Key Highlights

  • McPherson's expects FY26 revenue from continuing operations of $115.0 million to $120.0 million, down from $139.0 million in FY25, with underlying EBITDA guided to $4.0 million to $4.5 million, down from $7.3 million in FY25.
  • The company anticipates preliminary non-cash intangible asset impairments of $15.0 million to $20.0 million, reflecting trading performance relative to plan, to be classified as a material item that will not affect underlying earnings.
  • Net cash stood at $4.5 million as at 30 June 2026, down from $8.8 million a year earlier, with debt facilities undrawn and 4,995,130 shares acquired for $0.8 million under the company's on-market share buy-back.
  • McPherson's says its new operating model continues to deliver lower distribution costs and tighter overhead control, partly offsetting the impact of lower sales revenue, with audited FY26 results due on 27 August 2026.

McPherson's Limited (ASX:MCP) has issued a trading update on its preliminary, unaudited financial results for the full year ended 30 June 2026, guiding to lower revenue and underlying EBITDA compared with FY25, alongside anticipated non-cash intangible asset impairments of $15.0 million to $20.0 million.

FY26 Revenue and Earnings Guidance

McPherson's expects FY26 revenue from continuing operations to be in the order of $115.0 million to $120.0 million, down from $139.0 million in FY25. Underlying EBITDA is expected to be in the order of $4.0 million to $4.5 million, compared with $7.3 million in FY25. Second-half underlying EBITDA is guided at $1.8 million to $2.3 million, broadly similar to the $2.2 million reported in the first half of FY26. The company describes these figures as preliminary and unaudited management estimates, subject to audit adjustments ahead of the release of its full audited results.

Drivers Behind the Softer Result

McPherson's attributes the anticipated result to challenges related to its transition to a new operating model, first foreshadowed in an announcement dated 23 April 2026, which affected sales performance during the year. These challenges included forecast variability as the business adapted to new ordering patterns, reduced in-store availability following range rationalisation, and delayed effects from out-of-stock issues that, while resolved early in the second half, constrained the company's participation in customer promotional activity. Since the April update, a number of McPherson's customers have reduced inventory cover days, adjusted stock levels and tightened ranging in response to broader macroeconomic conditions and competitive dynamics within their channels. The company notes that while ordering patterns from customers have largely stabilised, some variability continues, which, combined with a decision to increase the company's own inventory levels, affected closing cash balances.

Balance Sheet and Capital Management

Net cash stood at $4.5 million as at 30 June 2026, down from $8.8 million a year earlier, with debt facilities undrawn at year end. As part of its on-market share buy-back announced on 25 February 2026, the company has acquired 4,995,130 shares for a consideration of $0.8 million. McPherson's states that its new operating model continues to deliver materially lower distribution costs, improved efficiency and tighter overhead control, which it says have partly mitigated the impact of lower sales revenue, alongside a disciplined reduction in advertising and promotional spend during the second half.

Anticipated Impairments

As part of its year-end processes, McPherson's is required to undertake impairment assessments of its intangible assets. Based on preliminary analysis reflecting trading performance relative to plan, management anticipates non-cash impairments in the range of $15.0 million to $20.0 million, on an unaudited basis. These impairments will be classified as material items in the company's FY26 accounts and are stated as not impacting underlying earnings. The company notes that, to the extent impairments relate to McPherson's-owned brands, these may be reversed upon an improvement in the performance of those brands in future periods.

Portfolio Context and Share Market Reaction

McPherson's portfolio is anchored in household brands including Manicare, Swisspers, Lady Jayne, Maseur, Glam, Dr. LeWinn's and Fusion Health, sold through pharmacy, grocery, health food and e-commerce channels. McPherson's shares were recently trading at $0.14, down 9.38% on the day, according to intraday market data, reflecting the market's reaction to the guided decline in revenue and earnings alongside the flagged impairment charge. The company expects to release its audited FY26 results on Thursday 27 August 2026, which will provide further detail on the final position across revenue, earnings, impairments and cash flow.

Conclusion

McPherson's trading update points to a materially softer FY26 than the prior year, with revenue and underlying EBITDA both guided lower amid the ongoing transition to a new operating model and a more cautious ordering environment among its retail customers. While cost discipline under the new operating model has partly offset the sales decline, the anticipated non-cash impairment charge of up to $20 million underscores the extent to which trading performance has diverged from the company's original plan. With audited results due on 27 August 2026, investors will have the opportunity to assess the final figures in full, including any changes to the preliminary estimates outlined in this update, alongside management's commentary on the outlook for FY27.