COSOL Limited reported a 15.6% decline in full-year revenue to $98.6 million for FY26, as underlying earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $9.8 million from $16.8 million in FY25. The Brisbane-based enterprise asset management and digital consulting firm attributed the results to a challenging operating environment, with shares falling 12.77% to $0.205 on Tuesday.
The company recorded a statutory net loss of $4.0 million, compared with a $7.9 million profit in FY25, as goodwill impairments totalled $6.5 million, including $4.0 million related to Asset Management Services and $2.5 million for Australian Data and Digital Consulting. Underlying net profit after tax and amortisation (NPATA) declined to $5.2 million from $9.9 million, while underlying earnings per share fell to 1.83 cents from 4.78 cents.
Second-half performance showed signs of recovery, with H2 underlying EBITDA rising to $6.3 million from $3.5 million in H1, lifting the EBITDA margin to 12.8% from 7.1%. Gross margins improved to 37.9% in H2, a 340 basis-point increase over the first half, though the full-year gross margin declined to 30.0% from 31.8% in FY25. Revenue was broadly flat in H2 at $48.9 million versus $49.6 million in H1.
Cost-cutting measures contributed to a 2.5% reduction in operating costs to $19.8 million, part of a targeted cost-out program aiming for $1 million in annual savings. Cash conversion improved to 107.7% from 85.1%, while net debt decreased to $20.0 million from $26.6 million, driven by repayments to Westpac and a renegotiated $2.0 million deferred consideration payment to Toustone due in February 2027. Available borrowing capacity stood at $11.0 million, with net debt leverage rising to 2.05x from 1.59x.
Segment performance highlighted ongoing pressures in Asset Management Services, which contributed 31.2% of revenue at $30.7 million but saw gross margins compress to 16.2%, down 370 basis points year-over-year. Data and Digital Consulting, the larger segment at $67.8 million, maintained a gross margin of 36.2%, though this was 210 basis points lower than the prior year. Within this segment, product-led services revenue rose to $17.3 million with a 40.1% margin, while managed services fell to $21.7 million with a 40.8% margin. Advisory and consulting revenue declined to $28.9 million, though H2 margins recovered to 32.4%.
COSOL’s consulting revenue was distributed across transport and infrastructure (33.6%), natural resources (32.3%), and energy and water (23.3%). IBM-related revenue accounted for 25% of FY26 performance and is expected to grow to approximately 45% of FY27 revenue. The company appointed a new sales leader in May 2026 and has hired six additional staff over four months as part of its turnaround strategy.
Interim CEO Anthony Stokes described FY26 as "the year of the cost reset" and FY27 as "the year of profitable organic growth," acknowledging execution shortfalls. Executive Chairman Geoff Lewis stated that recent results "have not been acceptable" and that new initiatives were required to restore growth. COSOL plans to provide H1 FY27 earnings guidance at its Annual General Meeting in November 2026.
