Stealth's FY26 Half-Year Results Unveiled!

Testing the Scale-Up

Stealth Group Holdings runs a diversified Australian distribution operation spanning industrial maintenance, repair and operating supplies, safety gear, hardware and consumer technology products. Its industrial division serves trade professionals and businesses through brands including Heatleys and C&L Tool Centre while Force Technology wholesales mobile accessories to national retailers and telcos.

The full year to June 2025 delivered record performance: group sales rose 27.6% to $145.1 million, EBITDA climbed 62% to $9.9 million on margin expansion to 7.0%, and net profit after tax more than doubled to $3.1 million. The company also cut net debt 37% to $6.8 million while lifting cash holdings 42% to $14.4 million.

The half-year to December 2025 marks the first reporting period after two material shifts. On 10 November Stealth closed the $22 million acquisition of Hardware & Building Traders, instantly enlarging its network to serve roughly 2,300 stores and lifting combined annual purchasing power above $800 million. The deal, funded by an extension of existing bank facilities, prompted management to raise FY28 sales guidance above $500 million and lift margin targets.

Simultaneously the consumer side captured the iPhone 17 launch cycle. Pre-order commitments for aligned accessories hit $6 million in July, up 50% year-on-year, with the bulk of revenue recognised in the second quarter following the September global release. These orders were backed by retailer purchase guarantees and flowed through major channels including JB Hi-Fi and Vodafone.

The developments carry concrete stakes for a company with a market capitalisation around $200 million. Strong integration progress and sustained accessory momentum could validate the upgraded long-term outlook and support further rerating after an already sharp share-price rise on prior growth signals. Conversely, slower synergies or softer sell-through would highlight risks from the debt-funded deal and product-cycle dependence, potentially affecting supplier terms, retailer confidence and institutional holdings that have recently shifted.

Less obvious tensions lie in the dual-business model. Industrial distribution offers recurring, lower-volatility revenue from essential MRO items used daily by tradespeople and industry, while the consumer arm delivers higher-margin growth but tracks global smartphone launches and attachment rates. The acquisition consolidates a fragmented independent sector yet requires blending Perth-based operations with a national buying group; early cost or cultural friction could offset projected $8 million annual profit synergies by FY27. Broader market coverage often celebrates the headline expansion but underplays how Stealth's low-capital, high-cash-conversion approach had already strengthened its balance sheet before the latest outlay.