Key highlights:

• FY26 preliminary unaudited sales reached a record $165.0 million (up 13.7%), with EBITDA surging 44.4% to $14.3 million and net profit after tax jumping 87.1% to $5.8 million.

• The $22 million acquisition of Hardware & Building Traders (HBT) in November 2025 expanded Stealth's network from about 32 stores to roughly 1,200 and its supplier base from around 800 to 1,300.

• Management targets $500 million in annual sales by FY28 at an EBITDA margin of 8%–12%, anchored by the HBT network, new hardware retail stores and digital marketplace channels including JB Hi-Fi, Woolworths online and Amazon.

For years, Stealth Group Holdings (ASX:SGI) sat quietly in the small-cap corner of the market, a competent but unremarkable distributor of hardware and safety products out of Perth. That description no longer fits. In a trading update lodged with the ASX on 17 June 2026, the company revealed preliminary unaudited full-year numbers that stopped investors in their tracks: record sales, a sharp lift in earnings and net profit up more than 87%.

The market responded in kind, with shares jumping by roughly a third on the news. The figures signalled a business converting hard-bought scale into genuine operating leverage, and one of the more intriguing growth stories on the small-cap boards.

Company Overview

Established in 2014 and listed on the ASX in October 2018, Stealth Group Holdings is an Australian distribution and retail group headquartered in Perth. It grew through the 2018 acquisition of Heatley Sales, a Western Australian industrial and safety distributor that anchored the group in the tools trade.

Today the business spans brands including Heatleys Safety, Force Technology, C&L Tool Centre and Hardware & Building Traders, and distributes exclusive brands such as CAT, Harden Tools and RIVO alongside consumer names like PanzerGlass and Tech21. It positions itself as a leading independent distributor across a fragmented Australian market it estimates at around $120 billion, spanning hardware, timber, building supplies, paint, garden, plumbing, rural and pet categories.

Latest News

The catalyst for the re-rating was the June update. Its centrepiece is the $22 million acquisition of Hardware & Building Traders (HBT), completed in November 2025 and funded in part through a $19.5 million capital raise the following month.

The deal has transformed the group's footprint. HBT brought roughly 1,165 independent member stores and 490 preferred suppliers into the fold, expanding Stealth's network from about 32 stores to roughly 1,200 and lifting its supplier base from around 800 to 1,300. Management said integration was progressing at pace, with systems, supplier and member workstreams completed, and flagged expansion into 42 hardware stores in the fourth quarter.

Why Investors Are Watching

The appeal is the gap between where the business is and where it says it is heading. CEO Mike Arnold framed the moment plainly, noting that "the integration is progressing at pace, with multiple initiatives completed and further synergy and growth opportunities underway."

Stealth has laid down a bold marker: $500 million in annual sales by FY28 at an EBITDA margin of 8% to 12%, which would require roughly tripling sales in two years. The attraction is the optionality in the network: with about 1,200 stores and 1,300 suppliers under one roof, even modest gains in purchasing terms and cross-selling could lift profit sharply. The 87% jump in NPAT is a first proof point that the model works.

Growth Opportunities

The growth thesis rests on several pillars. The first is synergy extraction from HBT: consolidating procurement across a larger supplier base and lifting the share of higher-margin private-label products.

The second is channel expansion. The push into 42 hardware retail stores and onto digital marketplaces such as JB Hi-Fi, Woolworths online and Amazon opens consumer-facing revenue, with management pointing to more than $10 million of incremental sales from these channels by the end of FY28. The third is the runway offered by a fragmented $120 billion market ripe for a scaled independent to consolidate.

Risks

The flip side of an ambitious target is execution risk. Tripling sales to $500 million by FY28 leans heavily on flawless HBT integration and delivery of promised synergies; acquisition-led models can stumble when systems, cultures and supplier relationships prove harder to combine than planned.

There are cyclical concerns too. Exposure to hardware, building supplies and construction-linked categories ties Stealth's fortunes to a housing and renovation cycle sensitive to interest rates and consumer confidence. Margin sustainability is a further question mark: the FY28 guidance spans a wide 8% to 12% band, and where the group lands within it will materially affect earnings. The December 2025 capital raise is a reminder, too, that an acquisitive strategy can bring further dilution.

Industry Outlook

The broader backdrop is mixed but not unfavourable for a consolidator. Australia's hardware, industrial, safety and home-improvement sectors are large, mature and fragmented, with a long tail of independents lacking the buying power of national chains, precisely the condition that rewards a group able to aggregate purchasing scale.

Demand across trade and industrial channels is underpinned by infrastructure activity, maintenance spending and a steady renovation market, even as new housing construction ebbs and flows with the rate cycle. For a distributor positioned as the independent's ally against big-box rivals, the case for consolidation looks durable, provided the economy avoids a sharp building downturn.

What to Watch Next

The immediate focus is the audited FY26 accounts, which will confirm whether the preliminary figures hold firm. Beyond that, investors will scrutinise the FY27 result for the "step-change" growth management has promised as the first full year of HBT ownership flows through.

Other milestones include synergy realisation, the ramp-up of the new hardware stores and marketplaces, movement in the EBITDA margin towards the upper end of the guided range, and the state of the balance sheet. Any signal on further bolt-on deals will also shape the risk profile.

Conclusion

Stealth Group's FY26 update marks a genuine inflection point. Record sales of $165 million, a 44% lift in EBITDA and an 87% surge in net profit show a business beginning to translate hard-won scale into real earnings power. Whether it can bridge the gap to its $500 million FY28 ambition remains the open question, one hinging on disciplined integration and a cooperative housing cycle.

But the direction of travel is clear and the early evidence encouraging. For investors weighing a small-cap distributor stepping up to national scale, Stealth has earned its place on the watchlist. As always, this is editorial analysis rather than investment advice.