Power Probe (AIM:PWR) reported revenue of $17.7 million for the six months to 30 June, down from $21.2 million a year earlier, as the automotive electrical diagnostic tools maker said full-year sales would be weighted toward the second half.
Gross margin rose sharply to 50.4% from 40.8% in the prior-year period, which the group attributed to a growing mix of Power Probe branded products, a shift toward higher-margin private brands business, and pricing initiatives introduced during the year.
Earnings (adjusted EBITDA) fell to $3.8 million from $5.5 million, with the margin easing to 21.7% from 26.1%; stripping out roughly $0.6 million of additional public company costs not incurred a year earlier, the adjusted EBITDA margin would have been 24.8%.
Power Probe branded product revenue held broadly steady at $16.2 million, while private brands revenue fell to $1.5 million from $3.3 million as the group deliberately exited lower-margin legacy accounts in favour of more specialised aftermarket products.
Cash stood at $13.0 million at period end, down from $15.3 million at the end of December, after the group paid $1.6 million in dividends and invested $0.4 million in property, plant and equipment. The board declared an interim dividend of 2.16 cents per share, with an ex-dividend date of 24 September.
"We remain confident in our strategy and believe the investments and initiatives underway provide a strong platform for growth through the second half of 2026, into FY27 and beyond," said chief executive Chema Garcia.
The group said significant products launched late in the first half are expected to contribute materially to second-half revenue, alongside continued investment in its new US manufacturing facility in Charlotte, North Carolina.
News Intelligence what this means for the company
Power Probe's H1 revenue fell 16% to $17.7m, but gross margin jumped 950 basis points to 50.4%, driven by a shift toward higher-margin Power Probe branded products and pricing actions. The revenue decline reflects deliberate timing—management attributes it to new product launches weighted toward H2, with significant launches late in H1 expected to drive material second-half contribution. Adjusted EBITDA fell to $3.8m (21.7% margin), though stripping out ~$0.6m in incremental public company costs yields a 24.8% margin, suggesting operational leverage remains intact beneath the headline decline.
The margin expansion and product mix shift toward higher-margin offerings suggest improving unit economics, but the H1 revenue decline and lower absolute EBITDA mean near-term cash generation has slowed. The investment thesis now hinges on whether H2 product launches and the Charlotte manufacturing facility ramp deliver the material revenue uplift management expects, and whether the company can sustain the 50%+ gross margin as volume scales.
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