Highlights

• VEEM confirmed chief executive Trevor Raman is stepping down, with managing director Mark Miocevich assuming expanded leadership responsibilities during the transition period.

• The leadership change comes as VEEM focuses on expanding its defence manufacturing capabilities, including submarine supply opportunities and long-term naval contracts.

• Revenue for the half year ended 31 December 2025 declined approximately 30% to around A$23.4 million, while the company reported a net loss of approximately A$19.2 million.

• VEEM completed a 1,000 square metre factory extension in June 2026, with additional CNC machinery expected to be commissioned in the first quarter of FY27.

• VEEM shares traded at A$0.53, down 1.85% (-A$0.010) during the session, as investors assessed the balance between near-term financial pressure and long-term defence growth opportunities.

VEEM Ltd (ASX:VEE) is entering a significant transition period as leadership changes coincide with an ambitious expansion strategy centred around defence manufacturing, marine engineering and advanced production capabilities.

The company confirmed that chief executive Trevor Raman is stepping down, with managing director Mark Miocevich taking on broader responsibilities. The leadership transition arrives at a time when VEEM is attempting to convert recently secured defence opportunities into sustainable revenue growth following a challenging financial period.

Leadership Transition at a Critical Growth Stage

VEEM announced that Trevor Raman will depart from the chief executive position to pursue other career opportunities, while remaining with the company during a transition period.

Raman joined VEEM as chief executive on 1 July 2024 and was responsible for helping accelerate the company’s transformation from a traditional marine engineering business into a more diversified defence supplier.

Following the change, managing director Mark Miocevich will assume expanded leadership responsibilities. The transition places greater operational responsibility with a management team that has long-standing knowledge of VEEM’s manufacturing operations and customer relationships.

The leadership change occurs as VEEM prepares to execute its FY27 growth strategy across defence manufacturing, propulsion systems and gyrostabiliser products.

Defence Expansion Remains Core Growth Driver

VEEM’s long-term investment case is increasingly linked to its defence capabilities.

The company has built a position in precision casting and machining for defence applications, with more than A$250 million of defence-related work completed since the late 1980s.

A key milestone was the six-year A$65 million contract with ASC Pty Ltd to supply ball valve components for Collins Class submarines under licence from Flowserve Flow Control.

VEEM has also strengthened its position within global defence supply chains through a manufacturing licence agreement with Northrop Grumman, providing access to technical data and opportunities to participate in future component packages.

The company was also recognised in ASC’s Defence Industry Vendor Qualification update, enabling it to compete for potential Virginia Class submarine supply chain opportunities involving major international shipbuilders.

While these developments strengthen VEEM’s strategic position, converting qualifications and agreements into revenue remains a key focus for investors.

Financial Performance Under Pressure

VEEM’s financial performance has faced significant challenges as defence contracts take time to ramp up and broader marine demand remains subdued.

For the half year ended 31 December 2025, revenue declined approximately 30% to around A$23.4 million, while the company recorded a net loss of approximately A$19.2 million.

Management attributed the decline to weaker global marine conditions and delays in defence-related contract activity, while highlighting expectations that major defence programs could contribute more meaningfully from FY26 onwards.

The company’s previous financial performance also reflected pressure from lower revenue and higher operating costs. FY25 revenue was approximately A$68.6 million, with net profit declining compared with the previous year.

VEEM’s near-term challenge is balancing investment in future capacity with the need to improve earnings and cash generation.

Manufacturing Expansion Supports Future Capacity

VEEM has continued investing in manufacturing capability to support expected defence and marine demand.

The company completed a 1,000 square metre factory extension in June 2026, increasing available production capacity at its Western Australian facility.

Three additional CNC machines are scheduled for commissioning during the first quarter of FY27, supporting higher precision manufacturing capability.

The expansion reflects VEEM’s confidence in future defence opportunities but also increases the importance of securing additional contracts to improve asset utilisation and returns.

Why the Leadership Change Matters

The CEO transition is significant because VEEM is moving through a critical commercialisation phase.

Defence programs typically require lengthy qualification processes, technical approvals and strong customer relationships before generating meaningful revenue. Maintaining continuity during this period will be important as VEEM seeks to accelerate growth.

The appointment of Mark Miocevich provides operational familiarity, given his long association with the company and its manufacturing operations. However, investors will continue monitoring whether the leadership structure can support VEEM’s ambition to scale its defence activities while improving financial performance.

The company’s ability to convert defence credentials into recurring revenue will remain the key measure of success.

Growth Catalysts to Watch

Potential catalysts for VEEM include:

• FY26 full-year results and further clarity on FY27 revenue expectations.

• Growth in ordering activity under the ASC ball valve contract.

• Potential defence component opportunities through the Northrop Grumman manufacturing licence.

• Further progress within the Virginia Class submarine supply chain.

• Increased utilisation of expanded manufacturing capacity following factory upgrades and machinery commissioning.

Risks and Challenges

Leadership execution risk remains a key concern as VEEM transitions responsibilities during an important growth phase. Any disruption in strategic execution could delay progress across defence programs.

Financial pressure also remains significant following the recent loss-making period. Although the company has invested in additional manufacturing capacity, returns depend on securing sufficient contract volumes and improving production efficiency.

Qualification for defence supply chains does not guarantee immediate revenue. Opportunities linked to submarine programs and international defence partners may require extended timelines before translating into material financial contributions.

VEEM also remains exposed to fluctuations in commercial marine demand, customer concentration and the challenges of scaling a specialised manufacturing business.

What Investors Should Watch Next

Investors will focus on whether VEEM can demonstrate improving financial performance alongside its expanding defence profile.

Key areas to monitor include:

• FY26 financial results and outlook for FY27.

• Defence-related revenue contribution and order flow.

• Progress of new CNC equipment commissioning.

• Cash position and funding requirements.

• Further developments involving ASC, Northrop Grumman and submarine supply opportunities.

Conclusion

VEEM’s strategic direction remains focused on transforming the company into a broader defence and advanced manufacturing supplier. Recent milestones across submarine supply chains, defence qualifications and manufacturing expansion have strengthened its long-term positioning.

However, the company must bridge the gap between strategic opportunities and financial results. Revenue declines and recent losses highlight the challenge of funding expansion while waiting for defence programs to mature.

With shares trading at A$0.53, down 1.85% (-A$0.010), investor attention remains on whether VEEM’s defence pipeline can deliver sustainable growth and justify the investments already made.