June, 2025
Website: http://bigriverindustries.com.au/
The technical picture for Big River has turned positive in recent months.
I asked A.I. if there were any signs of a turnaround occurring in this company, based on the most recent half-year report (released in February). This was the response I received:
From the report, here are the positive or potentially improving indicators worth noting:
✅ Sequential improvement in EBITDA vs the prior half
- The report states:
“EBITDA (before significant items) of $14.8m…down vs prior year but up 17.5% on 2HFY24 EBITDA, reflecting gains in gross profit and operational efficiencies.”
This suggests the worst of the earnings decline may have passed mid-2024.
✅ Gross margin improvement vs previous half
- Gross margin improved by 76 bps over 2HFY24, driven by:
- Better pricing discipline
- Supplier consolidation
- Improved sales mix
This indicates management is actively working on margin recovery.
✅ Revenue stabilisation
- 1H FY25 revenue rose 8% compared to 2HFY24, though still down year-over-year.
- That half-on-half recovery can be an early sign of market cycle bottoming, especially given exposure to construction materials.
✅ Positive cash flow despite net loss
- Operating cash flow was $9.1m positive despite the $17m accounting loss (driven mostly by the $20m impairment).
- This shows that underlying cash generation is intact, which can be critical for weathering downturns.
✅ No further asset sales or dilutive capital raisings disclosed
- No equity raising in this half year, and net debt remained stable.
✅ Management commentary signals stabilisation
- The report uses language like:
“…potentially indicating a level of market cycle stabilisation.”
While such language is somewhat promotional, it is consistent with the revenue/EBITDA sequential uptick.
Summary of potential turnaround signals:
- EBITDA and revenue improved compared to the preceding half.
- Gross margin is stabilising/improving.
- Cash flow remains positive.
- No immediate funding crisis evident.
- Management has taken non-cash impairment charges proactively.
Caution:
These are early, tentative signs. The structural risks remain significant:
- Debt is still high.
- The building materials cycle is volatile.
- Cash runway could shorten quickly if losses recur.
- Rebound is modest relative to the scale of the impairment.
Verdict:
Yes—there are signs that trading conditions may be stabilising, and the worst earnings pressure could be past. But it’s too early to say a sustained turnaround is underway. I would monitor the next 1–2 quarters very closely for:
- Continued gross margin improvements,
- Stable or rising EBITDA,
- Reduction in inventories and receivables,
- Confirmation of demand recovery.
Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.
Big River Industries: Turnaround Potential?