Coventry Group Ltd FY25 Trading Update and Strategic Outlook

Coventry Group Ltd (ASX: CYG) reported FY25 sales of AU$365.2 million, down 1.7% year-on-year, with unaudited EBITDA of AU$12.3 million, a 40.9% decline. The performance was impacted by softer market conditions in Australia and New Zealand, disruption from the ERP system rollout, and underperforming sales strategies. Despite stable gross margins, a high-cost base led to weak net margins.

To address this, management is targeting AU$10 million in annualized cost reductions and embedding cost controls in incentive plans. Net debt stood at AU$56.2 million, influenced by high inventory and ERP expenses. A simplified debt facility is in progress. A one-off AU$1.3 million loss from an onerous contract in the Fluid Systems segment was recognized.

Looking ahead, Coventry Group is executing a “back to basics” strategy, prioritizing cost optimization, sales growth, debt reduction, and operational efficiency, with FY26 EBITDA guidance exceeding AU$20 million and improving quarter-on-quarter performance.

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