Sorry, we're actually going to hand over to Ian Robinson, the Executive Chairman, but that's okay. Over to you, Ian.
Okay, thanks very much, Amy. Good morning, shareholders. Thank you for joining us as we present our full year's results for the financial year 2025. I'm Ian Robinson, Executive Chairman of Beacon Lighting , and I'm delighted to be here today alongside our CEO, Glen Robinson, and our CFO, David Speirs. The 2025 financial year has been another year of progress for Beacon Lighting . Our continued focus on trade customers once again delivered solid outcomes, while in retail we saw momentum build through the year, culminating in a welcome uplift in the fourth quarter. With the recent rate cut, we see positive signs of retail spending in the short to medium term, which positions us well for the future. None of this would be possible without the passion and expertise of our team.
Their commitment to delivering outstanding customer experiences is consistently reflected in the feedback we receive. I'd also like to thank our customers for their loyalty to our Australian design product range and our lighting design service, and to our trade customers for continuing to trust Beacon Lighting as a source for lighting, ceiling fans, electric accessories, and a true partner that can help them grow successful businesses. As outlined on page two of your material, today's agenda will begin with Glen providing an overview of the results, followed by a detailed financial performance report from David. Glen will then return to share our growth strategy and outlook before we conclude the Q&A session. With that, I hand over to Glen to walk us through the results.
Thank you, Ian. I'd also like to warmly welcome everyone joining us today. Let's begin by looking at some of the key financial highlights outlined on page four of the presentation. As always, the full presentation and our annual report are available on the ASX or on our corporate website for your reference. The Beacon Lighting Group is proud to deliver another record sales result of $329 million, highlighting the consistency and strength of our performance across multiple financial periods. Our gross profit margin of 69.1% underscores the effectiveness of our vertical product development model and the value it continues to create. Profitability remains strong, with EBITDA of $87.1 million and net profit after tax of $29.4 million, representing an 8.9% net profit after tax margin. We also maintained a robust cash balance of over $55 million, reinforcing the group's solid financial foundations and flexibility for future growth.
Moving to page five, we'll review the operational highlights for the year. Our commitment to strengthening Beacon Trade remains central to our strategy. Since financial year 2020, trade sales have grown from less than 20% of our total sales to now 40% this year, putting us firmly on track towards our goal of 50% by FY 2028. Trade volume growth was particularly strong in our stores, which delivered a 24% increase in trade sales, contributing to a total of $125 million in group trade sales. We continue to invest in our store network, with four new and exciting large stores opened in Chatswood, Port Stephens, Shepparton, and Ballina, alongside two relocations in Bendigo and Taren Point, which were both larger and stronger offers. Innovation remains at the heart of what we do, with 558 new products designed here in Australia for the Australian home across lighting, ceiling fans, and electrical accessories.
Finally, we're proud to commence our first share offering for our team members, welcoming an additional 200 team members as Beacon Lighting shareholders, strengthening alignment across our business. On page six, you'll see the statutory financial results for the financial year 2025. The key difference between these and the underlying comparable results on page seven is that financial year 2024 included 53 weeks in the retail calendar, while financial year 2025 reflects the standard 52-week year. To provide a fair comparison, we've adjusted last year's results by removing one week of trading. The underlying results on page seven are therefore the most accurate reflection of performance and are the basis for our discussion today. Let's move on to underlying results on page seven. The group delivered another record sales result of $329 million, an increase of almost $12 million on last year, representing 3.7% total sales growth.
Gross profit also improved, supported by new product introductions, stronger sourcing from manufacturers, and a relatively stable Aussie dollar. Gross profit margin was 69.1%, ahead of last year's 68.9%. Other income continued to build, driven by interest on cash balances. Operating expenses remain tightly managed across divisions and stores. After several years of rapid cost escalations in some expense lines, it was pleasing to see some of those pressures beginning to ease. Total operating expenses increased by 5.3%, representing 43.5% of sales, which compares to 42.8% last year. As a result, EBITDA grew by 2.5% to $87 million, an increase of just over $2 million, while net profit after tax was broadly in line with last year, down slightly by 0.7%, coming in at $29.4 million and 8.9% net profit after tax margin.
While profitability held steady this year, we are confident that the foundations we've built will drive stronger growth ahead. Our focus on trade has delivered consistent revenue gains year after year, even through a subdued housing market, and positions us exceptionally well as conditions improve. We're now seeing encouraging signs of a turning point. The fourth quarter delivered our strongest comparative sales results of the year, with Beacon Lighting's latest cycle exposure to both new housing and renovation activity. We're well placed to capture the upswing as building activity strengthens, and we look forward to capitalizing on that momentum. On our hand, you're up to David Speirs, our CFO, to take you through some more details in the financials.
Thank you, Glen. Sales on page nine. The Beacon Lighting Group achieved a sales increase of 3.7% to $328.9 million. Company store comparative sales increased by 1.5%, with half two being slightly better than half one. The best performed states from a comparative sales perspective were South Australia, West Australia, and Queensland. It's interesting to note that Q4, financial year 2025, was the best performed quarter in financial year 2025. After a number of challenging years, it's pleasing to see Victorian store sales start to improve in half two financial year 2025. Continuing to strengthen our partnership with our trade customers is reflected in our total trade sales. Total trade sales, which include trade sales through Beacon stores, Beacon Commercial, Custom Lighting, and Massen for Light, now exceed $125 million.
The trade highlight for financial year 2025 was an increase in direct trade sales and referral sales through our stores, which increased by 24%. It's important to recognize that Beacon Lighting stores, Beacon International, and Light Source Solutions in New Zealand all achieved record sales results in financial year 2025. Gross profit on slide 10. The Beacon Lighting Group achieved a gross profit dollar result of $227.2 million, or 69.1% of sales. A gross profit margin of 20 basis point increase was one of the highlights of the financial year result. Although Beacon Lighting has increased our market share in the sale of trade products, it is a vertically integrated supply chain and the mix of products which are sold to our trade customers, which helps support the Beacon Lighting stores' gross profit margins.
Beacon Lighting continues to design, develop, and innovate new products in Australia, which continue to be very well received by retail and trade customers and support our margins as a result. Operating expenses on slide 11. Beacon Lighting has achieved a significant increase of 24.2% in other income. This is primarily a result of a strong cash position and the improved interest rates that are available. As always, the management of expenses has remained a focus for the Beacon Lighting team. In what at times has been a challenging expense environment, total operating expenses have increased by 5.3% to be $143 million, or 43.5% of sales. For many years, Beacon Lighting has increased investment in marketing. In financial year 2025, marketing expenses declined by 3.8% to $16.1 million.
With the opening of new stores, there was an increase in store expenses by 6.3%, while general and administration expenses increased by 6.2%. With the opening of new stores, new leases, and options exercise, depreciation increased by 5.8% and finance costs increased by 5.9%. Cash flow on slide 12. Beacon Lighting has continued to strengthen the cash position of the group through the net operating cash flow. Given the strength of the cash position, Beacon Lighting has been able to reinvest in the future of the business with a CapEx of $10.5 million. Beacon Lighting made dividend payments of $12.8 million to our shareholders after the dividend reinvestment program. Reflecting all those activities, Beacon Lighting has increased the cash balance by $9 million and finished financial year 2025 with a cash balance of $45.2 million. The balance sheet on page 13.
Inclusive of the $10 million term deposit, which is represented as other financial assets, Beacon Lighting's cash increased to $55.2 million at the end of June 2025. Inventory has increased to be $141.4 million due to the increased investment in inventory mainly associated with the Beacon Lighting stores. Right-of-use assets and lease liabilities have increased with the opening of new stores, exercising of options, and the signing of new property leases. Beacon Lighting's strong net cash position has improved and net assets have increased by $16.8 million. Dividends on slide 14. The Beacon Lighting Group 's dividend reinvestment plan remains in place and continues to be available to all shareholders. The directors have declared a fully franked dividend of $0.038 per share for half two financial year 2025, for a fully franked dividend of $0.08 per share for financial year 2025.
The current dividend has a record date of the 5th of September 2025 and a payment date of the 19th of September 2025. Thank you, and I want to pass you back to Glen.
Thanks, David. Let's turn to page 15, where we'll highlight our strategic pillars of growth. Many of you will be familiar with our four strategic pillars that guide our growth. At the center of these pillars is our customer. Every initiative we take begins with a deep understanding of their needs and expectations. Our first pillar is our stores, and continuing to expand and optimize our network while delivering an inspiring in-store experience, exclusive product ranges, and VIP member benefits. Our second pillar is our trade, building stronger partnerships with electricians, builders, architects, and designers, ensuring Beacon Trade is the trusted partner for lighting, fans, and electrical solutions in Australian homes. The third pillar is our e-commerce, creating engaging digital platforms that connect seamlessly with our physical stores, enabling customers to interact with Beacon however and wherever they choose.
Lastly, our fourth pillar is our complementary businesses, our platform for innovation and future growth, including international expansion, new business ventures, acquisitions, and property investments. These pillars don't stand alone; they reinforce one another. Our store presence provides inspiration for our homeowners while supporting trade partnerships. E-commerce extends the customer experience beyond our physical walls, and complementary businesses provide fresh opportunities to scale across the group. Together, these pillars create the framework for long-term customer-centric growth, ensuring Beacon Lighting remains strong today while positioning us for leadership well into the future. On page 16, I'd like to introduce to our shareholders the vision specifically designed for our store network by 2030. Our ambition is to move from being seen simply as a lighting retailer to become Australia's leading provider of quality lighting and electrical accessories for both homeowners and trade professionals.
At the core of the strategy is about bringing these two customer groups together, retail and trade, together in a way that feels natural, seamless, and mutually rewarding by 2030. For the homeowner, it means being inspired and supported with great design outcomes for their home. For the trade professional, it means recognizing them and rewarding them for their influence and loyalty to Beacon and being a partner where we can help them build their business by referring homeowner projects to them. Whether they be an electrician, builder, or designer, we interact daily with the homeowner and can recommend the trade that supports our business. At the intersection of these two groups, it's Beacon, becoming the default destination for both. In practice, that means being the homeowner's first choice for inspiration and guidance, and at the same time, the electrician's most valuable partnership. Page 17.
In addition to our 2030 vision, I'd like to provide an update on our store network. In financial year 2025, Beacon Lighting ended the year with 127 company-owned stores and two franchise stores, continuing to strengthen our national footprint. We expanded into new markets with four new stores in Port Stephens, Shepparton, Chatswood, and Ballina, and completed key relocations in Bendigo and Taren Point while expanding our Townsville store into a larger, more dynamic format. All of these stores are impressive formats, reinforcing the brand and the customer experience. Comparative sales were up 1.5%, led by stronger results in South Australia, Western Australia, and Queensland. Importantly, momentum picked up in Q4, setting a positive tone for the year ahead.
Innovation remains at the core of our offer, with 558 new products added to support our 3,500 strong core range, and our 53 design studios delivered 2,750 consultations, reinforcing Beacon as the destination for inspiration and design expertise. Our store network research highlights the potential to grow towards 195 stores nationally, giving us a clear runway for expansion into the years ahead. On slide 18, we'll provide a trade update. In trade, in financial year 2025, it was another year of strong progress. We enhanced the Beacon Trade program with new essential trade products, special pricing, Beacon cash rebates, trade perks, and increased the range of branded workwear, all designed to build deeper relationships with our electricians, builders, architects, and designers. Importantly, we invested in our team, with 330 team members completing trade immersion training, ensuring the customer experience is consistently aligned to the trade needs.
Our Beacon commercial business, which focuses on the volume residential builders, maintained their market share and grew their profitability around Australia. Our results speak to this focus. Trade sales now exceed $125 million, representing 40% of all relevant sales. With our stores alone, trade sales grew by 24%. We're also pleased to be able to gain share in core trade products that we previously hadn't offered at Beacon, and the uptake has been very positive. Our progress in trade plays well into our 2030 vision that by developing deeper trade partnerships, our trade will refer more business to Beacon, and we can refer more homeowner projects back to the trade. With this momentum, we remain firmly on track to achieve our goal of 50% of relevant sales for trade and 50% from retail by financial year 2028. On page 19, we can review e-commerce.
E-commerce continues to grow as a key channel for both retail and trade customers. Our main websites, beaconlighting.com.au and beacontrade.com.au, are attracting more visitors with stronger traffic, transactions, and conversion rates across the year. In financial year 2025, total online sales grew by 11%, now representing 12.3% of total store sales. Beacon Trade members also showed strong engagement online, with trade e-commerce sales up 29.3% and visitation up 26.5%. Online trade sales now represent 14.3% of direct trade sales. Importantly, our platform continues to integrate seamlessly with our store network, ensuring that customers, whether retail or trade, experience the same level of service and convenience across every channel. On page 20, we'll review complementary businesses. Our complementary businesses delivered a mixed but overall positive contribution in financial year 2025. Beacon International grew sales and profit with double-digit increases in Hong Kong and Europe, while sales in the U.S. were softer.
In China, our T-Mall global sales channel grew by 72%, making it an exciting and profitable sales channel. Closer to home, Light Source Solutions in New Zealand delivered growth, while sales in Connected Light Solutions, Custom Lighting, and Massen for Light were softer. We also continue to benefit from our 50% stake in the large format property fund, which owns seven retail properties. Of these, four are fully tenanted, one partially tenanted, and two are in development, providing both income and future growth potential. Together, these complementary businesses broaden our earnings base, diversify our portfolio, and create opportunities for future expansion. Sustainability on slide 21. Our sustainability goals are built around three focus areas: people, product, and planet, and have been core to what we do for over a decade here at Beacon.
For people, we continue to invest in our team, with 339 members completing trade immersion training and an additional 200 team members becoming Beacon shareholders through the team share plan, further aligning our people with the long-term success of the business. For product, our commitment to energy efficiency remains at the core of our innovation. Our LED globes and lighting range are now 80% more energy efficient than traditional light sources, helping customers reduce both energy use and costs. For the planet, we now have 69 solar systems operating across Beacon Lighting stores, increasing self-supply of power and reducing reliance on the grid. We're also transitioning our fleet towards electric vehicles, reinforcing our commitment to the lower carbon future. On page 23, our outlook. Company store sales momentum from Q4 financial year 2025 has continued into the start of financial year 2026.
The positive momentum in trade sales has continued into financial year 2026 and represents a powerful growth driver for the group. This year, we'll embark on implementing the 2030 store network strategy. We opened the new Beacon Lighting store in Auburn and will open in Altona in Victoria, as well as other locations currently under review. At the same time, we're pursuing new international sales opportunities by taking Australian designed lighting and fan products into more markets worldwide. Importantly, we continue to lead in product innovation, bringing customers the latest in fashion, energy efficiency, and design excellence to inspire homeowners and strengthen partnerships with our trade. With our continued focus on our customers, clear strategy for 2030, and exciting opportunities ahead, we believe financial year 2026 will be a year of growth, innovation, and continued success for Beacon Lighting.
Thank you for your time, and I'll now hand you back to Ian Robinson to address any questions you may have.
Thank you, Glen and David, for your presentations. We're now open for questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. The first question comes from Kseniya Chadayeva at Jarden.
Morning. Thanks for taking my question. Can you please give us more insight on what has changed from third quarter to fourth quarter, and what drove the acceleration? Was it mostly from retail customers coming back, or it's purely trade-driven?
Thanks, Kseniya. Yeah, it is across the board, and what's pleasing to see is across the states as well. We've just seen consistent performance or stronger performance across trade and retail since, really, the third quarter was okay, and then we started to pick up a bit further in the fourth quarter. As we all know, Victoria has been a pretty difficult state to operate in over the last couple of years, but we're definitely starting to see some better performance out of Victoria, and that Victorian performance did start to improve in the third quarter of the financial year. Some positive signs there. I think the rate cuts have definitely helped some homeowners around the country, and particularly in Victoria, to feel a bit more positive about investing into their home.
Oh, that's nice to hear. Thanks. Can you also please share us on guidance how we should think about your costs moving forward? You had a bit of a step up this year, reaching to 43.5% of sales. Should we expect similar levels for next year?
Costs. I think from a, there were some items there that we're managing at the moment, which I think we'll be able to manage a bit tighter in the year ahead. We've made some adjustments to that already. I think from general costs, yeah, you've got your wage and remuneration costs flowing through, which do come through at a higher rate than they have been in the past. I think that is starting to stabilize a little. I think electricity costs have stabilized a bit for us. You still have some unusual things like outgoings and, you know, other.
Land taxes.
Other property costs, that.
Yeah, which, and other sort of remuneration other than wages in our stores continue to seem to go up. You know, super's gone up, payroll tax has gone up, work cover's gone up. All those sort of statutory costs have continued to be a challenge, but it's probably reasonable to think that 5.3% might be similar. That's something we continue to work on and focus on.
Okay, thanks. Last one, if I may, how is your trade club loyalty program performing in terms of frequency and basket size? If you're also going to share some member numbers, that would be great. From memory, it should be around 60,000. If you can give us details, thanks.
Yeah, you're pretty close to the number there. It's a number that we're not speaking as openly about now that we've got up to a decent size. We do look at the frequency of our trade customers, and that has been increasing. We look at a number that we call unique customers by month, and that's how many times a unique customer will come into our branches. That's one of the main KPIs that we have for the stores. If you can drive that number, that means more phone calls, more reaching out to trade customers, bringing them into the store, your trade sales will continue to grow. That has been a number that has continued to improve over the year. Our sales mostly still come from the existing base of customers that we have.
I won't give you the exact number, but to say the majority of our sales are still coming from the existing base rather than the base of new customers growing. I think that's a positive sign for a loyalty type program or a trade program that you're getting more from your current customers than you are from new customers entering the program. We've got a very good database of trade customers now. When you're talking about specifically electricians, builders, architects, and designers, there will be a bit of a limit to how many trade customers you'll add to that trade club. I'm not saying we're at the limit yet.
We will continue to add more and more customers, but it's more important for us to continue to work on the frequency and spend of those current customers that are already in the trade club than necessarily trying to drive further trade club members to sign up. That's where we are at the moment, Kseniya.
You're all the best.
Thank you.
The next question comes from Sam Teeger at Citi.
Hi, Ian, Glen, and David. Firstly, just wanted to congratulate Ian on the LFRA Lifetime Achievement Award. Very exciting and well deserved. My first question is about new stores. There's no guidance for FY 2026. Are you finding it more challenging to find sites given the lack of construction of large format retail? You did six stores in 2025, including relocations. Can you do six again this year, or is that going to be too much of a stretch given the current environment?
I think the rollout of the stores gets a little bit lumpy because a lot of the building projects are delayed for various reasons. We saw that happen over the last couple of years where we didn't put very many up in one year, and then they all fall in the following year. At the moment, we've got plenty of stores, but where they're all going to fall into 2026 is the question.
I think, Sam, in our store strategy, our vision piece that we put together, it's quite a large and comprehensive document that we've pulled together. Part of the core of that is that we are looking for four new stores every year, and that's what we'll try to commit to is four stores and two relocations into stronger premises. That is the goal. Whether they all fall into the financial year, I mean, you might end up with one falling into the next year, and then you end up with five in one and three in another. Generally speaking, that's what we're targeting at the moment.
Yeah, I think, you know, if you look back over the last three years, we continue to invest heavily into new stores, bigger formats, more exciting presentations, better architecture presentation, better profiles of those stores. Those stores are yet really to hit the expectations that we think they were there. They're really to future-proof the business for the future.
Sure. On gross margins, it's another great outcome for the business. Are the factories giving you better prices as a result of the US tariffs, or if not now, do you think that might still come in the near term?
We haven't seen any really significant change in the pricing. You know, we can, when we're bringing out 550 odd new items, you can obviously innovate in those product items and manage your pricing and all that. Generally speaking, from the regular price that we've been purchasing over a longer period of time, we haven't seen big price reductions, particularly since the tariffs. From what Ian Robinson and I and the rest of the product team are up in China quite frequently, some of those factories are doing it pretty hard because of all the stop-start that's happening in the America . When you're doing it tough and you've got a consistent supplier like Beacon , we become a very important customer to them. They can't afford to necessarily go chopping their margin either to try to get potentially more volume.
It is a bit of a balance at the moment up there. I think we're still, what's exciting for us is that we've got a great team that continues to innovate the product range, and that's been able to allow us to deliver some pretty solid and consistent margins, which, despite pushing quite heavily into trade, I think we're all being very happy with the results.
I think, yeah, that's great. The thing that we really enjoy is that we're not getting the annual increases that we were getting. We would normally see, you know, every after the Chinese New Year, you'd see prices increase. We're not seeing that, and we're getting reasonable buying prices. We're working with these factories for 10 years, 20 years, and they're an important part of our future. We're going to make sure that they're still around.
Okay. On the costs, they grew in aggregate at 3.1%, which at a headline level sounds positive, but the business did have to cut marketing to get there, with most other costs growing between 6% to 7%. Can you talk about the marketing costs you made, how you get comfort that it has a detractor from your sales, and what are you budgeting for marketing in FY 2026?
I think where we came through this year with marketing was probably a bit lower than what we would typically spend, and we might be looking to increase that a little bit, but we'll be looking for other cost savings across the business to be able to support that. There is obviously an offset between if you're spending less on marketing, you can potentially restrict your sales a bit. I don't know whether we saw that directly, but I definitely think we're below 5% in the percent of sales on marketing, and that is reasonably unusual for us. It's not the first time we've done it, but it is unusual. I think we'll be having a more standard year next year.
Okay, great. Just one more if I can. Trade's been a really good success for the company in recent years, but until recently, retail's been quite subdued. There is some concern out there that the growth in trade has come somewhat from retail, as arguably it's the same end consumer just buying in a different way. Do you want to use this forum as a way to address this concern?
Look, Sam, part of that is, you know, the truth, and it is accurate. We sell to homeowners, and we sell to electricians and builders and designers, and sometimes those homeowners will use their electrician or builder to buy their product through Beacon Lighting. Sometimes that electrician or builder will send the customer, the homeowner, into Beacon Lighting because they have trust in the Beacon Lighting product range. It is part of this whole 2030 strategy that we're trying to bring those two groups together, that a trade customer doesn't work in isolation. They're working for a homeowner in our category because we're only focused on the home. The trade customer works for the homeowner. The homeowner generates the inspiration and the will to take on these projects, whether it be renovations or rebuilds, and they need trade customers to be involved in that.
Trade customers have the ability to make recommendations about who they should be buying from, and we want more trade customers to be referring Beacon Lighting as the main source of lighting and electrical for their customers. There is absolutely some crossover there. Where we get comfort that we're growing in the total market is that we can introduce new categories like cable, downlights, switches, and they're really well accepted by our electricians and builders. Where they had previously purchased those categories from other suppliers out there, they're now buying that product from Beacon Lighting. There is definitely some crossover there. It's not the entire story, but if we continue to reinforce that partnership with our trade customers, they'll continue to send more and more customers to us because we don't get the whole lot at the moment.
When we have a look at the trade market, we've been able to grow our trade market share from about 2% from where we started back in 2020 to now around about 6% of that trade market that we're chasing. We're certainly heading in the right direction, but we're still a very small player in what is quite a large market, and there's still lots of product introductions that we can bring into the market to grow in those categories and the share of wallet with those trade customers.
Right. Thanks, Glen.
Thanks, Sam.
The next question is from Amanda Kelly at Barrenjoe y.
Morning, team. Congrats on the result. I'm just helping out Ari today. Just a couple from us, if possible. I guess firstly, just any color you can provide on what the actual total trade sales growth in FY 2025 year on year was?
We had obviously store sales growth up 24%. Commercial was flat, and we indicated that mass sale and custom were slightly down. If you think maybe sort of high-ish teens, that's sort of where we're talking.
Right. Just confirming, is that on a 53-week year on year basis, or?
That'd be a comparable 52-week basis.
Okay. Thank you. How should we think about the gross profit margin in FY 2026? I guess what are the moving parts behind that?
I think we're starting to see freight costs. It goes up and down a bit, but freight costs seem like they're getting a bit more under control. The Aussie dollar, as I said in my presentation, it's relatively stable. It's been stable for a bit of time now, so that certainly helps. If we've got stability in our pricing from the factories, which we have, we've sort of indicated that, that we're not seeing major changes up there, it's really only going to then be the mix, the mix of the products that we're selling. I think we're in a reasonably comfortable position to continue to deliver strong gross profit margins. We have seen an uptick in some of those trade essential categories that we've introduced into the business.
Some of those are at lower margins, and as we continue to excel in those areas, then they might have a bit of an effect on the overall gross profit margin. I think for the financial year 2026 period, I think we should be reasonably comfortable where we are.
We don't think there'll be much movement. Any movement up or down will be relatively minor.
Thank you. Just one final one. What total international revenue growth did you have in FY 2025?
I'll have to look that one up. You got that? Yeah, I have. The international, it was, we had positive growth. It was up, it was up over 6% in the total Beacon International, 6.5%.
Thank you.
All right.
Good on you, Amanda. Thank you.
The next question is from Emily Porter at Morgans. Please go ahead.
Hi guys. Good morning and congratulations on the result. Maybe if I can just go back to the comment you made about Victoria improving. I guess I'm just interested if you're seeing an underlying improvement in the consumer there, or is part of this really driven by you're now starting to comp these sort of soft numbers? Yeah, any color you can give there?
Yeah, look, there's a bit of bias, I think. I think when you have rate cuts in a more depressed market, then they probably have a stronger effect on spending. I think we're probably seeing a little bit of that. Victoria is our strongest trade state by volume. They have historically always been a very strong, well, over the last five years or so, been a strong performer in trade sales. That has certainly helped as well. We are just seeing a gradual uptick in performance. I think also what is very worthwhile noting is that our tenure in Victoria has been very strong. Our store manager tenure has increased in Victoria.
I think that's really important to have a strong, stable team that are very competent at what they do across our entire network, that know how to perform well with trade customers and retail customers and deliver great levels of customer service has certainly helped us get into a, you know, maybe a slightly more positive position than what we've seen over the last couple of years.
That's great. Maybe just another question on the international. I guess, you know, Hong Kong and Europe doing well, U.S., you know, softer. Maybe if you can just give a bit more color by region on how things are going.
Yeah, you know, Hong Kong's the biggest market that we have internationally, and that business, as we said in the deck, had a double-digit increase. To have your largest section of the business performing at double digits is fantastic to see. It's also our most profitable part of the business as well from the international businesses. It's good to see that driving well. I think what we're really pleased with in the European business is we continue to grow our base of customers. We're not reliant on only a few customers here and there. We've got a really strong base of customers that puts us in a good position to continue to grow into the future. The U.S., I mean, yeah, the U.S. has been certainly a challenging market. It's a very small business for us.
If we went back, say, three or four years ago, when they were going through, when we were all going through COVID, it was an exciting market because we were mostly selling on e-commerce channels, and e-commerce obviously took off. That was good for us back then, but it's certainly not as an exciting market. As I said, it's a small part of our, very small part of our international business and a much smaller part of our total business. We'll continue to work on the US business, but very happy with the U.S. and Hong Kong.
Very happy with Europe and Hong Kong.
Sorry, Europe and Hong Kong. Thanks for the correction there.
That's all right. The U.S. is a work in progress.
Yeah, yeah.
That's great. Thanks, guys. I'll leave it there.
Thanks, Emily.
The next question is from James Casey at Ord Minnett . Please go ahead.
Good morning, gentlemen. Just with regards to your 2030 vision, I suspect it's a larger piece of work than the one slide you've presented today. Is there any comments you can make on how that may impact the store format, larger formats going forward? Can you just make some comments on that question?
Yeah, look, the format and the renovation or refurb sort of activity isn't a big feature of the 2030 strategy. It's important, and it is in there, but you won't see the stores dramatically changing over the next five years. That's not core to the strategy. What's probably more core to the strategy is what we tried to indicate on that one slide, and you're right, there's a lot more detail in it than just one slide. Really trying to bring, let me rewind a little bit. When we started in trade back in 2020, we had to distinctively market the two different areas, retail and trade. We did that on purpose so that our store teams could see that there is a different opportunity here. It's a market that's two times the size of our current retail market. We have to tackle that market specifically.
Direct communication with trade customers, have particular activities around driving those sales. That ends up creating two channels of sales that you've got, this retail and trade, but it's all transacted through the same store presence. What we'll be doing over the next five years is bringing those partnerships or those relationships back together. As I said to Sam in his question, the homeowner doesn't work in isolation. They need the trade customer to support their projects. We're trying to make those connections stronger. When a homeowner walks into the store, we can connect them with the trade customer. At the moment, that feels a little bit clumsy in our stores, and it's something that we're working to improve. You can do that through systems and processes. That's sort of part of the core of the strategy.
The other big part of the core is building operational improvements into our business. Over the past 10 years, we've grown quite a lot since listing, and the business has performed well. The operations itself haven't evolved dramatically over that period of time. I think when we've got 900 team members across our store network, they've got some incredible ideas on how you can improve operations. We've built a continuous improvement program, which provides us with feedback direct from the floor about how we can make their lives, our team's lives, easier in stores so that we can focus more on the sales activities that we want to focus on rather than processing issues within the business. That's a big part as well. Now, when you hear that from a lot of businesses, that means there's going to be a lot of investment in IT and software and all that.
That is sometimes the case. Over the last four weeks, we've launched a new, we're calling it a mini CRM. For most businesses of our size, when you put in a CRM, you're talking about hundreds of thousands, if not millions of dollars, to put in a CRM. We've put a very effective CRM into place in our stores, which integrates with our point of sale system, which has been an internal built system with feedback from the stores about what they need to see. It's cost us tens of thousands of dollars. That's the effectiveness that bringing your team closer to the decision making can have on a business. That's just one example of many that we're working on at the moment. It's exciting times, and there's still plenty of work to go because we're very early.
are many facets to them. When we launched on the trade initiative, there were multiple facets, different programs, tens, a hundred different types of programs. You can expect that with the retail initiative as well, there will be a lot of programs supporting this initiative. It is not just one part. It is a serious working document.
Yeah.
Okay. Thank you. In terms of trading conditions, obviously you've had a bit of a subdued backdrop with regards to the housing sector. Housing approvals are starting to pick up at the moment, as is the renovation spend. Can you just make some comments as to what you're seeing or what you expect to see in terms of the housing sector over the next year or two?
Yeah, look, I think as you see rates easing, we should start to see a bit of a pickup in housing. What I think we have been fortunate with is that, you know, house prices, apart from in Victoria, have been still pretty strong across most of the other states. Most homeowners feel like they've still got some good value in their home, which is positive for us. We do need to see an increase in the turnover rate or churn rate of homes. Hopefully, with maybe some further easing of rates, we can start to see a bit more churn coming through. I think it's still early days.
What we are mostly concentrating on is that, like what I was saying before, we can concentrate on what we can do, and we operate in a market that everyone else is operating in, but we are still a relatively small player in a trade market. We've got $125 million of over a $2 billion industry, and that's really what we're focusing on. The markets go up and down. I've been in this business now for over 30 years. Ian's been in the business for over 50 years. We see the markets go up and down. It's about what are we doing internally to make sure that we improve year on year. When we went through COVID, we hit a new high for the business in sales. Very much about the last few years is making sure that we can continue to grow from that high.
We have been able to do that. That consistency for us is more important rather than, you know, we look at the external stuff, but that's not what we focus on. We focus on our internal things that we can control.
Okay, last quick one. Obviously, that's solid financial performance. Perhaps a little unfair, the only area of weakness was the cash flow from operations. David, was there anything you wanted to call out there in particular that may have impacted that cash flow from operations?
I think the only thing we did, we did build up some stock for our Beacon Lighting stores in the year. That sort of.
Just the working capital outflow?
Yeah, it was.
Okay, next gen.
Increased stock for our core business as well. We want to be well stocked for our customers. When they come into the store, they can get what they want.
Understand. Thank you.
Thanks, James.
The next question comes from Boris Filikian at Citi. Please go ahead.
Hi guys. Congrats on the result. Just one from me. Could you just help us think about net interest and D&A in FY 2026? Is it fair to assume a similar step up in both?
Yeah, I would think so. I mean, a lot of that's driven by our property activities and lease accounting. I think interest rates are coming down, which does help our lease accounting and finance expense. We're probably going to have a similar level of activity next year as we did this year. Does that help a little bit?
Yeah, that's clear. Thank you.
Thanks.
The next question is from Claudia White at Morgan's. Please go ahead. Ms. White, please go ahead.
are no further questions at this time. I'd now like to hand the call back to Mr. Robinson for closing remarks.
All right. Thank you, ladies and gentlemen, for those questions. I wish you a pleasant day, and thank you for your interest in Beacon Lighting .
Yeah, thank you very much.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.