Korvest Ltd Reports 8.3% Revenue Increase to $129.54 Million Fueled by Data Centre Growth and Industrial Products Expansion

Industrial Products Segment and Data Centre Demand Drive Revenue Growth

Korvest achieved $129.54 million in revenue from trading activities in FY26, an 8.3% increase over the prior year. This growth was primarily fueled by increased activity in the day-to-day and small project markets within the industrial products segment, which supplies EzyStrut cable and pipe support products to major infrastructure projects as well as electrical wholesalers and contractors handling smaller industrial jobs. The smaller project market showed notable strength throughout the year, while the day-to-day market improved steadily, supported by positive impacts from data centre development across both segments.

The industrial products segment’s performance mirrors broader infrastructure and construction market trends in Australia. EzyStrut’s diverse product range meets demand from both large-scale projects and fragmented contractor and wholesale markets. The improved second-half performance across all states highlights geographic diversification of demand, indicating that revenue growth was systemic rather than concentrated in any single region or segment.

Galvanising Plant Sets Processing Records Amid Equipment Upgrades

Korvest’s galvanising facility processed record tonnes in FY26, both internally and externally. External volume growth was driven by strength in the South Australian steel fabricators market and completion of a second major renewable energy project, following a similar project delivered in FY25. This dual internal and external processing demonstrates the company’s multi-revenue production model.

During the Christmas shutdown, Korvest completed significant capital maintenance, including replacing the galvanising kettle and upgrading the burner management system ahead of schedule. The burner system upgrade improved gas consumption efficiency on a volume-adjusted basis, enhancing production efficiency and reducing per-unit energy costs in the high-temperature galvanising process. These investments ensure the facility maintains capacity leadership while optimizing operational costs.

Record Capital Investment Expands Manufacturing Footprint

In FY26, Korvest executed its largest capital investment programme ever, highlighted by construction of a new 3,500 square metre factory at the Kilburn site. Construction began in October 2025 and finished in July 2026, several weeks ahead of schedule and within budget. This expansion significantly increases manufacturing capacity at Korvest’s primary production location, enabling the company to meet growing product demand without capacity constraints.

Additional machinery including roll formers, laser cutters, and weld bays will be commissioned at the new Kilburn facility in the first half of FY27, adding substantial capacity. The Industrial Products segment also expanded geographically, relocating Queensland and Western Australian EzyStrut branches to larger warehouses during FY26. In June 2026, EzyStrut expanded warehouse capacity in New South Wales to support the booming data centre construction market in the Eastern states, reflecting strategic alignment with market demand.

Data Centre Construction Bolsters Multi-Segment Growth

Data centre development emerged as a key growth driver for Korvest’s products and services across multiple segments. It positively influenced both day-to-day and small project markets within the industrial products segment during FY26. This demand was significant enough to shape capital allocation decisions, including the expansion of EzyStrut’s NSW warehouse capacity in June 2026 to serve the ongoing data centre boom in Australia’s Eastern states.

The surge in data centre infrastructure creates demand for cable and pipe support systems supplied by EzyStrut, as well as fabrication and processing services leveraging Korvest’s manufacturing capabilities. The NSW warehouse expansion underscores management’s confidence in the sustainability of this demand. Beyond data centres, a robust pipeline of road and rail tunnel infrastructure projects further supports a positive outlook for the broader infrastructure sector, positioning Korvest to benefit from multiple concurrent development cycles across Australia.

Active Project Pipeline and Major Contract Cycles in Industrial Products Segment

Korvest’s Industrial Products segment managed an active project pipeline driven by contracts with major infrastructure developers. Four major projects concluded in FY26, with most supply delivered in prior years. Two major projects began supply in the first half, and three additional major projects started in the second half. This staggered project activity reflects timing variations in commencement, peak delivery, and completion phases.

The company enters FY27 with four ongoing major projects scheduled for supply, providing forward revenue visibility. Combined with record work on hand, this pipeline supports sustained elevated activity into FY27, underpinning management’s confidence in the transition to the new financial year.

Cost Management, Pricing Adjustments, and Branch Network Growth

Key input costs such as steel remained relatively stable in FY26, although global events caused variable impacts on freight and logistics expenses. Korvest’s branch network expansion to larger facilities led to increased rents and one-off relocation costs. Staffing levels rose to support higher activity and improve customer service. To offset inflationary pressures, product pricing was adjusted late in FY26, reflecting disciplined margin management.

The branch expansion strategy aligns with management’s view that growth in EzyStrut distribution requires larger warehouses near customer hubs. Relocations in Queensland, Western Australia, and New South Wales involved significant capital and operational costs. By staging expansions and targeting growth regions like data centre zones, Korvest aims to align infrastructure with market opportunities while maintaining service continuity.

Settlement of Third-Party Design Fault and FY27 Income Recognition

The Industrial Products segment incurred $566,000 in final remediation costs in FY26 related to a third-party design fault, adding to $869,000 previously spent, totaling $1.435 million. Settlement negotiations concluded in July 2026 with a pragmatic $1.1 million agreement, representing partial cost recovery. Korvest will record the settlement as other income in FY27. This issue highlights supply chain and design quality risks inherent in engineered product provision for major infrastructure projects.

The settlement removes a contingent liability from Korvest’s balance sheet and provides clarity on total economic loss. Recognition of settlement income in FY27 will benefit that year’s results. The matter underscores the importance of quality control, design verification, and contractual protections with third-party suppliers, especially where defects affect multiple installations requiring remediation.

Dividend Declaration and Shareholder Returns for FY26

Korvest’s board declared a fully franked final dividend of 40.0 cents per share for FY26, consistent with the prior year’s final dividend though FY25 included an additional 10.0 cents special dividend. The interim dividend was 25.0 cents per share, bringing total ordinary dividends for FY26 to 65.0 cents per share. The Dividend Reinvestment Plan (DRP) will apply to the final dividend, with shares issued at a 5% discount to the volume weighted average market price from 3 to 9 September 2026.

The final dividend will be paid on 25 September 2026 to shareholders on the record date of 4 September 2026. Maintaining the 40.0 cents final dividend despite the absence of a special dividend reflects confidence in the company’s earnings capacity. The DRP offers shareholders the option to reinvest dividends at a discount, supporting capital management and investment flexibility.

Positive Outlook and Record Work on Hand Entering FY27

Korvest’s outlook for FY27 is underpinned by strengthening demand across multiple sales channels. The day-to-day and small project markets grew in FY26, with a strong second-half finish. As a result, the company enters FY27 with record work on hand, providing forward revenue visibility and operational continuity. This elevated backlog signals positive revenue trends and efficient utilization of expanded manufacturing capacity.

Ongoing strength in day-to-day markets is expected alongside a robust infrastructure sector outlook, supported by a pipeline of road and rail tunnel projects. The substantial data centre construction activity continues to drive demand, particularly following recent warehouse expansions in key markets. An update on trading conditions will be provided at Korvest’s Annual General Meeting, allowing shareholders to assess early FY27 performance. The combination of record backlog, completed capacity expansion, and favorable market conditions positions Korvest to sustain momentum beyond the current reporting period.