Coventry Group (CYG) H1 2025 earnings summary

Executive summary

• H1 FY25 sales were $185.2m, nearly flat year-over-year, with underlying EBITDA up 0.8% to $9.9m and underlying EBIT steady at $7.8m.

• Statutory net loss was $0.7m, compared to a $0.4m loss in H1 FY24, mainly due to $5.2m in ERP project costs.

• Microsoft D365 ERP system upgrade completed on schedule and budget, with no further material costs expected in 2025 and full benefits anticipated.

• Focus is now on accelerating organic sales growth, strengthening the balance sheet, and leveraging recent investments in large, fragmented markets.

• No interim dividend declared for H1 FY25; future payments depend on business capacity.

Financial highlights

• Group sales for H1 FY25 were $185.2m, flat year-over-year; revenue from sale of goods was $184.7m.

• Underlying EBITDA (pre-AASB 16, pre-significant items) grew 0.8% to $9.9m; EBIT at $7.8m, flat year-over-year.

• Statutory net loss of $0.7m, impacted by one-off ERP implementation costs.

• Net assets at 31 Dec 2024 were $140.8m; net tangible assets $32.0m.

• Net debt at period end was $52.9m, higher than planned due to delayed customer payments and ERP costs.

Outlook and guidance

• Expectation of improved net profit in H2 as ERP costs subside and delayed payments are collected.

• Early 2025 sales growth of +6.0% in the first six weeks, with daily sales at highest levels in over six months.

• Anticipate market conditions in Australia and New Zealand to improve in 2025, aided by interest rate cuts.

• Focus on organic growth, new store openings, and margin improvement initiatives.

• No further material ERP costs expected; business expected to become more cash generative.