Beacon Lighting Group (ASX:BLX) executives told investors the company made “solid progress” in the first half of fiscal 2026 as Trade momentum offset softer retail sentiment, with management reiterating that its 2030 strategy remains on track.
Executive Chairman Ian Robinson said Trade again delivered strong outcomes, supported by customer partnerships and the group’s value proposition, while Retail experienced a softening in consumer sentiment following shifts in interest rate expectations that led to more cautious spending and “trading down” in some categories. Despite that backdrop, Robinson said the business remained resilient.
Half-year results: sales growth with modest profit pressure
On an underlying basis—which management used as the main reference point—sales increased 3.4% to AUD 176.3 million, gross profit rose to AUD 121.9 million, and gross margin remained at 69.1%. Other income increased 7.4%, which management attributed largely to interest on the group’s cash balance and income from property assets. Operating expenses increased 4.3% (42.8% of sales), leading to underlying EBITDA of AUD 47.9 million (up 1.2%) and an EBITDA margin of 27.2%. Underlying NPAT was AUD 17.2 million, down 2.1% year over year.
Store network investment and operational actions
Management said the group continued to invest in its store network, opening four new stores in Auburn, St Kilda, Millers Junction, and Geelong during the half. The St Kilda store was acquired from a franchisee into company ownership, while the Geelong store was relocated to a “significantly larger and more prominent site.”
Robinson said comparable sales improved in the second quarter after softness in August and September, which coincided with Reserve Bank of Australia commentary on potential interest rate increases. Beacon also undertook restructures across Beacon Lighting USA, the installations team, and the group support center, and changed the Beacon Trade rebate structure, which management said was intended to simplify the business, improve customer experience, and reduce costs.
Beacon also highlighted product development activity during the half, saying it designed and developed 448 new products across lighting, ceiling fans, and electrical accessories.
Trade strength and e-commerce growth
Chief Financial Officer David Speirs said company store comparative sales increased 0.4%, with the strongest performance in Q2 versus Q1. Queensland and Western Australia were cited as the best-performing states on a comparative basis.
Trade remained a key driver. Management reported in-store Trade sales growth of 12.6%, while online Trade sales rose 14.5%. In the strategic update, the company said Trade now represents 41.7% of relevant sales, which it described as progress toward an ambition of 50% by fiscal 2028.
E-commerce also continued to expand as a channel, with online sales representing 13.1% of store sales, supported by improved traffic and conversion across beaconlighting.com.au and beacontrade.com.au. The company said online Trade now accounts for 15.1% of direct Trade sales. Management also outlined service capabilities including same-day delivery in major metropolitan areas and one-hour click-and-collect, and said a major website re-platforming is underway with new sites expected to launch in fiscal 2027.
Margins, expenses, cash flow, and balance sheet
Speirs said gross profit dollars rose 3.6% to AUD 121.9 million and noted the sales mix shift toward Trade can impact gross margin, although Beacon’s vertically integrated model and ongoing product refresh helped maintain the 69.1% margin. He said Beacon aims to refresh about 20% of core products annually.
In the Q&A, management said increased cable sales were a key driver of slight margin pressure, describing cable as a commodity product used to bring electricians into stores and support cross-selling into higher-value items such as ceiling fans and downlights. The CEO added foreign exchange could be supportive in the second half, but the group is also seeing potential supplier price increases and higher copper costs, which could flow through into higher prices.
On costs, Speirs pointed to inflationary pressure in some operating expenses and said expense management remains a focus. Beacon increased marketing investment by 3.7% and general administration expenses rose 2.3%. Selling and distribution expenses increased 4.8% due to new store openings, relocations, and refurbishments, while depreciation rose 2.9% and finance costs increased 2.6%.
Beacon reported net operating cash flow of AUD 27.8 million for the half. Capital expenditure totaled AUD 6.4 million, and the group invested AUD 3.3 million into the Large Format Property Fund. It paid AUD 6.9 million in dividends during the period.
At December 2025, Beacon ended with AUD 54.5 million in cash and term deposits (AUD 44.5 million cash and a AUD 10 million term deposit). Inventory increased to AUD 101.2 million leading into Chinese New Year, and the investment in the Large Format Property Fund rose to AUD 29.1 million. Speirs said borrowings increased but the group maintained a strong net cash position.
Dividend update and outlook
The board suspended the dividend reinvestment plan and declared a fully franked interim dividend of AUD 0.041 per share, consistent with last year. The record date is March 6 and payment date is March 27. Management said the annual dividend payout ratio is expected to be 50% to 60% of NPAT going forward.
Looking ahead, management said Retail sales have moderated slightly from first-half levels, while Trade sales growth strengthened at the start of the second half. The company expects to continue implementing its 2030 store network strategy, including refurbishments and identifying new store opportunities, while deepening Trade partnerships and investing in Australian-designed lighting and fan ranges. In response to an analyst question, management said it remains focused on opening about four stores per year but noted site availability and development timelines can be challenging; it indicated it may open one store in the second half, with the pace potentially improving next year.
Management also discussed regional variation in housing-related demand, citing stronger conditions in Queensland and Western Australia and softer conditions in Victoria, where it said weaker house price growth has weighed on renovation appetite. Beacon said its Commercial business has been performing well and that new build activity remains supportive.
On its U.S. business, management said sales are increasing again after declines in recent years, though growth remains modest, and it has restructured the business to address costs. The CEO described the U.S. operation as online-only and said online demand normalized after COVID-era lifts, adding the group continues to work on growth opportunities but that the U.S. business is not a large part of overall group performance.
About Beacon Lighting Group (ASX:BLX)
Beacon Lighting Group Limited retails lighting products in Australia and internationally. The company designs, develops, sources, imports, distributes, merchandises, markets, and sells light fittings, ceiling fans, and light globes, as well as energy products. It provides pendant, track, bathroom, outdoor, downlights, step, smart, LED, ceiling, down, spot and bar, strip and cabinet, wall lights and sconces, and lamps lightning products, as well as candles. The company also offers ceiling, exhaust, portable indoor, outdoor, and mammoth fans; air purifiers; pendants and chandeliers; switches; power points and sockets; batteries, LED drivers and transformers; smoke alarms; circuit protections; accessories; and clearance products.
