Coventry Group Q1 EBITDA Up 87% to $5.4m on Cost Cuts

Coventry Group (ASX:CYG) released a first-quarter trading update showing a third consecutive quarter of EBITDA improvement, which it attributes to a lower cost base and stronger gross margin, while its strategic review continues.

Unaudited Q1 FY27 Sales were $100.1m, up 1.3% on Q1 FY26, and Pre AASB16 EBITDA was $5.4m, up 87% from $2.9m, on a normalised basis before Significant Items and at constant currency. Gross margin improved by approximately 50 basis points to 42.0%, and operating costs were $1.5m (3.9%) lower, which the company links to its $10m cost-out program. Trade Distribution sales rose 6.9% to $62.5m, while Fluid Systems sales fell 6.9% to $37.6m, reflecting project timing and softer activity in some end markets. The gross leverage ratio has fallen from a peak of 10x at March 2026 to just under 5x at 30 September 2026. The NAB financing facility was recently extended by 12 months to August 2028, the Group is in compliance with its September 2026 quarter covenant obligations, and liquidity was $13.8m.

On a reported basis, Q1 EBITDA would be approximately $0.12m lower. The Board judged non-binding indicative offers for individual divisions not to represent appropriate value, the strategic review remains ongoing, and the release gives no FY27 earnings guidance.