Coventry Group (ASX:CYG) reported improved trading performance for the first half of FY26, posting unaudited sales of $188.5 million and EBITDA of $3.2 million, compared with $179.4 million in sales and $2.4 million in EBITDA in the previous half.
Group sales increased 5.1%, driven by a 6.6% rise in trade distribution revenue to $112.4 million and a 2.7% increase in Fluid Systems sales to $76.1 million.
EBITDA rose 33.3%, reflecting early progress from the company's "back to basics" operational improvement program.
The company said sales momentum strengthened during the second quarter, although this was partly offset by a decline in gross margins, investment in new branch openings and a one-off cost associated with the relocation of the Fluid Systems business' largest branch in Mackay, Queensland.
Coventry added that its cost-out program has delivered approximately $5.1 million in annualised savings to date and is continuing to ramp up.
As a result, the group said it remains optimistic about achieving improved earnings performance in the second half of FY26 as benefits from sales, margin and cost initiatives are progressively realised.
Net debt and working capital were managed broadly in line with plan, with the company retaining sufficient liquidity and ongoing bank support.
Coventry confirmed the board has commenced a strategic review of the group’s business portfolio following unsolicited third-party approaches regarding individual business units.
Allier Capital has been appointed corporate adviser and Talbot Sayer legal adviser. In light of the review, Coventry has withdrawn its FY26 earnings guidance.