H1 Expectations (24/2/26)

With the results out tomorrow I am just preparing for what to look for. Mike provided the below guidance at the November AGM, talking down any significant improvement for 1H26 Vs 1H25, so we shouldn’t be expecting much.  This would indicate an NPAT of $1.5-2m with 0-10% sales lift on 1H25.  So it’s probably going to be commentary updates on the progress of the HBT integration and various other initiatives that will provide more guidance than the financials.

The December capital raise will have ensured the balance sheet remains solid with the debt for the HBT acquisition being paid down. Working capital may be impacted by the acquisition and if so cash flow a bit wild until we get a more settled operating structure. Hence this will also look good or bad depending on the operational framing of what has happened on the HBT integration.

I will have an ear out for how the Tool Hire business and Loyalty Rewards are going in particular, taking an absence of commentary as an indication that they are falling well short of expectations. The topline sales numbers will also provide an indication on these plus the impact of exclusive brands and organic growth (subject to changes in store counts). I don’t expect much sales momentum as most of the initiative are nascent, but we need to see something indicating green shoots.

Of course I am expecting a continued commitment to the FY28 sales target of $500m+, any wiggle on this or absence of mentioning will likely have a radical impact on the share price…

Disc: I own RL+SM