Tasmanian premium food manufacturer Pure Foods Tasmania (ASX: PFT) says a year of restructuring and cost discipline is beginning to stabilise the business, with improved margins, expanding retail distribution and several months of positive operating cashflow recorded in the first half of FY26.
In commentary released alongside its half-year results, the company said its primary focus through FY25 and into FY26 has been rebuilding revenue while lowering its structural cost base following a major business realignment undertaken in 2024 and 2025.
The company reported several months of positive operating cashflow, positive EBITDA and improving gross profit margins in the seven months to 31 January 2026, reflecting the early impact of restructuring initiatives and stronger sales activity.
Executive chairman Malcolm McAully said the company had shifted from a growth-first strategy to a more disciplined operational model.
“We are now lean, aligned and disciplined. The business has been reshaped into a flexible and efficient manufacturing and distribution platform where incremental revenue can more directly improve profitability,” McAully said.
Loss reflects accounting adjustments
Despite the improving operational trends, Pure Foods reported a statutory net loss of $6.849 million for the half, partly reflecting a series of non-cash accounting adjustments including the write-back of deferred tax assets, asset write-offs and losses on asset disposals.
The half-year report also recorded a net operating cash outflow of $1.59 million, while some borrowings were reclassified as current following covenant breaches, prompting discussions with the company’s banking partner regarding refinancing arrangements.
However, management said detailed cashflow forecasts indicated the business remained viable as margin improvements and revenue growth continue.
Distribution gains support sales growth
Commercial momentum improved during the period, with the company securing several new retail and distribution wins. These include:
- New ranging with Costco Australia, covering Tasmanian pâté and Daly Potato products;
- national distribution expansion with Coles, increasing store coverage from around 300 stores to about 700; and
- a relaunch of the Tasmanian Pâté range in more than 70 Drakes Supermarkets stores across South Australia and Queensland.
Orders from a major retail customer for Easter 2026 were about 70 per cent higher than the previous year, representing an additional $150,000 in revenue.
Manufacturing efficiency and new revenue streams
Operational changes were also implemented to improve manufacturing efficiency.
The company completed consolidation of manufacturing facilities during the six months to 31 December, which it expects will deliver around $200,000 in annual savings.
Pure Foods also secured a contract packing agreement with premium seafood providore Brilliant Foods, aimed at lifting factory utilisation and adding incremental revenue.
Ice cream division launched
During the period the company completed the acquisition of premium ice cream brand Elato, establishing a new Ice Cream Division that will combine the Elato brand with Pure Foods’ existing Cashew Creamery range.
Elato founder Roz Kaldor-Aroni has been appointed general manager of the division, which will focus on national distribution expansion, product innovation and contract manufacturing opportunities.
The company said it had taken steps to strengthen its capital position, including raising approximately $1.75 million in new capital and reducing total borrowings by around $2.5 million over the past 12 months.
Outlook
Pure Foods said it entered the second half of FY26 with improved operational leverage, expanding retailer relationships and a lower cost base.
Management expects continued revenue growth across core categories, supported by new retail listings, contract manufacturing activity and the rollout of the Elato brand.
The company said the structural changes undertaken over the past year had positioned the business to convert sales growth into sustainable profitability as scale increases.
