FY25 in focus: Revenue dip, a statutory loss, and a pipeline pointing up
RC Fornax has posted its first full-year results on AIM for the year ended 31 August 2025, and they are a tale of two halves. The near-term took a knock from the UK Government’s Strategic Defence Review (SDR), which slowed procurement decisions. The longer-term, however, looks more constructive, with new frameworks, growing order visibility, and the company’s SME Procure platform moving towards commercialisation in FY26.
Headline numbers: revenue fell to £4.1 million, gross profit landed at £1.0 million, and the company reported an adjusted loss before tax of £1.6 million. The balance sheet is stronger post-IPO, and post-period fundraising has further bolstered liquidity heading into FY26.
What actually happened in FY25
The SDR, published in June 2025, introduced 62 recommendations and refocused the UK on war-fighting readiness. In plain English, buyers paused while priorities were reset. That pause hit RC Fornax’s conversion of bids and call-offs across programmes, dragging FY25 revenue to £4.1 million (FY24: £6.4 million) and pushing the business to an adjusted loss before tax of £1.6 million (FY24: £0.5 million profit, adjusted).
On the positive side, gross margin held at approximately 24%, which is respectable given the backdrop. Costs rose as the company invested for scale – administrative expenses increased to £2.3 million (FY24: £0.8 million) due to hiring, recruitment, IPO costs and organisational changes. The AIM admission in February 2025 brought in £3.4 million in net proceeds, funding a new secure Bristol HQ and technology development.
Key numbers at a glance
| Metric | FY25 | FY24 |
|---|---|---|
| Revenue | £4.1 million | £6.4 million |
| Gross profit | £1.0 million | £1.6 million |
| Gross margin | ~24% | ~24% |
| Adjusted profit/(loss) before tax | £1.6 million loss | £0.5 million profit |
| Administrative expenses | £2.3 million | £0.8 million |
| Year-end cash | £0.9 million | £0.6 million |
| Net assets | £1.9 million | £48,000 |
| Operating cash flow | £1.8 million outflow | £0.3 million inflow |
Order book and FY26 visibility: £4.5 million in sight
The post-period picture is brighter. In the first half of FY26, RC Fornax booked £4.3 million in new orders and extensions. By the end of January 2026, the company had invoiced £1.7 million and held a further £2.4 million of contracted orders for the rest of FY26.
On top of that, there is £0.6 million of orders subject to contract, with £0.4 million expected to convert into FY26 sales. Management therefore flags firm visibility over £4.5 million of FY26 sales heading into the second half. The task now is execution and conversion speed.
Strategy in action: frameworks, primes and SME Procure
RC Fornax is operating across seven procurement frameworks and has generated 20+ bid opportunities since April 2025. The company is in advanced discussions on three major agreements, including two with defence primes covering land and maritime programmes. In January 2026 it was accepted by the Aurora Engineering Partnership as a Specialist Provider on Evolve – a major UK defence engineering framework.
SME Procure, the in-house platform aimed at digitising and streamlining SME engagement with defence procurement, progressed in FY25. It uses AI-driven tools to generate scopes of work, assemble teams and connect SMEs with buyers. Commercialisation is targeted in FY26, and if uptake is solid, it could improve margins and add operational leverage.
Diversification beyond core defence
RC Fornax is nudging beyond UK defence into adjacent markets. A UK Public Sector Space Client contract award was announced on 25 November 2025, which broadens the addressable market and reduces single-sector dependency. This matters if DIP timing drags.
Balance sheet and cash: IPO firepower and a late-2025 top-up
At 31 August 2025, cash stood at £0.9 million, after investing in the new Bristol headquarters (MoD secure standard, capacity to scale to 50 staff). Post period, the company raised £2.1 million net, strengthening liquidity for FY26 delivery. Net assets increased to £1.9 million, supported by £3.3 million of share premium from the IPO.
Cash flow was the weak spot in FY25. Operating activities saw a £1.8 million outflow, while investing cash outflow was £0.9 million, primarily HQ fit-out and right-of-use assets under IFRS 16. Financing provided a £3.0 million inflow, largely from the share issue, partly offset by pre-IPO dividends.
Context and jargon check
- AIM is London’s market for growth companies. RC Fornax joined in February 2025.
- SDR is the Strategic Defence Review, published June 2025. It reshaped priorities and created short-term procurement delays.
- DIP is the Defence Investment Plan. It has been delayed, which is still affecting the timing of programme awards.
- Frameworks are pre-approved supplier lists. Being on them can speed awards, but revenues only arrive once work is called off.
Why this matters for investors
The setup for FY26 is more encouraging than the FY25 P&L suggests. The company has tangible sales visibility, a strengthening framework position, and a product bet in SME Procure that, if it lands, could lift margins. The acceptance onto Aurora’s Evolve network and active talks with primes are meaningful credibility markers in defence delivery.
The macro backdrop is also supportive. UK defence spending is projected to rise to 2.5% of GDP by 2027 – an estimated £13.4 billion uplift – which should increase volumes across the ecosystem. RC Fornax’s pitch is outcomes-led engineering and procurement support that helps customers do more with constrained budgets. In today’s funding environment, that is the right side of the value proposition.
Risks and watchpoints
- DIP timing risk: the delay continues to slow award decisions, which can defer revenue and stretch working capital.
- Conversion risk: being on seven frameworks is useful, but investors need to see faster conversion of bids and “advanced discussions” into signed work and cash receipts.
- Cost base: admin costs stepped up to £2.3 million. Profitability requires scaling revenue through this fixed-cost layer.
- Cash discipline: year-end cash was £0.9 million, supplemented by a £2.1 million post-period raise. Execution against the £4.5 million FY26 sales visibility is key to sustaining liquidity.
My take: cautiously optimistic as the gears start turning
FY25 shows the bruises from a sector-wide pause, but RC Fornax exits the year with stronger fundamentals: more frameworks, deeper prime engagement, a secure HQ that can scale, and a platform play in SME Procure. The first-half FY26 orders and invoicing data point to momentum building.
The investment case now hinges on three things: closing the three major agreements, commercialising SME Procure in FY26 to lift margins, and keeping a tight grip on costs while revenue ramps. If those pieces fall into place and the DIP cloud lifts, a return to growth – and then profitability – looks achievable.
What to watch next
- Signed contracts from the three “advanced discussions” and any Aurora Evolve taskings.
- Quarterly progress against the £4.5 million FY26 sales visibility and cash conversion.
- SME Procure commercial launches, user adoption, and early-margin impact.
- Any further diversification wins like the UK Public Sector Space Client award.
Source
Full details are in the company’s Annual Report and Accounts available here: RC Fornax financial reports.
