IPS Securex Holdings Limited 1H-2026 Financial Results: Strong Revenue Surge but Challenges Remain

IPS Securex Holdings Limited (the “Group”) delivered its condensed interim financial statements for the six months ended 31 December 2025, highlighting a strong rebound in revenue and a return to profitability. Below, we break down the performance, trends, key financial metrics, and other notable disclosures.

Key Financial Metrics and Comparative Analysis

Historical Performance Trends

The Group reported a dramatic turnaround from a net loss of S\$0.83 million in 1H-2025 to a net profit of S\$0.30 million in 1H-2026. The key driver was a substantial 93.5% increase in revenue, mainly from accelerated project execution in the Security Solutions Business segment, offset by a decline in the Maintenance and Leasing Business. Gross profit also improved significantly year-on-year, but gross margin fell slightly due to the lower contribution from higher-margin maintenance services.

Segmental Performance

• Security Solutions Business: Revenue surged by 163.1% YoY to S\$8.88 million, led by project execution in Singapore and higher product sales. This offset declines in other markets.
• Maintenance and Leasing Business: Revenue dropped 42.6% YoY to S\$1.0 million, attributed to non-renewal of customer contracts and a decrease in fault-related service activities.

Other Notable Financial Items

• Administrative Expenses: Increased 15.9% YoY due to higher headcount and project-related staff costs.
• Finance Costs: Rose by 144.9% YoY mainly due to higher utilization of trade financing facilities and increased foreign exchange loss.
• Other Income: Decreased 49.6% YoY due to lower government grants and subsidies.
• Dividend: No interim dividend declared for the period, consistent with the prior year. The Group cited a prudent approach to cash retention.
• Related Party Transactions: S\$52,272 was paid for group services (finance and HR) to IPS Group Pte. Ltd. Other related party transactions were below S\$100,000 in value.

Balance Sheet Highlights

• Current Assets: Increased by S\$2.6 million to S\$11.5 million, primarily due to higher inventories (up S\$1.2 million), trade and other receivables (up S\$1.3 million), and restricted fixed deposits (up S\$0.6 million), partially offset by a S\$0.8 million decrease in cash and cash equivalents.
• Current Liabilities: Rose by S\$3.6 million to S\$7.3 million, driven by higher contract liabilities and trade payables.
• Capital and Reserves: Increased by S\$0.3 million to S\$5.9 million, mainly due to the net profit for the period.

Unusual Items and Exceptional Events

• No exceptional income or expenses were reported. All accounting policies and estimates were consistent with prior periods.
• No asset revaluations, divestments, IPOs, or fundraising activities occurred during the period.
• No dilution, share buybacks, or placements took place.
• No legal disputes, natural disasters, or material policy/tax changes were disclosed.

Chairman’s Statement

“The Group recorded a net profit after tax in 1H-2026, mainly attributable to higher revenue from the provision of integrated security solutions in Singapore. This increase was driven by accelerated project execution in line with customers’ schedules, as well as higher sales of security products during the period. The Group benefited from timely project mobilisation, effective execution capabilities, and its ability to deliver integrated solutions across multiple security domains.

Revenue from the Maintenance and Leasing Business was lower during the period, primarily due to reduced demand for maintenance support services in Singapore. This was largely attributable to the non-renewal of certain customer contracts and a decline in fault-related service activities. The Group continues to monitor this segment closely and is reviewing its service offerings, contract structures, and pricing strategies to enhance competitiveness and improve long-term sustainability of recurring revenue streams.

Looking ahead, the Group expects demand for integrated security solutions to remain stable over the next reporting period and the next 12 months, supported by ongoing investments in critical infrastructure, transportation, data centres, and public-sector facilities. Customers are increasingly seeking end-to-end, multi-system solutions with stronger integration, and lifecycle support, which aligns with the Group’s core capabilities.

However, the industry remains highly competitive, with pricing pressure arising from increased competition, evolving customer procurement practices, and cost sensitivity. The Group also faces potential challenges from rising manpower costs, supply-chain constraints, and project execution risks associated with large and complex contracts. In addition, delays in project awards, changes in customer timelines, or further non-renewal of maintenance contracts may impact short-term revenue visibility.

Notwithstanding these challenges, the Group remains cautiously optimistic. It will continue to focus on disciplined project execution, selective bidding, cost management, and strengthening its solution and service offerings. The Group will also actively pursue opportunities to rebalance its revenue mix, enhance operational efficiency, and build longer-term customer relationships to support sustainable growth over the coming periods.”

Tone: The Chairman’s statement adopts a cautiously optimistic tone, acknowledging strong operational execution but warning of industry headwinds and competitive pressures.

Conclusion and Investor Recommendation

Overall Assessment: The Group’s financial performance in 1H-2026 is strong compared to the prior period, with a significant turnaround to profitability and a near doubling of revenue. The Security Solutions Business is the growth driver, but the Maintenance and Leasing segment remains weak. Margins have contracted slightly, and finance costs are higher. The outlook is stable but not without risks, particularly around pricing pressures, manpower costs, and project execution challenges.

Investor Recommendations

• If you currently hold the stock: Consider maintaining your position. The Group has returned to profitability and revenue momentum is strong. However, remain vigilant for future updates, especially regarding margin trends, contract renewals, and cost control. If the company can sustain growth in its core business and address weaknesses in recurring revenue, further upside is possible.
• If you do not currently hold the stock: Exercise caution. While the turnaround is notable and the outlook stable, competitive pressures and the absence of dividends may limit short-term upside. Consider waiting for evidence of sustained profitability and improvement in recurring revenue before initiating a position.

Disclaimer: This analysis is based strictly on data provided in the company’s interim financial report and does not constitute investment advice. Investors should conduct their own research and consider their risk profiles before making investment decisions.

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