Trajan Group (ASX:TRJ) reaffirmed its full-year FY26 guidance after reporting first-half results that management said were shaped by a weak first quarter, followed by a “record” second quarter that helped restore confidence in the company’s outlook.
Speaking on the investor webinar for the six months ended Dec. 31, 2025, CEO Steven stated the company was “yet again” reconfirming guidance, which he said implies “another record year” for group revenue. Trajan maintained its expectation for revenue of more than AUD 170 million and normalized EBITDA above AUD 16 million for FY26, guidance first provided in August and reiterated at the October AGM and in a trading update three weeks before the call.
H1 results and the Q1/Q2 split
Steven emphasized the contrast between quarters. In the first quarter, the company saw a slowdown in capital equipment orders—referencing a prior disclosure that capital equipment revenue was down around 20% in that period—along with tariff-related timing headwinds. He also said the company chose to make investments that weighed on short-term margins, including building “in-region, for-region” manufacturing and increasing inventory to improve delivery performance, particularly in consumables.
By the second quarter, management said performance improved. Steven described Q2 as a record quarter with revenue of “over AUD 45 million,” and said that momentum continued into the second half.
Guidance reaffirmed; H2 expectations outlined
Trajan reiterated guidance of in excess of AUD 170 million in revenue and in excess of AUD 16 million in normalized EBITDA for FY26. Alister quantified the company’s outlook more specifically, guiding to full-year revenue of AUD 172.6 million, with AUD 88.5 million expected in the second half.
Steven also walked through what he called a “bridge” from the first-half result to the full-year EBITDA target, citing several contributors expected in H2:
- Revenue and margin contribution based on the Q2 run rate (with some expected moderation) to deliver around AUD 8.6 million in H2.
- Cost reductions enabled by Project Neptune adding about AUD 0.8 million.
- Pricing actions implemented effective Jan. 1, contributing around AUD 1.3 million as they flow through.
- Reduced reliance on sourced component materials, adding about AUD 0.3 million, expected to play out in Q4.
In response to a question about confidence in the outlook amid macro volatility, Steven said the company remained confident, but added it was “not without risk,” pointing to currency volatility and broader macroeconomic uncertainty. He cited a healthy capital equipment order book and steady monthly demand trends across consumables as key supports for the forecast.
Segment performance: consumables growth, capital equipment softness, disruptive tech uplift
In components and consumables, net revenue rose 6.1%, or AUD 3.0 million, to AUD 51.9 million. Alister said customer connectivity remained strong, with the two largest product groupings growing 9% year over year, while other groupings were mixed. Pro forma gross margin in the segment fell to 37.5%, down 3.7 points, with impacts including AUD 0.4 million of higher freight costs tied to the “in-region for-region” buildout and AUD 0.4 million from tariff recovery timing differences. Segment normalized EBITDA declined AUD 1.1 million to AUD 15.2 million.
Capital equipment net revenue was AUD 29.1 million, down 2.7% (about AUD 0.8 million) year over year, reflecting softer market conditions in Q1. Alister said customer activity was picking up, “especially in the EU,” and noted EU regulatory changes could create future opportunities, citing more stringent olive oil quality monitoring as an example. The capital equipment order book grew AUD 2.8 million in the first half to AUD 10.8 million entering H2. Segment normalized EBITDA fell AUD 0.8 million to AUD 4.8 million.
In disruptive technologies, revenue increased 40.2% to AUD 3.1 million. Alister said microsampling tool sales generated a pro forma gross margin of 70%, though this was offset by lower margins in other early-stage commercialization activities. He also said the company continued to invest in its Versiti system, with expected full-year investment of AUD 1.1 million, and that installed systems in the U.S. and Australia were generating customer feedback.
Margins, tariffs, and Project Neptune
At the group level, pro forma gross margin decreased by 2.3 points (or AUD 0.7 million) in the half. Alister attributed the decline to difficult trading conditions in Q1 across components and consumables and capital equipment. In addition to margin pressure, the company recorded a AUD 1.3 million expense difference from revaluation of net trading assets due to exchange rate changes, and a net increase in G&A costs of AUD 0.8 million.
Steven said Project Neptune—focused on relocating labor-intensive processes to Penang and improving productivity via automation—was moving into a phase where cost savings should begin to flow more meaningfully. He said the company had started to “accelerate the cost reductions” in November and December and expected savings to build in the second half. He also said further margin improvement is expected as Trajan reduces certain purchased components, while ensuring no negative impact on analytical performance or customers.
On tariffs, Steven said the company’s mitigation strategy is to enable “different countries of origin across single product families as required,” acknowledging it can add cost compared with centralized global manufacturing but arguing it provides protection in an unpredictable trade environment. He said Trajan expanded capability in Austin, Texas, and developed manufacturing in Penang to serve China-based customers that previously would have been supplied from the U.S.
Cash flow, inventory, and net debt
Alister said lower normalized EBITDA resulted in lower normalized operating and free cash flow. The company increased investment in working capital during the half, including changes in receivables and payables. Inventory peaked in Q2 at AUD 33.4 million before declining to AUD 30.0 million in December, which Alister said is expected to convert to cash in Q3. He said the inventory build was intended to improve responsiveness during the seasonal end-of-year period, particularly in components and consumables.
To fund the inventory build, Trajan tapped available debt facilities, and net debt increased AUD 2.7 million in the half to AUD 32.2 million. In Q&A, Alister said receivables decreased by AUD 2.8 million due to collections and timing of larger receipts from capital equipment customers.
About Trajan Group (ASX:TRJ)
Trajan Group Holdings Limited develops, manufactures, sells, and distributes analytical and life science products and devices in Australia, New Zealand, Malaysia, Japan, the United States, Europe, the Middle East, Africa, and India. The company offers analytical products, including syringes, GC columns and septa, rings, inlet liners, and tubing products; pathology products, consisting of NBF containers, adhesive and frosted microscope slides, coverslips, slide storage trays/mailers, cassette storage boxes, biopsy pads, histology wax plus, microtome blades, and marking dyes and sets, and MiPlatform, a smartphone adapter.
