COSOL Limited (ASX:COS): H2 Rebound Drives Stronger Operating Margins Amid Leadership Changes

Sonal Goyal

23 September 2026 11:46 AM AEST

COSOL Limited (ASX:COS): H2 Rebound Drives Stronger Operating Margins Amid Leadership Changes

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COSOL Limited (ASX:COS) is an Australian technology solutions company specialising in enterprise asset management, digital consulting, data analytics, and industrial AI solutions. The company serves clients across asset-intensive industries including utilities, transport, oil and gas, water, and government. COSOL's performance is influenced by its ability to win and retain long-term contracts in digital and data services, manage its cost base efficiently, and execute on its strategy of securing higher-margin, AI and industrial mathematics-enabled solutions.

What the Company Does

COSOL provides technology and consulting services focused on enterprise asset management (EAM), data and digital consulting, and AI-enabled solutions for industrial clients. The company's capabilities include implementation and support of EAM platforms, Data Analytics and business intelligence, digital transformation advisory, and AI-powered asset performance solutions.

The company has been pursuing a strategy of transitioning toward longer-term, higher-margin contracts using AI and industrial mathematics, positioning itself to capture Revenue from clients seeking to apply advanced analytics to asset management challenges. Recent contract wins in data and digital consulting and mass transportation projects reflect this strategic direction.

COSOL operates across Australia and Canada, with the mass transportation contract wins in both markets indicating a broadening geographic footprint in relevant industry verticals.

Financial and Operational Performance

According to COSOL's FY26 results announcement released 19 August 2026, the company reported underlying EBITDA of $9.8 million for the full year, with second-half underlying EBITDA of $6.3 million compared with $3.4 million in H1. Operating margins improved from 28.8% in H1 to 31.2% in H2, setting a platform for improved profitability.

Full year revenue was $98.6 million, down 15.6% from FY25, with the revenue decline reflecting the prior period's poor performance. The company recorded a Goodwill Impairment of $6.5 million relating to asset management services ($4.5 million) and Australian consulting ($2.5 million).

Leadership changes were also announced: Managing Director Scott McGowan stepped down after 10 years and assumed a new role as Executive Director Strategy and Solutions. CFO and COO Anthony Stokes was appointed as interim CEO, and Chairman Geoff Lewis assumed an executive chairmanship role through the transition. Major new strategic contracts were secured in data and digital consulting, together with two contract wins for mass transportation projects in Australia and Canada.

Key Factors Shaping the Business

The H2 operating recovery is the most significant operational signal from FY26. With H2 EBITDA of $6.3 million versus H1's $3.4 million and improving margins, the cost base reset implemented during the year began delivering measurable results. If this H2 Margin profile can be sustained into FY27, the annualised EBITDA run rate would be materially above the full-year FY26 result.

New contract wins provide near-term revenue visibility. The data and digital consulting contracts and mass transportation project wins in Australia and Canada reflect growing commercial traction for COSOL's AI and industrial mathematics strategy. These contracts are described as longer-term, higher-margin opportunities, which aligns with the company's stated goal of improving revenue quality.

The Leadership transition introduces a period of management change. Scott McGowan's transition from MD to Executive Director Strategy and Solutions provides continuity of strategic expertise, while Anthony Stokes' appointment as interim CEO reflects the board's decision to conduct a search for permanent leadership. The outcome of the CEO appointment will be important in establishing longer-term strategic direction.

Risks and What to Watch

Revenue recovery remains an ongoing challenge. With full-year revenue of $98.6 million — down 15.6% — the company has reduced its operating base below its FY25 level. While H2 margin improvement is encouraging, revenue growth in FY27 will be necessary to demonstrate that the business is expanding rather than contracting around a leaner cost structure.

The goodwill impairment of $6.5 million relating to asset management services and Australian consulting reflects a reassessment of the value of these parts of the business. This may indicate that these segments will not perform at previously projected levels, which could affect revenue expectations for these areas in FY27.

Management transition risk is present during the interim CEO period. The timing of the permanent CEO appointment and any strategic shifts associated with new leadership could affect the company's execution focus during the transition period.

Key Takeaways

COSOL reported full-year underlying EBITDA of $9.8 million with a meaningful H2 rebound to $6.3 million and improving operating margins of 31.2% in H2. Revenue of $98.6 million was lower than FY25, reflecting prior period challenges, but recent contract wins in data, digital, and mass transportation provide FY27 revenue pipeline. A goodwill impairment of $6.5 million was recorded. Concurrent leadership changes — with the MD transitioning roles and an interim CEO appointed — represent a period of governance transition. The company enters FY27 with an improving margin profile, new contract wins, and a focused strategy of securing higher-margin AI and industrial mathematics contracts.

FAQs

Q: What does COSOL Limited (ASX:COS) do?

A: COSOL provides enterprise asset management, digital consulting, data analytics, and AI-enabled solutions for asset-intensive industries including utilities, transport, oil and gas, water, and government, across Australia and Canada.

Q: How did COSOL perform in H2 FY26?

A: As reported on 19 August 2026, COSOL's H2 FY26 underlying EBITDA was $6.3 million compared with $3.4 million in H1, with operating margins improving to 31.2% in H2 from 28.8% in H1, reflecting the positive impact of the company's operating cost reset.

Q: What leadership changes did COSOL announce in FY26?

A: Managing Director Scott McGowan stepped down and assumed a new role as Executive Director Strategy and Solutions; CFO/COO Anthony Stokes was appointed interim CEO; and Chairman Geoff Lewis assumed an executive chairmanship role through the transition period while a permanent CEO search is conducted.

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