Redox Ltd (ASX:RDX) Half Year 2026 Earnings Call Highlights: Strong Growth Amidst Global Challenges

GuruFocus News

Thu, February 19, 2026 at 4:00 PM GMT+9 3 min read

In this article:

RDX.AX

+9.02%

This article first appeared on GuruFocus.

**Revenue:** Increased 6.6% to $674 million.

**Gross Profit:** Rose 5.9% to $145 million.

**Gross Profit Margin:** Maintained at 21.5%.

**Conversion Margin:** 44.7%, benchmarking well against industry peers.

**Net Cash Position:** $145 million with zero net debt.

**Earnings Per Share (EPS):** 8.3%, up 8.9% against PCP.

**Return on Investor Capital:** Increased 0.5 percentage points to 14%.

**Interim Dividend:** 6.5% per share, with a payout ratio of 78% of NPAT.

**Cash Flow from Operations:** Increased $50.2 million to $62.2 million.

**Free Cash Flow Conversion:** Improved to 91.4%, up from 19.7% in 1H '25.

**Industrial Sales Growth:** Increased by 29% due to strong contributions from moleculars and North America.

**Operating Expenses:** Increased by $6 million to $85.8 million.

Warning! GuruFocus has detected 4 Warning Signs with ASX:RDX.

Is ASX:RDX fairly valued? Test your thesis with our free DCF calculator.

Release Date: February 19, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Redox Ltd (ASX:RDX) achieved a sales growth of 6.6% to $674 million, driven by acquisitions and strong performance in industrial and food segments, particularly in North America.

Gross profit increased by 5.9% to $145 million, with resilient gross profit margins at 21.5%, showcasing strong cost discipline.

The company maintained a healthy net cash position of $145 million with zero net debt, providing significant capital for strategic M&A opportunities.

Proforma earnings per share rose by 8.9% against the previous corresponding period, reflecting strong financial performance.

The board declared an interim dividend of 6.5% per share, maintaining a payout ratio within the target range of 60% to 80% of NPAT.

Negative Points

The human health and nutrition segment experienced a decline due to softened demand in New Zealand.

Underlying operating expenses increased by $6 million to $85.8 million, driven by volume-related expenses and higher administration costs.

The company faces challenges with tariffs in the USA, complicating competitive positioning and customer ordering behavior.

Despite a strong balance sheet, no recent acquisitions have been completed, partly due to high prices and the need for strategic fit.

Market conditions remain dynamic, with subdued global demand impacting overall growth potential.

Q & A Highlights

Q: Can you provide more details on the US business’s industry segments and the repeatability of its performance into the second half? A: Raimond Coneliano, CEO, explained that the US business is growing solidly, with significant contributions from industrial, personal care, and food segments. The business is expected to continue growing strongly, especially with potential M&A opportunities that could accelerate its maturity and stability.

Story continues  

Q: Are the trends from the first half in the US continuing into the second half? A: Raimond Coneliano, CEO, refrained from commenting on the last six weeks but expressed optimism about the US market’s potential. He highlighted a significant customer win in the de-icing product segment, indicating ongoing opportunities.

Q: What industry segments are you targeting for the next acquisition, and can we expect something soon? A: Raimond Coneliano, CEO, mentioned that they are diligently working through a full pipeline of M&A opportunities in the US. While he hopes to execute something within the next 12 months, the process requires careful cultural and strategic alignment.

Q: With prices stable in the first half, is there an expectation for increases in the second half due to inflation? A: Raimond Coneliano, CEO, noted that supply and demand dynamics, including plant closures in Europe and Asia, suggest upward pricing pressure. He believes prices are more likely to rise than fall.

Q: Why have there been no recent acquisitions despite a strong balance sheet, and have tariffs been an issue in the USA? A: Raimond Coneliano, CEO, emphasized a disciplined M&A approach, ensuring cultural and strategic fit. Tariffs have complicated the competitive positioning of targets in the US, but the company remains cautious and thorough in its evaluations.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Terms and Privacy Policy

Privacy Dashboard

More Info