1m while revenue contracted by $4.6m, which means the entire EBITDA improvement and more came from cost reduction. That is a clean operating read this year, but it raises the question of how many further cost levers remain before revenue trajectory matters again.

Audio profit fell despite revenue growth. Audio revenue rose to $122.2m from $116.6m, but segment result declined to $18.1m from $21.9m. Disclosed segment margin moved to 15% from 11% on the new basis, so the absolute decline reflects a different cost allocation rather than a clean deterioration — but the headline still flags that the dominant 35.4% revenue segment did not contribute to group profit growth this year.

Cash conversion and leverage moved in the right direction. OCF/EBITDA improved to 80.8% from 69.9% and FCF/NPAT reached 194.1%, supported by a $6.3m release of operating working capital (receivable days down 2.6 to 35.6; inventory days down 3.7 to 1.7). Combined with $4.4m of borrowings reduction, this materially de-risks the balance sheet from a capacity perspective.

Management's outlook commentary emphasises continued OneRoof digital growth, ongoing cost focus, and balance-sheet capacity for shareholder returns.

The half-year shape is informative: HY25 contributed only 38.4% of full-year EBITDA and HY25 NPAT was -$0.4m, which means the H2 implied EBITDA was $38.4m and implied NPAT $13.5m. The result is heavily second-half weighted, so anchoring next year's expectations to an annualised H2 run-rate would be more aggressive than annualising the full-year number.

The NPAT recovery is dominated by the absence of FY24's intangible impairment, which is a one-time accounting reset rather than an underlying earnings step-change — PBT growth of 249.1% should be read in that light. The cleaner operating reads are the 14.9% EBITDA lift and the move in operating profit from -$5.1m to $25.3m.

Cash quality strengthened on two fronts: lower capex (down 15.7% to $10.7m, or 3.1% of revenue) and a $6.3m working-capital release. The working-capital benefit is non-repeating in nature — receivable and inventory days cannot keep falling indefinitely — so the FY26 starting point for cash conversion is likely lower than the 80.8% printed this year. Free cash flow comfortably covered the 9.0c full-year dividend (FCF payout ratio 66.6% versus 148.7% in FY24), so distribution capacity has genuinely improved even after stripping the working-capital tailwind.

This briefing cannot assess the durability of OneRoof's digital listings growth or the competitive dynamics underlying the Audio segment result decline without further segment commentary.