Key Highlights

  • Revenue from continuing operations fell 14.9% to $118.3 million in FY26 from $139.0 million a year earlier.
  • Underlying EBITDA declined 41.4% to $4.3 million, while the EBITDA Margin fell to 3.6%.
  • Statutory net loss from continuing operations widened to $20.3 million from $16.6 million.
  • The Board will not pay a full-year dividend, while net cash declined to $4.5 million from $8.8 million.

McPherson's Limited (ASX:MCP) reported a weaker financial performance for FY26, with Revenue from continuing operations declining 14.9% to $118.3 million from $139.0 million in FY25. The company said the transition to its new pharmacy wholesaler and third-party logistics distribution model caused greater disruption than anticipated, particularly across the independent pharmacy channel.

Revenue was also affected by ranging changes, product availability issues, wholesaler rebates and the cycling of transitional inventory shipped into wholesalers during FY25. Excluding the impact of new wholesaler rebates and net transitional pipe-fill, revenue declined 10.1%.

Underlying contribution after Advertising and promotions fell 21.2% to $41.6 million, while underlying EBITDA decreased 41.4% to $4.3 million. The EBITDA margin contracted to 3.6% from 5.2% in FY25.

Core Brands Record Mixed Performance

Performance across McPherson's core portfolio varied during the year. Manicare revenue declined 5.7% to $45.1 million, compared with $47.9 million in FY25. The company attributed the result primarily to ranging disruption and increased competition, although Grocery and a major pharmacy customer provided some offset.

Swisspers was the exception among the major brands, with revenue increasing 1.0% to $21.8 million. Excluding the effects of wholesaler rebates and transitional pipe-fill, the company reported 4.1% growth.

Lady Jayne revenue fell 18.7% to $15.8 million, while Dr. LeWinn's declined 22.3% to $15.7 million. Dr. LeWinn's was affected by out-of-stock issues associated with packaging changes and supplier consolidation.

Fusion Health revenue decreased 22.1% to $12.1 million. The company cited weaker-than-expected innovation performance, lower rates of sale in health food channels and ranging disruption within independent pharmacy.

Material Items and Wider Statutory Loss

McPherson's recognised $25.6 million of pre-tax material items during FY26, including $20.7 million of non-cash Impairment charges. These comprised $15.0 million of Goodwill impairment in the ANZ segment and $5.7 million of Brand impairments.

Restructuring and transformation costs amounted to $1.5 million, while other items included $3.3 million, including $2.3 million of regulatory and legal costs associated with ASIC proceedings.

The statutory net loss from continuing operations increased to $20.3 million from $16.6 million in FY25. Basic and diluted loss per share from continuing operations was 14.2 cents, compared with a loss of 11.5 cents a year earlier.

Cash Position and Dividend Decision

Net cash stood at $4.5 million at 30 June 2026, down from $8.8 million at the end of FY25. Debt facilities remained undrawn. The reduction in net cash primarily reflected higher Working Capital requirements, with inventory increasing $6.4 million to $26.2 million as the company sought to restore product availability and accommodate changes in wholesaler ordering patterns.

The Board also decided not to pay a full-year dividend, citing retained losses and the FY26 loss after tax. During the year, McPherson's refinanced its debt facilities and completed an on-market share buy-back, acquiring 4,995,130 shares for $0.8 million as at 30 June 2026.

FY27 Priorities

McPherson's enters FY27 with a focus on restoring revenue growth through customer engagement, improved wholesaler SKU availability, consumer Marketing and its innovation pipeline. The company is also increasing Investment in owned and marketplace E-commerce capabilities.

The new operating model delivered approximately $2.8 million of route-to-market savings at the EBITDA level and approximately $5.6 million at the EBIT level. However, these structural savings were more than offset by lower revenue and reduced contribution from core brands during FY26.

Conclusion

McPherson's FY26 results show a year marked by lower revenue, reduced underlying EBITDA, a wider statutory loss and the suspension of the full-year dividend. While the new distribution model has delivered reported route-to-market savings and the company has reduced employee and other operating costs, these benefits did not compensate for weaker sales and execution issues during the transition. FY27 will therefore centre on restoring product availability, improving customer and brand performance, expanding e-commerce and increasing sales momentum under the embedded operating model.