Highlights

  • VEEM (ASX:VEE) reported FY26 Revenue of A$51.7 million and EBITDA of A$3.6 million, both within its stated guidance range.
  • A A$24.8 million non-cash Impairment against the gyrostabiliser programme drove a statutory net loss of A$17.8 million.
  • Defence revenue reached A$12.3 million, supported by stronger activity from ASC submarine refit orders.
  • Operating cash flow increased 64% to A$4.8 million, while net Debt declined substantially during FY26.

VEEM (ASX:VEE) spent several years investing in its gyrostabiliser business, but FY26 marked a major reassessment of that programme. The marine and defence engineering company recorded a sizeable non-cash impairment while still delivering revenue and EBITDA within guidance, reducing debt and generating stronger operating cash flow.

For investors assessing the next phase, the key question is what the underlying Business looks like after the write-down. Defence activity is expanding, while the company's propulsion portfolio, including its VEEM Extreme range, provides another potential growth avenue through FY27.

Latest Development

In its FY26 financial results released in late August 2026, VEEM (ASX:VEE) reported revenue of A$51.7 million, at the upper end of its A$50-52 million guidance range but 25% below FY25 revenue of A$68.6 million.

EBITDA of A$3.6 million was also within the guided A$3.25-3.75 million range.

The statutory result was a net loss after tax of A$17.8 million compared with a A$3.0 million profit in FY25. The result included a A$24.8 million impairment relating to the gyrostabiliser programme, comprising A$24.2 million of capitalised product development costs written down to nil and A$0.6 million of inventory treated as obsolete.

Operating cash flow moved in the opposite direction, increasing 64% to A$4.8 million.

Company Overview

VEEM (ASX:VEE) manufactures precision-engineered marine and defence products, including propellers, gyrostabilisers designed to reduce vessel roll, components for submarines and frigates, and foundry-based engineering solutions.

The company has been listed on the ASX since 26 October 2016 and sells into global markets from its Australian Manufacturing operations.

Its activities span defence, marine propulsion, engineering services and gyrostabiliser technology, providing exposure to both government-related programmes and commercial vessel markets.

Recent Developments

Segment performance diverged materially during FY26.

Defence revenue reached A$12.3 million, with A$8.6 million generated in the second half compared with A$3.7 million in the first half. The increase was attributed largely to ASC submarine refit orders.

Non-defence propulsion contributed A$24.9 million, while engineering generated A$14.3 million, down 14% as defence work absorbed a greater share of available manufacturing capacity.

Gyrostabilisers remained the weaker area. Revenue from the segment declined by A$9.5 million amid softer marine-market conditions, with only one unit sold during the second half. This performance contributed to the decision to recognise the impairment.

VEEM nevertheless launched its Mark III gyrostabiliser range, incorporating a patent-pending oiling system, and introduced the VEEM Extreme propeller range. The company states that the new propeller design can deliver fuel savings of 24.1% compared with a standard configuration.

In an update released in late July 2026, VEEM advised that Trevor Raman would step down as Chief Executive Officer while remaining temporarily to assist with the transition. Managing Director Mark Miocevich continued in an expanded role, with no replacement announced at that time.

Financial and Operational Position

VEEM (ASX:VEE) ended FY26 with net debt of A$1.2 million, down from A$13.7 million in the prior year.

The improvement was supported by a A$14.0 million Capital raising, which generated net proceeds of A$13.1 million.

Undrawn overdraft and trade facilities totalled A$7.1 million.

The company also invested A$2.5 million in equipment and A$4.5 million in Research and Development during the year, reflecting continued spending on manufacturing capability and product development.

What Investors May Watch Next

Management expects defence revenue to remain elevated as ASC-related orders continue to be delivered into FY27.

Growth in propulsion demand, particularly the commercial rollout of the VEEM Extreme range, will be another important operational measure.

Investors may also monitor the appointment of a new Chief Executive Officer, commercial uptake of the Mark III gyrostabiliser range and whether the balance-sheet improvement achieved in FY26 can be maintained.

The ability to sustain stronger operating cash generation while supporting further Investment will also be important as the company moves through FY27.

Risks

The gyrostabiliser impairment indicates that a heavily funded product programme has not delivered the commercial performance originally anticipated, while recreational marine Demand may remain subdued.

Revenue declined 25% in FY26, and a growing proportion of activity now depends on defence programme schedules, which can shift between reporting periods.

The absence of a permanent Chief Executive Officer adds an element of management uncertainty.

The 24.1% fuel-saving figure attributed to the VEEM Extreme range is based on company-reported data and will ultimately need to be supported by broader customer experience and operational performance.

As an Australian manufacturer with international customers, VEEM (ASX:VEE) also remains exposed to currency movements, input costs and manufacturing execution.

Conclusion

VEEM (ASX:VEE) enters FY27 following a substantial reset of its gyrostabiliser business, but with several underlying financial and operational indicators moving in a more favourable direction.

Revenue and EBITDA met guidance, Operating Cash Flow increased 64%, net debt declined substantially and defence activity accelerated during the second half.

The next phase will depend on whether defence deliveries remain elevated, the VEEM Extreme propeller range gains commercial traction and the company can stabilise its gyrostabiliser operations following the impairment. Leadership transition and continued balance-sheet discipline will also remain relevant to the FY27 outlook.