Highlights

  • VEEM (ASX:VEE) is expanding Manufacturing capacity to support marine, propulsion and defence-related opportunities.
  • The company completed a factory extension with additional production capability and new CNC equipment.
  • FY26 performance reflected challenges in the gyrostabiliser Business and timing of defence-related orders.
  • Future growth depends on product recovery, defence Demand and improved operational execution.

VEEM (ASX:VEE) continues to position itself for longer-term growth through its marine engineering and defence manufacturing capabilities. The Perth-based company produces specialised marine products including propulsion systems, propellers and gyrostabilisers, while also supplying solutions into defence-related markets.

The company has been navigating a challenging operating period while investing in additional manufacturing capacity and preparing for future opportunities across marine and defence sectors.

As on 4 September 2026, VEEM (ASX:VEE) was trading at AUD 0.52, down 1.90% on the day. The movement comes as investors continue assessing the company’s recent financial performance, factory expansion and future growth opportunities.

FY26 Performance

VEEM’s FY26 results reflected operational challenges, particularly within its gyrostabiliser business.

The company’s first-half FY26 results included a non-cash Impairment of approximately A$24.8 million against capitalised gyrostabiliser development costs. This contributed to a statutory first-half net loss of approximately A$19.2 million on Revenue of A$23.4 million.

For FY26, management highlighted revenue expectations of approximately A$50 million to A$52 million and EBITDA of approximately A$3.25 million to A$3.75 million, compared with revenue of around A$68.7 million in FY25.

The weaker performance was linked to delays and timing issues across certain business areas rather than a broad deterioration across all operations.

Manufacturing Expansion

A key strategic development for VEEM has been the expansion of its manufacturing facilities.

On 9 June 2026, the company announced a factory extension adding approximately 1,000 square metres of additional space, along with the installation of three new CNC machines expected to be commissioned through the first quarter of FY27.

The expansion was partly supported by a A$1 million Defence Industry grant and is aimed at increasing manufacturing capacity across the company’s product portfolio.

The additional capability is expected to support future demand from marine customers and defence-related programs while improving production flexibility.

Business Operations

VEEM operates across four key areas:

  • Propulsion: Manufacturing specialised marine propellers and propulsion systems.
  • Engineering: Providing advanced manufacturing and engineering solutions.
  • Defence: Supporting defence-related marine requirements.
  • Gyrostabilisers: Developing stabilisation technology for marine applications.

The FY26 challenges were concentrated mainly within the gyrostabiliser division, where customers delayed purchasing decisions ahead of the upgraded Mark III product launch.

Defence revenue was also affected by the timing of Australian Submarine Corporation-related orders, although management indicated this reflected timing rather than a loss of demand.

Meanwhile, propulsion and engineering operations provided more stable contributions.

Investor Considerations

VEEM’s Investment case is linked to its ability to convert manufacturing capability and defence exposure into renewed growth.

The company benefits from operating in specialised industrial markets where technical expertise and long-term customer relationships can create competitive advantages.

However, the recent period highlighted execution challenges, particularly around product development timelines and customer adoption.

The gyrostabiliser business remains an important area to monitor, with the success of the Mark III product expected to influence future revenue recovery.

The company has also undergone Leadership changes, with managing director Mark Miocevich taking on additional responsibilities following the departure of chief executive Trevor Raman.

Investors will continue monitoring operational execution, cash generation, defence order activity and the company’s ability to restore revenue growth.

Growth Outlook

Future catalysts for VEEM (ASX:VEE) include the commercial ramp-up of the Mark III gyrostabiliser, commissioning of new manufacturing equipment and progress across defence-related programs.

The company’s expanded factory footprint provides additional capacity to support potential growth opportunities, particularly as defence spending and marine infrastructure investment remain areas of focus.

Further customer deliveries, including propulsion projects such as the VEEM Extreme range, will also provide insight into demand conditions.

The company’s FY27 performance will be important in determining whether recent investments translate into stronger financial outcomes.

Conclusion

VEEM (ASX:VEE) is entering FY27 with expanded manufacturing capacity, a refreshed leadership structure and continued exposure to marine and defence markets.

While FY26 presented challenges, particularly within the gyrostabiliser division, the company has taken steps to strengthen its operational foundation and prepare for future demand.

The key focus ahead will be whether improved manufacturing capability, product development and defence opportunities can translate into sustainable growth.