Waterco (WAT) H2 2025 earnings summary

Executive summary

• FY25 was a transitional year focused on integration, leadership renewal, and operational efficiency, absorbing one-off costs to establish a leaner growth platform.

• Revenue increased 4% year-over-year to $254.9 million, driven by improved sourcing, freight efficiencies, and targeted growth initiatives, but profit after tax declined 31% to $9.6 million due to macroeconomic conditions and cost pressures.

• Integration of Davey delivered procurement, operational, and distribution efficiencies, supporting underlying EBIT.

• New UAE subsidiary established to capture Middle East growth, complementing international expansion.

• Continued investment in R&D, with IoT-connected heat pumps and platform development for FY26 roll-out.

Financial highlights

• Revenue from continuing operations rose to $254.9 million from $244.8 million year-over-year.

• Underlying EBITDA down 2% to $33.2 million; underlying EBIT down 8% to $20.6 million; statutory EBIT down 24% to $16.7 million.

• Statutory NPAT down 31% to $9.6 million; statutory EPS down 31% to 27.2 cents.

• Underlying NPAT down 12% to $12.4 million; underlying EPS down 12% to 35.2 cents.

• Total fully franked dividend maintained at 15 cents per share, representing a 55% payout ratio.

Outlook and guidance

• Focus on expanding market share in Pool & Spa, broadening geographic reach, and strengthening customer connections.

• Davey integration synergies expected to further lift margins and operating cash flows through FY26.

• Ongoing investment in innovation, IoT platform launch, and selective M&A in US and Europe.

• Manufacturing capacity to be expanded with new plant construction commencing in FY26.

• Volatility in foreign exchange expected to reduce due to treasury restructuring.