PWR Holdings has reported PWR Holdings H1 Earnings Growth of 38.6%, with statutory net profit after tax reaching $5.7 million for the six months ended 31 December 2025. The result reflects strong execution across Motorsport and Aerospace & Defence divisions, coupled with early operating leverage from the company’s newly commissioned Stapylton manufacturing facility.
PWR Holdings delivers 38.6% profit surge as Stapylton facility goes live
The advanced cooling systems manufacturer reported revenue growth of 27.8% to $80.4 million, driven by higher volumes across its Motorsport and Aerospace & Defence market sectors. EBITDA expanded 47.6% to $16.2 million, demonstrating margin improvement as the business transitions from its investment phase to earnings realisation.
Net profit after tax margin improved to 7.1%, up 0.6 percentage points from the prior corresponding period. Earnings per share grew 38.7% to 5.6 cents, whilst cash conversion exceeded 100%, supporting strategic reinvestment across the business.
Management noted the first half result proved stronger than initially expected, with greater revenue recognised in the second quarter that had been anticipated to occur in the third quarter. The company declared an interim fully franked dividend of 3.0 cents per share, representing 50% growth on the prior period.
| Metric (A$m unless stated) | H1 FY26 | H1 FY25 | Variance |
|---|---|---|---|
| Revenue | $80.4 | $62.9 | +27.8% |
| EBITDA | $16.2 | $11.0 | +47.6% |
| NPAT | $5.7 | $4.1 | +38.6% |
| NPAT Margin | 7.1% | 6.5% | +0.6% |
| EPS (cents) | 5.6c | 4.1c | +38.7% |
| Interim Dividend (cents) | 3.0c | 2.0c | +50.0% |
The EBITDA expansion of 47.6% exceeded revenue growth, reflecting improved operating leverage from the new Stapylton facility despite one-off factory costs totalling $0.8 million related to generator power and relocation expenses.
Motorsport and Aerospace divisions power record revenue
PWR’s Motorsport division delivered 40% revenue growth during the period, supported by broader category adoption of the company’s proprietary core constructions. The increase reflects customer demand for improved packaging efficiency and aerodynamic performance across leading categories.
Growth was driven by the new Formula 1 regulation cycle, with race testing commencing earlier than the prior period. The F1 regulation changes contain technical complexity of unprecedented scope, impacting both power units and chassis cooling systems. The result was also supported by hybrid and electric platforms, including the World Endurance Championship, Formula E and Offroad categories.
Aerospace & Defence revenue grew 31%, driven by Defence, Commercial Aerospace (including electric vertical take-off and landing platforms) and the developing maintenance, repair and overhaul market. The result reflects a stronger second quarter, with revenue recognition on delivery of approximately 75% of the US Government project announced in January 2025. Production on this order occurred across both quarters, with the remainder scheduled for delivery in the third quarter.
OEM revenue increased 18.8% in the period, reflecting maturity of production programmes. Performance in the first half was supported by maturing programmes advancing into production phases, expected to underpin broadly stable revenue in the second half.
Defence pipeline matures with repeat orders
PWR has progressed from an approved supplier to 11 aerospace and defence organisations in FY21 to 51 in the first half of FY26. The company is now an approved supplier to all major defence primes, reflecting successful qualification against stringent requirements and continued execution across complex programmes.
The repeat US Government order of US$9.1 million, announced in January 2026, reinforces PWR’s execution capability and reliability in this market. Key developments include:
- Approved supplier relationships expanded from 11 (FY21) to 51 (H1 FY26)
- Qualified with all major defence prime contractors
- First follow-on US Government contract secured, validating execution standards
- Increased programme activity and customer diversification strengthening order book quality
The new Stapylton facility has been configured to support long-term aerospace and defence growth, providing capacity and operational capability aligned to increasing programme complexity and customer demand.
What is operating leverage and why it matters for PWR
Operating leverage describes the phenomenon where profit grows faster than revenue when a business has high fixed costs. For PWR, the newly commissioned Stapylton facility represents a significant fixed cost that increases manufacturing capacity without proportional increases in operating expenses.
This dynamic explains why PWR’s 27.8% revenue growth translated to 47.6% EBITDA growth and 38.6% profit growth in the first half. As factory utilisation increases, each additional dollar of revenue generates higher incremental profit margins.
The first half included one-off costs of approximately $0.8 million related to generator power and relocation expenses, which will not recur in future periods. Additional one-off costs of approximately $1.2 million related to the Australian factory relocation and CEO search process also impacted margins.
Management expects operating leverage to continue driving margin expansion as production volumes increase, with NPAT margins trending back toward FY24 levels over a three-to-five-year period.
Stapylton facility positions PWR for structural growth
PWR completed the transition to its new Stapylton headquarters in February 2026, with the project delivered in line with budget. AS9100 (Aerospace Standard 9100) and NADCAP (National Aerospace and Defence Contractors Accreditation Programme) recertification were successfully completed following the site relocation.
These certifications underpin PWR’s ability to secure and deliver aerospace and defence contracts. The Australian factory is now scaled to support long-term demand requirements and is aligned to increasing programme complexity and next-generation platform requirements.
Chairman Kees Weel
“The successful transition to the Stapylton facility is a significant milestone for PWR, and I acknowledge the team for delivering the project on time and within budget while maintaining operational continuity. The new facility strengthens our vertically integrated global manufacturing platform and supports long-term growth across our key markets.”
Capital expenditure of $12.7 million was incurred in the first half, with full-year capex forecast at approximately $22.5 million. This reflects investment in the Stapylton factory upgrade, expansion of US aerospace and defence capabilities, and increased materials and technology capability to support growing demand.
During the period, the company progressed US accreditations and expanded production capability for aerospace and defence products. Targeted capacity and capability investment in the UK and US further enhances operational flexibility within the company’s vertically integrated global manufacturing platform.
Net debt stood at $13.4 million at period end, with the group’s focus in the second half to continue deleveraging.
Management outlines pathway to margin recovery
The company expects modest NPAT margin improvement in FY26, with higher volumes supporting improved operating leverage and early productivity gains. This will be partly offset by investment in US cyber accreditation (CMMC 2.0), estimated at approximately $0.8 million ongoing from the second half.
Over the medium term, strategic investment in capacity, capability and accreditations underpins growth, with margins expected to trend back toward FY24 levels over a three-to-five-year period, driven by improving operating leverage.
Management provided segment-specific guidance for the remainder of FY26 and into FY27:
- Motorsport: Strong but moderating H2 revenue growth on a constant currency basis. Based on the current pipeline, FY27 is expected to be in line with elevated regulation-driven FY26 revenue
- Aerospace & Defence: Continued momentum expected to support a broadly even first half/second half revenue split. FY27 revenue supported by follow-on US Government order, with aggregate growth dependent on timing of pipeline conversion
- OEM: Medium-long term pipeline rebuilding momentum. FY26 first half/second half revenue split expected to be broadly even, with modest growth expected in FY27
- Aftermarket: Muted FY26 growth expected due to continued reshaping of sales mix towards higher value/higher volume programmes
The one-off costs of approximately $1.2 million incurred in the first half related to the Australian factory relocation and CEO search process will not recur in the second half.
Balance sheet strength supports growth and shareholder returns
PWR’s balance sheet remains strong, with net debt of $13.4 million and material capacity to fund future growth. Cash conversion exceeded 100% for the rolling 12 months ended 31 December 2025, with increased operating cash flow partly reinvested in working capital to support growth.
The interim fully franked dividend of 3.0 cents per share represents 50% growth on the prior corresponding period, signalling management confidence in earnings sustainability.
Acting CEO Matthew Bryson
“This result reflects strong revenue performance across Motorsports and Aerospace & Defence, together with the early operating leverage from our new, purpose-built Stapylton facility. The move to a significantly larger and more advanced manufacturing platform is a structural step-change for the business, positioning PWR to capture further growth in these key market sectors whilst strengthening our position in technically complex, niche advanced cooling markets.”
Strong cash conversion demonstrates earnings quality, with operating cash flow supporting both strategic reinvestment and shareholder returns. The group’s focus in the second half is to continue deleveraging whilst maintaining investment in growth initiatives including US cyber accreditation requirements.
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