Big River Industries H1 Earnings Call Highlights
by Kim Johansen · The Markets DailyBig River Industries (ASX:BRI) management told investors its first-half FY26 result reflected resilient margins, strong cash conversion and ongoing cost discipline despite continued softness in parts of the residential construction market.
CEO and Managing Director John Lorente, joined by CFO John O’Connor, said the group’s revenue decline moderated versus recent periods and pointed to early signs of market stabilization. The company also highlighted its expanded site footprint following the acquisition of Johns Building Supplies (JBS) in Western Australia and continued network optimization to improve utilization and efficiency.
Network changes and operating platform
Lorente said the group now operates 25 sites following the JBS acquisition in Western Australia and the amalgamation of the Breakwater and Beaufort sites last year. He said the consolidation strengthened utilization and improved efficiencies.
Queensland remained the largest region at 33% of revenue, which management said aligns with forecast medium-term population growth and infrastructure activity. Western Australia was described as one of the company’s stronger performers to date, with JBS adding scale and capacity in the state.
Management also emphasized supply chain diversity as a competitive advantage, stating that 21% of products are manufactured by Big River, 17% are direct imports, and 62% are sourced from local partners. Lorente said this supports a broad, differentiated product range and provides flexibility in response to changing market conditions.
First-half FY26 financial headlines
For the half, group revenue was AUD 206 million, down 2.6% from the prior corresponding period. On a like-for-like basis, adjusting for JBS and trading days, revenue declined 1.4%.
Gross profit margin increased 20 basis points to 26.6%, which management attributed to disciplined pricing, improved mix, and closer supplier alignment despite soft volumes and competitive pricing conditions.
Underlying EBITDA was AUD 14.5 million, down 2% year-on-year, while EBITDA margin improved 10 basis points to 7.1%. Operating expenses declined 1.5% versus the prior period (or 1.8% like-for-like), which the company linked to efficiency initiatives implemented over the past 18 months.
Operating cash flow was AUD 13.2 million, with cash conversion of 91% compared with 78% in the prior period. Net working capital to revenue remained steady at 17.7%, within the company’s target range, and gearing reduced to 19.1% despite funding the AUD 13 million cash component of the JBS acquisition.
Statutory NPAT improved to AUD 1.4 million compared with a AUD 17 million loss in the prior period, with management noting the prior-year impairment was not repeated. The board declared an interim dividend of AUD 0.02 per share, fully franked, representing an 81% payout ratio on underlying NPAT. O’Connor added the dividend is expected to be paid on 2 April.
O’Connor also noted that the group acquired JBS in late December 2025 for total consideration of AUD 17 million, with AUD 0.9 million in acquisition costs recognized as a significant item in the half, largely related to stamp duty in Western Australia. He said the company completed a AUD 10 million renounceable entitlement offer in December, which Lorente said was oversubscribed with strong shareholder participation.
Division performance: construction strength offsets panel pressure
In the construction division, revenue declined 1.1% to AUD 138.7 million, with management citing ongoing pressure in frame and truss due to subdued residential volumes and competitive pricing. However, EBITDA increased 20.4% to AUD 12.4 million, and EBITDA margin rose from 7.4% to 8.9%. Lorente said drivers included growth in formwork and commercial revenue, improved utilization and reduced duplication following the Beaufort and Breakwater amalgamation, and targeted equipment upgrades at Breakwater and Dry Creek that lifted productivity and workflow.
In the panels division, revenue declined 5.7% to AUD 67.3 million, reflecting competitive pressure in commodity product lines and softer volumes in more cyclical markets. EBITDA fell 25% to AUD 6.6 million, and margin decreased from 12.3% to 9.8%. Management attributed the decline primarily to operating leverage on lower volumes and continued competitive intensity in commodity categories. Lorente said higher-margin differentiated categories, including decorative bespoke panels and cladding, continued to grow and remain central to the company’s strategy, and he pointed to the installation of a new laminating line at “the Silky” to expand capability and support mix improvement over time.
Outlook, integration of JBS, and targeted growth areas
Management described macro conditions as mixed, with subdued housing completions and delays tied to labor availability, supply chain bottlenecks, and site sequencing. Lorente said approvals have begun to rise, but interest rate expectations have shifted in recent months, creating uncertainty that continues to influence demand and project timing decisions.
Regionally, Lorente said Western Australia and parts of South Australia remained comparatively strong, Queensland was “structurally attractive” over the medium term despite near-term competitive intensity, and Victoria and New Zealand remained softer. Entering the second half, management expects residential housing to remain uneven over the next 12 months, while commercial and formwork activity remains comparatively resilient.
On strategy, Lorente reiterated long-term ambitions including gross margin expansion, working capital below 20% of revenue, and an EBITDA margin above 10% averaging 10% through the cycle, while continuing to pay sustainable fully franked dividends. He said the company remained positioned to capture operating leverage as volumes increase, supported by earlier work on network optimization, supplier alignment, manufacturing efficiency, ERP alignment and system upgrades.
During Q&A, Lorente highlighted targeted growth opportunities in cladding—saying the market is growing and that Big River has been growing above market in that vertical for several years—as well as decorative and technical panels, supported by product development across facilities including SLQ, Timberwood Campbellfield, and Grafton. He also said the company sees opportunities to invest organically and selectively pursue acquisitions aligned with those segments and regions.
On integration, Lorente said JBS had integrated “very well,” noting cultural alignment and close collaboration between Big River’s existing Perth teams and the acquired business. He said the company is identifying synergies, including procurement benefits, and flagged potential medium-term operational synergies, particularly related to frame and truss expansion in Western Australia, while adding it was too early to provide a quantified estimate given JBS joined the group on 15 December.
About Big River Industries (ASX:BRI)
Big River Industries Limited, together with its subsidiaries, engages in the manufacture, distribution, and retail of timber products and building supplies in Australia and New Zealand. The company operates through two segments, Panels and Construction. It offers building products, such as builders' hardware, LVL and laminated beams, doors, timber moldings, door furniture, particle board flooring, external timber cladding, structural plywood, fibre cement, sheet products, timber flooring, decking, pine framing, formwork products, structural hardwoods, insulation, and landscape and fencing supplies.