Enero Group delivers 9% EBITDA growth and 54% jump in adjusted net profit for FY26
In its FY26 full-year results presentation dated 21 August 2026, Enero Group reported that continuing operations delivered stronger profitability despite a decline in revenue, with cost discipline converting a softer top line into meaningful earnings growth.
The marketing and communications group recorded EBITDA up 9% to $15.3m (FY25: $14.1m) and adjusted net profit after tax up 54% to $6.4m (FY25: $4.2m). Adjusted earnings per share also rose 54% to 7.0 cents.
Net revenue eased 7% to $129.5m, while the group’s EBITDA margin expanded 1.6 percentage points to 11.8%. The company reported a statutory net loss of $37.4m, driven predominantly by a non-cash impairment addressed later in this coverage.
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Margin expansion drives the profit story
Management attributed the improved profitability to disciplined cost management and operational excellence across FY26, which offset the revenue decline stemming from challenging international technology market conditions and the ongoing transformation at Hotwire Global.
Record performance from the Australian agencies, combined with corporate cost reduction, lifted margins across the board. Key drivers included:
- Group EBITDA margin improved from 10.2% to 11.8% (+1.6ppts)
- THC Practice EBITDA margin rose from 16.5% to 17.2%
- Corporate costs fell 16% year-on-year, now representing 4.9% of revenue (excluding share-based payments)
- On a constant currency basis, EBITDA grew 11%
The effective tax rate improved to 24% (FY25: 39%), benefiting from the release of prior years’ tax provision in the US. This tax benefit supported the profit result rather than reflecting operational earnings, with the effective rate at 35% excluding the impact of prior year adjustments, unrecognised tax losses, and no deductions on share-based payments.
The following table summarises segment revenue, EBITDA, and margin performance across the group’s operating agencies.
| Agency | FY26 Revenue | FY26 EBITDA | FY26 Margin | YoY EBITDA % |
|---|---|---|---|---|
| Hotwire Global | $63.3m | $7.4m | 11.6% | -33% |
| BMF | $38.0m | $8.8m | 23.2% | +27% |
| Orchard | $28.2m | $6.1m | 21.8% | +25% |
| THC Practice (total) | $129.5m | $22.3m | 17.2% | -3% |
Australian agencies hit records as Hotwire transformation continues
BMF: Record EBITDA of $8.8m
BMF delivered record EBITDA of $8.8m, with its margin expanding from 20.1% to 23.2% on revenue growth of 11%. Calendar 2025 wins underpinned the strong result.
Client relationships with Westpac and Endeavour concluded in April 2026 and June 2026 respectively, with new wins from Asahi and Superloop at the end of FY26 partly offsetting these transitions. During the year, BMF won the Global Grand Effie for ALDI Australia’s “Shop ALDI First” campaign and was named Creative Agency of the Year at the AdNews Awards.
Orchard: Record revenue and EBITDA
Orchard achieved record revenue of $28.2m and record EBITDA of $6.1m, delivering a margin of 21.8%. The agency’s healthcare vertical continued to perform strongly, acting as agency-of-record for Lilly’s GLP-1 portfolio in Australia and New Zealand.
Geographic expansion followed with Merck in the US and Lilly in New Zealand, contributing to healthcare’s share of practice revenue growing from 11% to 14%.
Hotwire: Double-digit margins held through transformation
Hotwire Global saw revenue fall 19% to $63.3m and EBITDA decline 33%, which the company attributed to persistent softness in the technology sector, AI-driven changes in client spending behaviour, and a strong Australian dollar in the second half.
On a more constructive note, costs were reduced 15% in constant currency, and the agency’s margin improved from 10.8% in H1 to 12.6% in H2. Hotwire maintained a double-digit EBITDA margin throughout the transformation.
Collectively, the strength of the Australian agencies is helping offset international headwinds.
How AI is reshaping the agency model, and why it matters
For a marketing and communications group, artificial intelligence presents both a challenge and an opportunity. On one side, clients can insource work traditionally handled by agencies, and the technology sector, a major revenue source, has become more volatile. On the other, AI compresses delivery times and opens new product lines.
Agencies have historically billed based on labour and time. As AI reduces the hours required to deliver work, the strategic focus shifts towards protecting margins and building new revenue streams. Enero reported tangible results across its agencies:
- Hotwire’s AI Lab generated revenue 3x higher in Q4 versus Q1, with win rates 30% higher in the US when AI Lab products were included.
- BMF’s proprietary AI operating system, “Noggin,” delivered 31% faster end-to-end retail production and was launched agency-wide in August 2026.
- Orchard’s “Agentic by Default” model delivered 43% faster delivery on its first AI-led client, with “audienceIQ” launched as a client offering in August 2026.
These results suggest AI is transitioning from a cost centre into a commercial revenue driver for the group.
Balance sheet strength and the impairment explained
Non-cash impairment behind the statutory loss
The statutory net loss of $37.4m was driven predominantly by a non-cash impairment loss and intangible write-down of $39.8m ($38.6m net of tax), relating to goodwill and brand name. The company noted this was largely driven by the near-term performance of ROI·DNA.
Because the charge is non-cash in nature, it does not affect operating cash flow or the group’s cash position.
Robust cash and zero leverage
Enero ended the period with closing cash of $28.1m and net cash of $24.5m. The group reported zero leverage, with a Net Debt/EBITDA ratio of 0.0x.
Of its $15m bank facility, $11.4m remained undrawn at June 2026, with the facility extended until October 2028. Free cash flow was $1.1m. Cash conversion (based on gross cash flow) was 62% of EBITDA.
Dividend and the road ahead for FY27
The company declared a final dividend of 1.4 cents per share fully franked, representing a payout ratio of 31% on adjusted EPS. Enero is targeting dividend payments consistent with its historical payout ratio of 30% to 50% of adjusted earnings per share.
For FY27, management outlined the following planning assumptions:
- ROI·DNA: an expected revenue reduction of 30 to 50% for FY27 versus the FY26 H2 average run rate, as clients insource work through AI adoption. The business will be further integrated with Hotwire to deliver a “materially lower cost base.”
- Hotwire: an FY27 revenue planning assumption of 5 to 15% below the FY26 H2 average run rate.
- BMF: an FY27 revenue planning assumption of approximately 10 to 15% below the FY26 H2 average run rate, with margins expected to improve through the year and a full-service Melbourne capability to be built out during H1.
- Orchard: positive momentum expected to continue into FY27.
The outlook reflects management positioning the group for AI-driven revenue pressure while building a leaner cost base intended to protect and optimise EBITDA.
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