I would now like to hand the conference over to Mr. John Lorente, Chief Executive Officer. Please go ahead.
Thank you, Saranju. Thank you to everyone who's joined us today. My name is John Lorente. Joining me is John O'Connor, our CFO. It is our pleasure to present Big River's results for the 2026 financial year. I will start with an overview of the business and our performance for the year, including some of the key areas of progress across the group. I will then hand over to John to take you through the financial results in more detail. I will come back after that to talk through our strategic priorities, the broader market environment, and our outlook for FY 2027 before we open up the call for questions. If we turn to slide three, business overview. This is a slide many of you will have seen before, and it highlights the diversity of Big River across geography, end markets, and supply channels.
We now operate 25 sites across Australia and New Zealand, including seven manufacturing facilities. Queensland remains our largest individual region at 31% of revenue, while Western Australia and South Australia now represent 23%. Western Australia has been one of our stronger performing markets, and the acquisition of Johns Building Supplies has materially strengthened our position and capability in that region. Our supply chain also remains deliberately diversified. Approximately 20% of our revenue comes from products manufactured by Big River, 15% from direct imports, and 65% from local supply partners. That mix gives us flexibility and supports our ability to offer differentiated products while maintaining strong supplier relationships. Across our end markets, detached housing represents 37% of revenue, but we also have meaningful exposure to multi-residential, alterations and additions, commercial, civil, and OEM markets. Importantly, our largest customer represents less than 2% of our group revenue.
The key message from this slide is the breadth of the platform. We have diversity across customers, products, regions, and construction markets, which remains particularly important in the current environment. If we go to slide four, divisions. Big River operates through two complementary divisions, construction and panels. Construction generated AUD 295 million of revenue in financial year 2026 across 16 sites. It incorporates our building trade centers, frame and truss operations, and four multi commercial businesses. Panels generated AUD 131 million of revenue across nine sites and remains a leading supplier of differentiated decorative and technical panel systems across architectural, fit out, residential, commercial, and OEM applications. Across both divisions, our execution focus is consistent. We are focusing on areas where Big River has a clear competitive advantage, strengthening trade customer and supplier relationships, growing higher margin and differentiated categories, and continuing to improve the efficiency of the network.
We are also investing selectively in profitable growth, both organically and through targeted acquisitions. The objective is to grow above the market while continuing to improve margins and create operating leverage through the existing platform. We now go to slide five and the performance highlights for financial year 2026. Overall, this was a solid result in a market that remained challenging. Group revenue increased 5.3% to AUD 426.4 million, reflecting resilient trading across the group and the partial year contribution from Johns Building Supplies. On a like-for-like basis, revenue was down approximately 1%, which reflects the continued softness in residential construction markets in some geographies. Despite that, we were able to grow both gross profit and earnings. Gross profit margin increased a further 30 basis points to 26.5%.
That continues the margin improvement we have recorded over several periods and reflects disciplined pricing, better product mix, procurement initiatives, and closer alignment with our key suppliers. Underlying EBITDA increased 8.4% to AUD 31.1 million, with EBITDA margin improving to 7.3%. Importantly, earnings grew faster than revenue despite the underlying market environment. Cash performance was also strong and a highlight of this performance this year. Cash conversion increased to 101.5%, while net working capital to revenue improved materially from 17.7% to 15.9%. Gearing reduced from 20.1% to 17.9%, despite completing the JBS acquisition and continuing to invest in the business. The board has declared a fully franked final dividend of AUD 0.02 per share, bringing total dividends for FY 2026 to AUD 0.04 per share. Overall, financial year 2026 demonstrates good execution across the areas we can control.
Margin, earnings, working capital, and the balance sheet all improved, providing us with a stronger base entering into financial year 2027. We now move to slide six and divisional performance. Starting with construction. Revenue increased 7.1% to AUD 295 million, supported by the partial year contribution from JBS. Construction EBITDA increased 19.4% to AUD 27.7 million, with EBITDA margin improving from 8.4% to 9.4%. Formwork and commercial remained comparatively resilient and delivered positive organic growth, with particularly strong contributions from Western Australia and New South Wales. We also saw strong organic growth in South Australia and Western Australia more broadly. JBS performed ahead of expectations in its first partial year of ownership and has further strengthened our presence in W.A. The improvement in construction earnings also reflects the operational and network efficiencies we have been working on over the past two years. Moving to panels.
Revenue increased 1.3% to AUD 131.4 million. We continue to see organic growth in bespoke and value-added categories, which was partly offset by softer conditions in New Zealand and ongoing weakness in the recreational vehicle market. Panels EBITDA declined 8.9% to AUD 12.3 million. That reflects competitive pricing and product mix pressures, together with the investment we are making in targeted growth initiatives. Importantly, the areas where we have been deliberately investing continue to gain traction, particularly decorative bespoke panels and other differentiated higher-value categories. At group level, corporate costs increased AUD 0.9 million, reflecting inflation, employee costs, and investment in group capability and governance. The overall message is that construction delivered strong earnings growth while panels' differentiated categories, central to our long-term strategy, continue to grow despite challenging market conditions. I will now hand over to John O'Connor to take you through the financial results in more detail.
Thank you, John. Good morning, everybody. Starting on slide seven, the profit and loss account. Revenue for the year was AUD 426.4 million, up 5.3% on FY 2025. This included the partial year contribution from Johns Building Supplies following the completion of that acquisition in December last year. On a like-for-like basis, revenue was down approximately 1%, reflecting the subdued residential construction environment that John has discussed earlier. Pleasingly, despite those market conditions, gross profit increased 6.5% to AUD 113.1 million, with gross margin improving a further 30 basis points to 26.5%. This continues the improvement we have reported around pricing discipline, product mix, procurement initiatives, and that tighter alignment that we have with our key suppliers. We are particularly pleased that the margin improvement has been achieved despite the ongoing competitive environment and lower volumes across some of our larger markets.
Operating expenses increased by 5.8% for the year, largely reflecting the addition of Johns Building Supplies and continued investment in capability across the group. Importantly, on a like-for-like basis, operating expenses increased by approximately 2.8%, which is below underlying inflation and reflects the ongoing cost discipline across the business. The combination of the stronger gross profit and controlled costs result in an underlying EBITDA of AUD 31.1 million, up 8.4% on FY 2025, and with the EBITDA margin improving from 7.1% to 7.3%. That return to full-year EBITDA growth is important. We have achieved it despite the continued softness in the underlying construction market, which gives us confidence in the operating leverage available as volumes improve. Moving below EBITDA, depreciation and amortization increased to AUD 18 million, predominantly reflecting the impacts of the JBS acquisition and continued above-inflation increase in lease costs that came up for market review during the period.
Our net finance costs reduced modestly to AUD 5.3 million, notwithstanding the acquisition during the year, reflecting the discipline in cash and debt management. As a result, NPAT before significant items increased 20.5% to AUD 5.2 million. Looking briefly at significant items. These included approximately AUD 1 million of acquisition costs, predominantly associated with Johns Building Supplies, together with restructuring and rebranding expenditure. Then costs associated with the implementation of a new HR system and a subsequent payroll data review. These were partially offset by a AUD 1.4 million fair value gain associated with contingent consideration. The reported NPAT attributable to shareholders was therefore AUD 4.9 million, compared with the prior year statutory loss following the AUD 20 million impairment recognized in FY 2025. I would also highlight the contribution from JBS. During our partial ownership period, JBS contributed approximately AUD 25.2 million of revenue and AUD 3.1 million of EBITDA, ahead of our acquisition expectations.
Looking at slide eight, the profitability waterfall. This slide helps to explain the movement from the AUD 28.7 million EBITDA result in FY 2025 to AUD 31.1 million in FY 2026. The first point is that the like-for-like revenue decline resulted in reduced EBITDA of approximately AUD 1 million. That was more than offset by approximately AUD 2.6 million of benefit from that gross margin improvement, reflecting that pricing product mix and procurement initiatives I mentioned earlier. Like-for-like operating costs increased, reduced EBITDA by approximately AUD 2.3 million. Although those increases were partly mitigated by continuing operating and network efficiencies. The JBS acquisition then contributed approximately AUD 3.1 million during the period of ownership. The important takeaway here is the margin expansion and contribution from JBS more than offset softer underlying revenue and higher operating costs, allowing the group to return to EBITDA growth.
This is particularly encouraging given we have not yet seen a meaningful cyclical recovery in many of our end markets. It reinforces our view that the business is well-positioned to capture operating leverage when volumes improve. Moving now to the balance sheet on slide nine. We finalized FY 2026 with what we believe remains a strong and appropriately positioned balance sheet. Cash at the end of the year was AUD 24.5 million, up from AUD 22.8 million last year. Total borrowings were broadly stable at approximately AUD 49.3 million. This resulted in net debt of AUD 24.8 million, a modest improvement of the AUD 25.5 million at June last year. Importantly, this was achieved after funding the cash component of the JBS acquisition during the year.
Our gearing ratio improved to 17.9% from 20.1% at June 2025, supported by that strong cash generation across the business and the equity raising completed alongside the JBS transaction. That remains comfortably within our target range and provides us with ongoing flexibility to invest in the business and consider future growth opportunities. Working capital was also well managed. Our net working capital to revenue improved to 15.9% from 17.7% last year. We placed a strong focus on inventory and debtor management through the year, and we are very pleased with that outcome. This is an area where we have consistently demonstrated good discipline. We are not getting ahead of ourselves, and this continues to be a major focus for us. The increase in intangibles and contingent consideration largely reflects the JBS acquisition. Moving to slide 10, the cash flow.
The cash performance through the year was particularly strong. Operating cash flow before interest and tax increased to AUD 31.7 million, representing a cash conversion of 101.5% compared to 100.1% last year. This was underpinned by both the quality of earnings and disciplined working capital management that I just discussed. Cash generated from operating activities after interest and tax increased to AUD 25.2 million compared to AUD 23.3 million in FY 2025. During the year, we used approximately AUD 13.1 million in cash for the JBS acquisition. We also successfully completed approximately AUD 10 million renounceable entitlement offer, which helped fund that acquisition while preserving balance sheet flexibility. Gross capital expenditure for the year was approximately AUD 4.4 million, with expenditure continuing to be focused on essential replacement assets, branch and manufacturing improvements, and initiatives supporting operational efficiencies and future growth.
We also paid approximately AUD 3.6 million in dividends during the year, slightly up on the prior year. Despite the acquisition, capital investment, and dividend payments, cash increased by approximately AUD 1.8 million over the year. This is a very pleasing outcome and demonstrates the cash-generated nature of this business. Finally, looking at slide 11, capital management. As mentioned, the net debt finished the year at AUD 24.8 million, with gearing of 17.9%, down from 20.1% last year. Our banking facilities remain well-positioned. We completed the extension of our existing NAB facilities during FY 2026, with maturity dates extending through into 2027 and 2028. At the year-end, we had approximately AUD 16 million of unused acquisition loan capacity, providing appropriate liquidity and flexibility for the business.
As I noted earlier, net working capital to revenue improved to 15.9%, which also remains within our target range. The board has determined a fully franked dividend of AUD 0.02 per share, taking the total dividends for FY 2026 to AUD 0.04 per share, consistent with FY 2025. This represents a payout ratio of approximately 76.9%. We continue to balance three priorities in our capital management approach. Investing in organic growth and operational improvement, pursuing disciplined value-accretive acquisitions where appropriate, and maintaining sustainable return to shareholders. The combination of strong cash conversion, lower gearing, and available debt capacity leaves us well-placed to pursue those objectives. I will now hand back to John, who will take you through our investment priorities, financial ambitions, and outlook for FY 2027.
Thank you, John. Let us move to slide 12, investment and building for the future. This slide brings together the work we have been undertaking across the group and importantly, where we are now directing investment. Over the past two years, we have done a significant amount of work to improve the operating platform. We have consolidated parts of the network, improved manufacturing efficiency, strengthened supplier alignment, improved working capital, and maintained discipline around the cost base. At the same time, we have continued to invest in the business. The more efficient cost base gives us greater capacity to invest behind the opportunities where we believe Big River has a genuine competitive advantage. On the market side, that means targeted business development, category management, pricing and mix improvement, and further growth in areas such as cladding, plywood, and differentiated decorative panels.
Operationally, we continue to focus on supplier consolidation, value-added products, manufacturing utilization, and supply chain efficiency. Internally, we are investing in people, systems, processes, governance and cyber capability to support a larger and more scalable business. I also want to call out safety. Our Lost Time Injury Frequency Rates reduced to 4.2 from 5.8, while the Total Recordable Injury Frequency Rate reduced to 14.4 from 38.6. That is a significant improvement and reflects several years of investment in safety systems, leadership, and operational processes. There is still more work to do, and safety remains a core priority for the group. The objective across all these initiatives is straightforward; build a more efficient and scalable business while selectively investing in the areas capable of delivering sustainable sales and margin growth. We move on to slide 13, financial ambition and growth.
Again, this is a slide many of you would have seen before. Our long-term financial ambition remains unchanged. We are targeting revenue growth above the market, continued gross profit margin expansion, an EBITDA margin above 10% through the cycle, working capital below 20% of revenue, and sustainable fully franked dividends. FY 2026 represents further progress against those ambitions. Gross profit margin expanded another 30 basis points. EBITDA margin also improved. Working capital reduced to 15.9% of revenue. Cash generation remains strong, and we have maintained fully franked dividends. The balance sheet gives us flexibility in how we allocate capital. We will continue to look at targeted value-accretive acquisitions. We will continue to invest organically where we see attractive returns. We will maintain our focus on sustainable shareholder returns. We have now completed 16 acquisitions since listing, with JBS being the most recent in December 2025.
As outlined at the bottom of this slide, the board has also engaged Greenstone Partners to assist with a review of the group's strategic options. That review remains ongoing. There is no certainty that it will result in any specific outcome, and we will update the market once the review is concluded. Let's move on to slide 14, investment highlights. Rather than going through every point on this slide, I would highlight several things. First, we have returned to full-year earnings growth despite an unsupportive macroeconomic environment. Underlying EBITDA increased 8.4%, while gross margin has now improved against the prior corresponding period for at least three consecutive reporting periods. Secondly, the quality of our cash generation and balance sheet remains a significant strength. Cash conversion was above 100%, gearing reduced to 17.9%, and we retain capacity for further investment.
Third, our growth strategy is increasingly focused on differentiated higher-margin categories where we can combine our national distribution capability with specialist product knowledge, strong supplier relationships, and local manufacturing. Fourth, our acquisition strategy remains disciplined. We have completed 16 acquisitions since listing. Johns Building Supplies contributed AUD 25.2 million of revenue and AUD 3.1 million of EBITDA during the partial ownership period and performed ahead of expectations. There is also meaningful operating leverage within the existing platform. We have invested in the network, manufacturing, supply chain, and systems over recent years. As we grow revenue through that platform, we expect a greater proportion of that growth to translate into earnings. That remains an important part of the opportunity ahead of us. Moving on to slide 15, the macroeconomic drivers. The picture remains mixed, and I think this slide illustrates that quite well. On paper, the forward pipeline is strengthening.
Dwelling approvals increased 9.2% during FY 2026 to just over 205,000, the highest level since FY 2021. There is also approximately 244,000 dwellings under construction at March, which remains near historical high levels. The underlying demand and pipeline are there. The issue continues to be conversion. Affordability pressures, project delays, and construction capacity constraints have all slowed the conversion of that pipeline into commencements, completions, and ultimately product demand. That was evident throughout financial year 2026, and we remain cautious about the speed at which residential activity improves from here. There are, however, some favorable changes in the mix. The pipeline is increasingly weighted towards multi-residential and non-residential activity, and commencements have been stronger in Queensland, Western Australia and South Australia. That aligns well with our exposure to formwork and commercial panels and our broader building trade network.
Our view is that the medium-term fundamentals remain supportive, but we are not assuming a sharp recovery in the near future. That is why our strategy remains focused on gaining market share, growing differentiated categories, and improving execution, rather than relying on the market to drive our growth. Now we will go to slide 16, the group outlook. We enter financial year 2027 with an improved earnings base, resilient growth margins, a disciplined cost structure, and a strong pipeline of targeted growth initiatives. Subject to market conditions and successful execution against our strategic priorities, we reiterate our expectation for double-digit EBITDA growth in financial year 2027. There are a number of drivers behind that expectation. Firstly, we will benefit from a full-year contribution from Johns Building Supplies, and we expect continued growth in the Western Australian market.
We are investing in greater market penetration across higher value categories where we have a competitive advantage, supported by additional sales specialists, technical and category capability. We expect to continue improving gross profit through pricing discipline, product mix, supplier consolidation and procurement initiatives. We are also focused on increasing manufacturing utilization, improving operational efficiency across the branch warehouse and supply chain network, and continuing the implementation of standardized systems and processes. Importantly, our outlook does not assume a strong residential market. We expect residential conditions to remain variable and overall market growth to remain subdued in financial year 2027. Commercial infrastructure and formwork activity should remain comparatively resilient. We expect Western Australia and South Australia to continue to outperform the softer New South Wales and Victorian markets, while Queensland should increasingly benefit from activity associated with preparations for the Brisbane 2032 Olympics.
Against that backdrop, FY 2027 is very much about execution. We will remain disciplined on costs, working capital and capital investment. We will continue to invest behind initiatives that deliver measurable earnings and cash outcomes. We will also continue to assess targeted value accretive acquisition opportunities. To summarize, we are realistic about the market conditions in front of us, but we enter FY 2027 with a stronger business, better margins, a solid balance sheet and a clear set of growth initiatives. Our focus is on growing above the market, continuing to improve the quality of earnings and translating growth through the existing platform into improved returns. I would like to thank the broader Big River team for their continued effort and commitment throughout the year and to our board and our shareholders for their ongoing support.
With that, I will hand back to the moderator, Saranju , and we will open up the call 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 are on a speakerphone, please pick up the handset to ask the question. The first question comes from the line of John Hynd, Petra Capital. Please go ahead.
Good morning, John and John. Congratulations on a solid result this year. If we could start on gross margins. They are pretty strong despite panels, which I guess to be fair, it looks like it has stabilized. Can you tell us what were the main? You have gone through some of the detail, but I guess what were the main buckets that led to those more resilient margins, and is there more in them? And perhaps also an update on panels. Are you approaching an upward trajectory in terms of, I guess, earnings from that segment now as well?
Yeah. Thank you, John. Thank you for your question. Yeah, so look, margins, and they were different across our different geographies, but they have grown for several reasons. Firstly, we have worked pretty hard, as we have already reported previously on the front-end pricing. And part of the maybe decline or not a strong growth on the top line has been that we have actually been very disciplined around not discounting when we do not necessarily need to. So we have been talking about profitable growth. So the front-end pricing has been the first bit. Secondly, we have been working over the last two or three years on aligning with key strategic supply partners and consolidating purchasing where that makes sense. And we have been able to get some slightly better deals on that. And then third has been the mix.
So we have had a value-added product A strategy over the last few years, which is really looking at areas where we do not make the margins in particular product categories where that we need and differentiated products, and looking to increase the margin for where it is at the moment. So that initiative has gone quite well. So they are the reasons why. In terms of panels, a couple of reasons. So firstly, both the New Zealand business, the Melbourne business, and part of the SLQ business, which, if you remember, that is around the RV market. Those markets were quite soft. We saw some competitive pressures out there around whiteboard and standard commodity product. And that pricing or that net margin somewhat offset some of the growth in the value-added products within the panels category. So, over the next 12 months, we are seeing good growth in those value-added products.
We are seeing the pipeline grow. It is important that we have seen SLQ, I told you that business was that RV market. We are starting to see more growth in those specialized decorative products we have been building over the last couple of years. And we will start to see over the next couple of years growth, in both margins and volumes in our view in the panels business.
Okay. Thanks. Just a couple of follow-ups from that. You talk about those higher-margin products in construction. Are those, is it just one or two type products? This is obviously all with the background or during the backdrop of the frame and truss businesses probably still under pressure from a margin perspective as well. How does the picture look when frame and truss volumes improve? I mean, it sounds like or looks like the leverage could be considerable.
Yeah, look, I do not have a number for you, John. Good question. Look, in that formwork and commercial space, we benefited from supplier alignment and some cost pricing on a couple of key commodity lines. Then several more bespoke products we have been able to get above average, well above average margins are growing as well. Putting those two together and then the team at the front end not discounting, being more cautious about their pricing discipline. From a pricing point of view, the formwork and commercial market, and yes, that has been growing quicker than other markets, than other segments for us. Both the volume end are working with suppliers, and the bespoke end on some of the value-added products delivered the result.
Okay. As you reposition the panels segment to deal with the lost volumes with the RV market, do you think you can get the panels business or the panel segment back to those historical margins? Do we need to think about I think you did put through a goodwill impairment maybe this time last year.
Yeah, we did.
Yeah. Is there ever a risk of an upgrade again or have we?
Yeah, look, our expectation is that earnings will grow in panels, John.
Yeah.
A lot of the work's been done over the last 12- 18 months. Unfortunately, as the market declined, we then also had part of the market for SLQ and then New Zealand, which is traditionally, well it is a stronger margin business, being soft. That's impacted the panels business. But a lot of the work's been done and our view is, yes, we will return to more profitable business over the next few years, John.
Got it. Moving on, JBS beat expectations, which is great. But what does that actually Can you give us a little bit of color on what that actually means? What are the metrics that you were impressed with, or what are the metrics that beat? And is there more, were there any learnings you took away from that business, and is there more available, and how much of an impact does that have on the group?
So, look, on the quantitative side, we did, and I do not have the numbers right in front of me. We did tell the market when we acquired that business, what we expected to achieve and then we have obviously earn-out targets, which we are on target to exceed. So that is from a quantitative side. From a qualitative side, Johns is a great business. Really, really strong customer relationships. We had our grand opening, in terms of ownership with Big River. A few months back, we had 43 customers turn up one morning for breakfast and the response from the customers and the relationship with the customers is very, very strong. The knowledge and the expertise from the team there is excellent. And their growth has been quite strong the last 12 months for us in W.A.
It is about getting staff in and being able to deliver in what is quite a strong market. The standard sort of integration issues, but I think we have managed that really well. Obviously, that is a family business, and moving into more of a corporate structure and corporate reporting is always a challenge. But the team there has done a really good job. The team within Big River has done a really good job. We have employed a new finance person to actually work with the team there, and we are employing a new operational head to actually work within the W.A. market and then integrate those a bit closer together in what is quite a sizable business. So, it is still early days. In my view, it takes a couple of years to really integrate these businesses. Obviously, we have changed the branding. We have JBS and co-branded it with Big River.
But the progress has been really good. The team there has done an excellent job and has integrated well.
Okay, good. Last one from me. In your commentary today on the call, you are incrementally comfortable on the growth profile. I know it is hard to talk about these sorts of things, but perhaps where are you spending your strategic time at the moment? It seems like JBS was a good acquisition. I am assuming there are a couple more of those floating around the nation. Is that a logical path, or do you have something more exciting up your sleeve?
Yes. Again, another good question. I think there's two parts. Firstly, we continue to look at value-accretive acquisitions to add to our business. We've got several that we're talking to as we speak, but these things take a while, and some of them have been in the pipeline for a while. Johns was in the pipeline for several years, as we spoke about previously. We will continue to look at those, and particularly looking at not just dots on the map, but areas where it can add to our competitive advantage and our capability in our group. That's going to continue. I did mention in terms of our growth ambition, we're not quite there yet.
While I'm really happy with us controlling everything we can control, the top line's not delivering enough growth, and we've done a lot of work at the back end to get the operating leverage. I think when those volumes come back, we will absolutely get more growth and multiples on the bottom line. But we need to deliver more growth on the top line. The market is looking a little bit patchy, and so we are accelerating some of our work in those key differentiated product categories that we believe we've got a right to win in. We talked about them, cladding, bespoke decorative panels, and plywood. We've employed a number of people, new people in our business in those areas. That's strategically important our next couple of years to deliver the growth in what will still be a patchy market in terms of delivery.
Got it. Thanks, John and John.
Thank you, John.
Yep.
Thank you. Next question comes from the line of Patrick Cockerill with Ord Minnett. Please go ahead.
Hey, John and John, can you hear me all right?
Yes, we can.
Just one question on my end, as most have kind of been answered. You have indicated double-digit growth into FY 2027, and you have done a great job over the last two years of achieving operating efficiencies. I guess, can you give us a little bit of color on where and how you are hoping to achieve these and more so, should we be thinking about this as more of a margin expansion story into 2027 and beyond?
Yeah, thank you, Patrick. Thank you for the question. Look, a couple of areas. Firstly, a good portion of that is obviously the full 12 months of Johns and the Western Australian growth. That will help us grow those EBITDA numbers close to double digits. On top of that, we have been accelerating some of those value-added products and those key segments we talked about, the cladding, the plywood, and the decorative panels. Over the last two years, we've launched quite a few new decorative panels, which are now starting to see growth. So we expect that to continue to grow over the next 12 months. Plywood is an area that we continue to see growth and is a very large market, and focusing on our differentiated plywood solutions, one we've got a right to win. We're a plywood manufacturer and have been doing it for 100 years.
And two, we've got the knowledge and the expertise in the market. So we believe that'll grow as well. And then thirdly, it's all the back-end work. So there's a mix, there's a pricing discipline, and the cost management we've been doing. That continues into this month. We believe it'll continue into the year. I still think the residential market will be difficult because in particular geographies, in particular Victoria, because we're struggling to actually deliver houses at the rate that are needed. So medium-term, I think that market looks great. We need to double down in the areas where we have that competitive advantage and grow share, and that's what we're doing, and that's where we believe we'll get growth next year.
Awesome. That was my only question. Thank you.
Thanks, Patrick.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. There are no further questions at this time. I will now hand back to Mr. Lorente for closing remarks.
Great. Thank you. Thank you all for jumping on the call. As usual, we will be doing an investor roadshow in early September. So please reach out if you have not already. We would love to meet. Thank you. Thanks for your time.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.