Key Highlights

  • Revenue fell 18% to $5.5 million compared with the September 2025 quarter, but Gross Profit rose 2% to $1.8 million as gross Margin lifted from 25.7% to 32.0%
  • EBITDA loss narrowed by 44% to $0.8 million; net loss after tax improved to $1.1 million from $2.0 million in the prior year quarter
  • Operating expenses fell 20% to $2.6 million, driven by a 57% cut in corporate costs following management restructure
  • RLF China Revenue grew 32% to $1.9 million and came in ahead of budget, with its loss cut by more than half

Fewer Sales, Better Returns: A Quarter of Structural Change

RLF AgTech Ltd (ASX:RLF), the agricultural technology company whose Australian operations centre on the LiquaForce biostimulant product range, delivered a September 2026 quarter that tells two distinct stories. Trading profit is improving. Cash is not — at least not yet.

The September quarter is RLF's busiest period in Australia, coinciding with the cane growing season and associated LiquaForce sales. Revenue fell 18% year-on-year to $5.5 million, but the more important number for the company's medium-term trajectory is gross margin, which rose to 32.0% from 25.7% a year earlier. Gross profit came in at $1.8 million, fractionally above the prior corresponding period.

The improvement stems from a deliberate repricing of LiquaForce products — moving from a tolling fee model, where a margin was applied only to services, to one that embeds a margin on raw materials. This structural shift means the company now captures more value per product unit sold, even if Volume has fallen.

Cost Structure Takes Shape Under New Management

Almost all of RLF's Australian team has changed in the past year, including a new CEO and new Board. The cost structure that emerges from the September quarter reflects those changes. Total operating expenses of $2.6 million were 20% below the September 2025 quarter, with corporate costs cut by 57%. The EBITDA loss narrowed to $0.8 million from $1.4 million, and the net loss after tax improved to $1.1 million from $2.0 million.

CEO Stuart Upton acknowledged the dual nature of the quarter in his commentary: "The changes we have made are starting to lift profit. And we still have work to do on cash and on getting back to profit."

China: A Bright Spot

RLF China delivered a standout performance, with revenue growing 32% to $1.9 million and tracking ahead of budget. The China business's loss was cut by more than half, making it an increasingly important contributor to the group as the Australian operation continues its turnaround. RLF China also takes customer prepayments for the 2027 season in the December quarter, providing a cash inflow that should improve the near-term cash position.

The Cash Problem Is Temporary — For Now

The operating cash outflow of $3.6 million was the number most likely to cause discomfort for investors. It was $1.9 million wider than the September 2025 quarter's $1.7 million outflow, even though the accounting loss improved substantially. The company attributes the discrepancy to Working Capital dynamics and legacy issues from the previous management era.

Three specific factors drove the cash divergence. Key LiquaForce suppliers tightened Credit terms after invoices were paid late under the previous management team, meaning more purchases were funded directly from cash rather than on credit — trade creditors rose $1.0 million against $3.0 million in the prior year quarter. Approximately $0.3 million of previously accrued liabilities were settled during the quarter, including redundancy and deferred director payments from the restructure. Seasonal working capital tied up an additional $1.6 million in trade debtors and inventory.

The company argues that most of this outflow is recoverable. Cane season debtors will be collected in the December quarter, China will generate prepayment inflows, and supplier credit should be restored once consistent on-time payment has been demonstrated. With $6.4 million in cash at 30 September — split between $3.6 million in Australia and $2.8 million in China — the company has capacity to navigate the near term, but will need the cash recovery to materialise.

Sector Context

RLF operates in the Australian agricultural inputs market, serving the sugarcane industry through LiquaForce and the broader horticulture and broadacre sectors through its biostimulant range. Biostimulants — products that enhance plant nutrient uptake, stress tolerance and Yield without being classified as traditional fertilisers — are a growing global market segment.

The company's model of pairing Australian production with a Chinese distribution arm provides geographic diversification, though it also introduces foreign exchange risk and operational complexity. The China business's outperformance this quarter is an encouraging signal that the model can generate value on both sides of the ledger simultaneously.

Risks

The 1.8 quarters of funding flagged in the Appendix 4C triggers the mandatory disclosure at item 8.6, which requires the company to address its funding position. The company states that cash outflows will improve as receivables are collected and China prepayments flow in. Should that improvement not materialise on schedule, the company may need to access additional capital. A $3.9 million Equity raise was completed in September 2026, which provided a buffer, but the current cash position remains lean relative to operating requirements.

Supplier credit normalisation is a dependency that sits partly outside the company's direct control. If key LiquaForce suppliers maintain tighter terms beyond the current season, working capital requirements will remain elevated.

What to Watch Next

The December quarter is the next key checkpoint. If seasonal debtor collections and RLF China prepayments flow through as management expects, the cash position should recover and the funding disclosure pressure will abate. Further evidence of gross margin stability above 30% would reinforce the structural profitability improvement narrative. Progress toward breakeven EBITDA on an underlying basis — which management has flagged as a medium-term objective — will determine whether the turnaround is on track.