Capral (ASX:CAA) CEO and Managing Director Tony Dragicevich told investors the company delivered a “very pleasing result in a soft market” in its 2025 full-year earnings presentation, citing earnings that were ahead of the prior year and in line with guidance despite weaker residential and industrial conditions.
Dragicevich said lower volumes were offset by higher metal prices and an improved sales mix, while margins held up due to cost management. He also pointed to record safety performance and continued capital management through dividends and a share buyback.
Business backdrop: subdued housing and softer industrial demand
In 2025, overall volume was 65,000 tonnes, down 4% from the prior year. Dragicevich attributed the decline mainly to continued weakness in residential building and a slowdown across parts of the industrial sector, including transport and infrastructure projects. He also said imports of fully fabricated windows are increasingly affecting the market, expanding from high-rise projects into low-rise segments.
Capral said its diversification helped support volumes during cyclical downturns. Dragicevich noted the company’s residential exposure has reduced to around 40% of total volume, with industrial now around 50% and the balance in commercial construction.
FY2025 financial performance and key drivers
Capral reported underlying EBIT of A$35.8 million, up 4% year-over-year, and underlying EBITDA of A$59.6 million, up 2%. Sales revenue rose 6% to just under A$690 million, driven primarily by higher average LME prices and a favorable product mix, partially offset by lower volumes.
Dragicevich outlined the company’s “EBIT bridge,” describing the main moving parts as:
- Volume impact: negative A$3.8 million
- Price and mix: positive A$6.8 million
- Inflation: negative just over A$5 million
- Cost savings and other initiatives: positive A$3.5 million
Statutory net profit after tax was A$35.6 million. Dragicevich said the statutory result included a A$3 million benefit from a long-standing insurance claim and a A$2.5 million tax benefit from the recognition of future year tax losses. He added that significant items totaled A$2.3 million, primarily the insurance benefit offset partly by LME revaluation effects, resulting in statutory EBIT of A$38.1 million.
Earnings per share were A$2.15, with underlying EPS of A$2.00, which Dragicevich said was up 19%.
Balance sheet, cash flow, and capital returns
Capral ended the year with net cash of just over A$60 million and said its balance sheet remained strong. Net tangible assets per share increased 13% to A$12.72, which Dragicevich attributed to retained earnings and buybacks.
Inventory increased by just over A$20 million, which management said reflected higher metal prices and increased goods in transit rather than a structural stock build. Receivables were “well controlled,” with days sales outstanding of 45 days at year-end.
Operating cash flow was just under A$44 million, despite an A$11.6 million working capital outflow driven by higher metal pricing. Capital expenditure totaled A$11.8 million and was focused on plant reliability, automation and productivity. Free cash flow was A$10.2 million after lease principal repayments.
On capital management, Dragicevich said the company targets cash distributions of 40% to 60% of underlying earnings over time, with flexibility between dividends and buybacks. In FY2025, Capral declared a A$0.30 per share unfranked final dividend and reported total cash distributions of A$0.85 per share for the year, up 12% from the prior period and representing 43% of underlying EPS. The company also executed a share buyback equivalent to A$0.55 per share, repurchasing just over 859,000 shares at an average price of A$10.68, which management said was below NTA and accretive.
Strategy: manufacturing upgrades, distribution growth, and trade measures
Dragicevich said the company remains focused on increasing return on invested capital, strengthening its competitive position, and expanding its distribution footprint. He highlighted completion of the second stage of the Penrith plant rebuild in 2025, including replacement of the billet furnace and saw, with further upgrades in material handling, aging and packing planned progressively.
For 2026, Capral outlined major upgrades, including a press upgrade at Canning Vale in Western Australia and the installation of a new log furnace on the B1 press at Bremer Park. The company said it plans to install the Southern Hemisphere’s first electric log furnace in early 2027, supported by ARENA funding covering 50% of the roughly A$7 million cost. Management said the project is expected to improve productivity and lower emissions compared to gas-fired alternatives.
In distribution, Capral noted it launched a new residential framing system in 2024, followed by a thermally broken variant in the first half of 2025. Dragicevich also discussed the acquisition of Comsupply in Western Australia, describing it as an approximately A$15 million revenue aluminium and hardware distribution business acquired for around A$6 million and “less than four times earnings.” Capral said it expects Comsupply to contribute for a full year in 2026 and indicated it plans to expand the model to the East Coast over time.
On trade, Dragicevich said imports represent over a third of the Australian extrusion market, making anti-dumping measures important for “fair competition.” He noted anti-dumping measures against China were extended for a further five years, while measures involving Malaysia and Vietnam are under review. He also highlighted an anti-dumping case initiated by the Australian Glass and Window Association and a large window fabricator regarding fully fabricated imported windows and doors, saying the case had received more than 430 letters of support and would take most of the year to progress.
Outlook and guidance
Management said residential demand remains subdued and industrial demand has softened, but the company expects a recovery weighted to the second half of 2026. Dragicevich cited forecasts for housing starts to lift in 2026 and said Capral’s demand typically lags commencements by at least two quarters, with improvement expected to flow through from mid-2026.
For guidance, Capral said it expects first-half earnings to be broadly in line with the prior period, and—assuming markets perform as expected—full-year earnings to finish “slightly above” last year on improving second-half demand.
During Q&A, Dragicevich said the company expects gross margin support from its growing distribution mix to continue, but noted that a housing recovery could lift volumes from large residential window fabricators that tend to be lower-margin customers. He also attributed improved safety performance in part to automating the company’s integrated management system and increasing leadership safety walks, and said the electric furnace project is currently expected to be cost-neutral on energy versus gas, with improved efficiency reducing total energy use.
About Capral (ASX:CAA)
Capral Limited manufactures, markets, and distributes fabricated and semi-fabricated aluminum related products in Australia. The company offers windows, doors, framing systems, curtain walls, window and door hardware, showers and robes, fencing products, sunshades and fixed louvres, Qubelok light fabrication products, cladding products, seating products, scaffolding products, and balustrading products. It also provides extrusion products, sheets, plates, coils, and treadplates. The company offers its products under the Urban, Urban Plus, Artisan, Futureline, AGS Commercial, Caprio, Caprice, Ventus, Envy, Elegance, AB Pivot, Magic Touch, Lumière, Amplimesh, Aquago, Qubelok, Quiklok, and CA55 brands.
