Veem (VEE) H2 2025 earnings summary

Executive summary

• FY 2025 saw revenue of $68.6 million, EBITDA of $9.2 million, and net profit after tax of $3 million, with a strong second half driven by new contracts and a catch-up on backlogs, especially in propellers and defense.

• Full-year revenue declined 15% year-over-year, EBITDA was down 38%, and NPAT fell 57%, but 2HFY25 saw sequential improvements in all metrics.

• Major defense contracts, including ASC, HII, and Hunter Class, are expected to drive significant growth from late FY 2026 and into FY 2027.

• Defence revenue accelerated in 2HFY25, offsetting a reduction in ASC revenue, with a renewed six-year, $65 million ASC contract signed.

• Cash flow from operations was $4.3 million, down 49% year-over-year, but up 39% in 2HFY25 versus 1HFY25.

Financial highlights

• Revenue for FY 2025 was $68.6 million, EBITDA $9.2 million, net profit after tax $3 million, and operating cash flow $4.3 million.

• Revenue decreased 15% year-over-year, while EBITDA margin was 13.4% for FY25, with a 2HFY25 margin of 15.0%.

• Net profit after tax doubled in the second half compared to the first half.

• Cash on hand at year-end was $0.8 million, with $3 million in undrawn facilities.

• EPS was 2.22c (down 57% year-over-year); dividend was 0.23c.

Outlook and guidance

• ASC contract work is expected to resume in 2026, heavily weighted to the second half, with a six-year, $65 million extension signed.

• Defence revenue is expected to accelerate in 2HFY26, with Hunter Class and HII contracts progressing and potential for significant ramp-up in FY 2027.

• Propulsion business is expanding with new products, shaftlines, and facility expansion for added capacity in 2HFY26.

• Gyrostabiliser market growth anticipated, driven by new product launches and increased market education.

• A slower first half is anticipated for FY 2026, with a much stronger second half and an even stronger FY 2027 expected.