Directa Plus (AIM: DCTA) just dropped its H1 FY25 trading update, and frankly, it’s a rather encouraging read. The graphene specialist isn’t just treading water; it’s showing tangible progress on both the top and bottom lines. Let’s unpack what matters.
Solid Growth & Sharper Cost Control Deliver Results
Based on unaudited figures for the six months to 30 June 2025, Directa Plus expects:
- Revenue Growth: Approximately €3.9 million, up a healthy 15% from H1 FY24’s €3.39 million.
- Dramatically Reduced Losses: EBITDA losses are expected to shrink by around 40% to roughly €1.0 million (down from €1.8 million in H1 FY24).
This isn’t accidental. Management explicitly links this performance to a disciplined strategy: focusing on higher-value contracts, stringent cost control, and operational efficiencies stemming from last year’s restructuring – particularly within its Italian operations and its environmental remediation subsidiary, Setcar. The Setcar overhaul is singled out as progressing well, creating a “more resilient and financially disciplined operation” and driving that significant year-on-year improvement.
Contract Momentum & Strategic Wins
Beyond the core numbers, the contract flow provides further evidence of traction:
- Key Renewals: Secured renewals with major clients across Environmental and Textiles divisions, including Grassi, MC Armor, Ford Otosan, Cummins, and Metchem.
- New Environmental Deals: Setcar landed an initial agreement with Midia International SA (potential value up to $1.5m) and a solid €1.59 million contract extension with OMV Petrom. This OMV Petrom deal, starting H2 FY25, specifically utilises Directa’s patented Grafysorber® technology for treating oil sludges and contaminated water – a core strength.
- US Market Entry: Signed a distribution agreement with a US agent, targeting the substantial environmental decontamination market stateside. This is a promising strategic step for geographic diversification.
Gearing Up for Broader Markets: The Production Upgrade
Perhaps the most strategically significant news is the impending completion (September 2025) of major upgrades to Directa’s production system. This isn’t just maintenance; it’s a capability leap:
- Expanded Product Range: For the first time, Directa will be able to produce nano-graphite and additives alongside its core graphene nanoplatelets (G+®).
- Massive Market Expansion: Accessing the high-volume nano-graphite market is projected to expand Directa’s addressable market volume by at least 10 times. This opens doors in high-growth sectors like elastomers, batteries, composites, paints, and cement.
- Enhanced Efficiency & Reliability: Increased automation and process control will boost production capacity, reliability, and consistency.
- Cost & Sustainability Win: A switch from argon to nitrogen gas as the primary production energy source is expected to deliver greater energy efficiency and cost savings – a clever bit of engineering with a green tint.
This upgrade is pivotal. It moves Directa beyond being solely a graphene player into a broader provider of advanced carbon materials, significantly increasing its potential customer base and revenue streams while strengthening relationships in its existing Environmental and Textile verticals.
Outlook: Confidence and Building Momentum
The tone from CEO Giulio Cesareo is one of justified confidence. He highlights the effectiveness of their strategy and cost discipline, pointing to a “significant and promising pipeline of opportunities” and anticipating stronger growth in H2 – a pattern they’ve seen before.
Crucially, the Board reaffirms its confidence in meeting market expectations for FY25 Adjusted LBITDA, which Directa notes is currently understood to be a loss of €1.7 million. Given the H1 loss reduction trajectory (€1.0m loss) and expected H2 growth, this seems a prudent and achievable target.
The Takeaway
Directa Plus’s H1 update paints a picture of a company executing its turnaround and growth plan effectively. The 15% revenue growth and 40% reduction in losses are clear markers of progress, driven by contract wins, cost discipline, and the ongoing Setcar restructuring. However, the real excitement lies ahead with the September production upgrade.
Adding nano-graphite and significantly broadening its market reach represents a potential step-change. If successfully commercialised, this could fundamentally alter Directa’s growth trajectory and scale. For now, the momentum is rebuilding, the cost base is leaner, and the path towards significantly reduced losses in FY25 appears on track. One to watch closely as those upgraded production lines come online and the new product capabilities hit the market.
Mark your diaries: The full unaudited H1 results are scheduled for release on 24 September 2025.
