Highlights

  • VEEM shares rose 8.89% on 9 June 2026 following a factory expansion and trading update.
  • The company expects FY26 Revenue to be between AUD 50 million and AUD 52 million.
  • FY26 EBITDA is forecast to range between AUD 3.25 million and AUD 3.75 million.
  • Construction of a factory extension has been completed, adding approximately 1,000 square metres of Manufacturing space.

Shares of VEEM Ltd (ASX:VEE) moved higher during the morning session on 9 June 2026, climbing 8.89% to AUD 0.49 after the company released a factory expansion and trading update outlining progress on manufacturing capacity upgrades and expectations for the current financial year.

The market reaction came as VEEM confirmed completion of a major factory extension project, provided revenue and EBITDA guidance for FY26, and highlighted improving activity across its defence and marine businesses during the second half of the year.

While the stock recorded a positive move following the announcement, VEEM shares remain down 40.96% over the past 12 months, reflecting the challenges experienced during what management has described as a transition year for the Business.

Company Overview

VEEM is an Australian defence manufacturer specialising in marine propulsion systems, gyrostabilisation technology and specialised engineering components for defence, commercial marine and recreational vessel markets.

The company designs and manufactures high-technology marine propulsion products and large gyrostabiliser systems used across defence vessels, yachts, fast ferries and commercial workboats.

Operating from a purpose-built manufacturing Facility in Perth, Western Australia, VEEM also produces specialised defence components and continues to invest in product development and manufacturing capability to support future growth opportunities.

Its operations span propulsion systems, gyrostabilisation technology, engineering solutions and defence-related manufacturing activities.

Factory Expansion Reaches Completion

A key component of the update was the completion of VEEM’s factory extension project, which management described as the culmination of several years of planning.

The new facility is expected to add approximately 1,000 square metres of additional manufacturing space, providing capacity to support anticipated growth across several business segments.

According to the company, the expanded facility will be particularly important for production of VEEM Extreme products, which require longer machining times due to the high-tensile characteristics of the materials used.

Management indicated that the additional space not only accommodates current expansion requirements but also leaves room for further equipment installations in the future.

The company believes this flexibility could support growth opportunities across propulsion, defence and engineering activities over the coming years.

New CNC Machines Set to Increase Manufacturing Capacity

Alongside the completion of the factory extension, VEEM confirmed that three new Computer Numerical Control (CNC) machines are expected to arrive shortly.

The machines are scheduled for delivery during the week, with installation and commissioning expected to commence immediately after arrival.

Management expects the commissioning process to be completed during the first quarter of FY27.

The addition of these machines forms part of VEEM’s broader strategy to increase manufacturing capability and support future production requirements.

Combined with the newly completed factory extension, the equipment Investment is intended to provide additional production flexibility and support anticipated increases in customer Demand across multiple business areas.

3D Printing Capability Added Following Government Support

VEEM also provided an update on the installation of a new industrial 3D printer, which has now been delivered, installed and successfully commissioned.

The equipment was partially funded through the Defence Industry Development Program – Sovereign Industry Priorities Stream, under which VEEM received a total grant of AUD 1 million.

The company had previously received AUD 400,000 of the funding and has now collected the remaining AUD 600,000 balance.

According to VEEM, the new technology introduces additional manufacturing capabilities that are expected to improve production speed and accuracy.

Management noted that the technology could contribute to operational efficiencies while potentially expanding the range of products and services available to existing and prospective customers.

FY26 Revenue and EBITDA Expectations

The trading update also provided guidance regarding expected financial performance for FY26.

VEEM stated that revenue for the year is expected to be between AUD 50 million and AUD 52 million.

At the Earnings level, the company expects EBITDA to range between AUD 3.25 million and AUD 3.75 million.

The projected outcome is being supported by the fulfilment of orders received from ASC during late 2025 and the first quarter of 2026.

As these contracts progress, management expects defence-related revenue during the second half of FY26 to be significantly higher than the first half.

The guidance provides investors with a clearer view of how the business expects to finish the financial year while transitioning into FY27.

Defence Business Drives Second-Half Improvement

A notable theme throughout the update was the improvement experienced within VEEM’s defence segment during the second half of FY26.

The company indicated that fulfilment of ASC orders already in hand has been a major contributor to improved operating conditions compared with the first half of the year.

Defence-related activity has therefore become an important driver of earnings recovery during the latter part of FY26.

Management highlighted that the improvement aligns with expectations previously communicated to the market and reflects progress in executing existing contracts.

The increased contribution from defence work has helped offset some of the challenges associated with the company's broader transition phase.

Marine Propulsion Activity Continues to Recover

Beyond defence, VEEM also reported continued improvement within its propulsion business.

The company stated that recovery in propulsion orders and sales has continued from earlier in the calendar year, supporting business activity during the second half.

Particular attention was given to deliveries associated with VEEM Extreme products, including work linked to Manly Fast Ferries.

The company has invested significantly in the development of these products, which management believes can contribute to future revenue growth.

The completion of the factory extension and installation of additional machinery is expected to support production requirements associated with these specialised propulsion systems.

Gyrostabiliser Business Shows Signs of Improvement

VEEM also provided an update on its gyrostabiliser division, another important component of its business portfolio.

While the company reported no gyro sales during the first half of FY26, conditions improved during the second half.

Management confirmed the sale of one VG140 unit during the latter half of the financial year.

The company also reported continued customer enquiries following the introduction of its Mark III gyro platform.

VEEM indicated that gyro sales are expected to continue increasing as the business moves into FY27, although no specific sales targets were disclosed.

The update suggests that commercial activity within the segment is gradually improving following a subdued first-half period.

FY26 Described as a Transition Year

Management reiterated that FY26 represents a transition year for VEEM as investments made in product development and market expansion begin progressing towards commercial outcomes.

The company has incurred costs associated with development of the VEEM Extreme propulsion range and the Mark III gyro platform.

At the same time, VEEM has been investing in efforts to enter new markets, including opportunities within the United States defence sector.

According to the company, these initiatives are expected to begin contributing more meaningfully to revenue generation during FY27.

The combination of new products, expanded manufacturing capability and growing defence activity forms part of VEEM’s longer-term growth strategy.

Balance Sheet Remains Stable

VEEM also highlighted that cash generation has remained favourable throughout the period.

The company expects its June 2026 cash balance to remain broadly consistent with the position reported at 31 December 2025.

Maintaining cash levels while investing in manufacturing expansion, product development and new technology capability may provide additional operational flexibility as VEEM enters FY27.

The company noted that it continues to maintain a solid balance sheet position despite the ongoing investment cycle.

Why Did VEEM Shares Rise Today?

The share price increase appears to reflect a combination of operational and financial updates disclosed by the company.

Investors may have responded positively to confirmation that the factory expansion project has been completed, with additional manufacturing capacity expected to become available in the near term.

The arrival of new CNC machinery, commissioning of a 3D printer and receipt of the remaining AUD 600,000 grant funding also highlighted progress on VEEM’s capability expansion initiatives.

Additionally, the company's revenue and EBITDA expectations, together with improving activity across defence, propulsion and gyrostabiliser segments, may have contributed to the positive market reaction.

What This Means for Investors

VEEM’s latest update provides insight into how the company is positioning itself for FY27 following what management describes as a transition year.

The completion of a 1,000-square-metre factory extension, pending installation of three new CNC machines and successful commissioning of a new 3D printer represent significant manufacturing milestones for the business.

At the same time, the company expects FY26 revenue of between AUD 50 million and AUD 52 million and EBITDA of between AUD 3.25 million and AUD 3.75 million, supported by stronger defence activity and improving conditions across its marine businesses.

Investors are likely to monitor how these operational investments translate into revenue growth and production capacity as VEEM enters FY27.