Grand Banks investment cycle weighs on FY2026 profit
Grand Banks reported revenue of S$173.2m (US$135.6m) for FY2026. Image courtesy of Grand Banks Yachts
Malaysian boatbuilder Grand Banks Yachts’ two-year investment programme is largely complete, with the company reporting higher revenue but lower profit for FY2026 as increased operating costs and capital spending affected its financial performance.
The firm revealed the latest insights in its 2026 annual report, published on 30 September.
Financial updates published earlier in September show revenue for the year ended 30 June 2026 rose 6.7 per cent to S$173.2m from S$162.3m in FY2025. The increase was driven by accelerated construction of new boats, although this was partly offset by lower revenue from trade-in and pre-owned boats.
Despite the higher revenue, net profit after tax fell to S$13.4m from S$18.2m. Profit before tax declined to S$18.0m from S$25.5m.
Operating expenses increased from S$23.9m to S$29.7m. The rise reflected higher headcount and payroll costs, depreciation, brokers’ commissions and marketing expenditure, with Grand Banks also increasing its participation in international boat shows.
The company attended four shows in Europe during FY2026, compared with one in FY2025.
Chairman Basil Chan says Grand Banks has largely completed the deliberate investment cycle that began in FY2025. Spending during the two-year period has expanded its manufacturing facilities and US property portfolio, while also supporting new product development and the company’s return to Europe.
CEO and executive director Mark J Richards confirms in the annual report that the major phase of the investment programme is also largely complete.
“Today, I am proud to report that the major phase of that investment programme is largely complete,” he says. The investment’s impact is reflected in the company’s balance sheet. Non-current assets increased to S$110.6m at the end of FY2026, compared with S$81.8m a year earlier.
Investment also affected cash flow during the year. Cash flow used in operating activities was S$0.5m, compared with S$31.2m generated in FY2025. Grand Banks attributes the change mainly to increases in inventories and contract assets and a reduction in contract liabilities, partly offset by higher trade and other payables.
Cash flows used in investing activities rose to S$29.5m from S$17.3m. The expenditure covered improvements to properties and facilities in the US and Pasir Gudang, Malaysia, new product development and enhancements to Palm Beach XI.
Margins improve in second half
The full-year gross profit margin declined to 27.8 per cent from 29.9 per cent, while gross profit was broadly unchanged at S$48.1m compared with S$48.5m in FY2025.
Grand Banks attributes the lower full-year margin to reduced margins on new-boat revenue, partly as a result of unfavourable foreign exchange movements.
The second half presented a different picture. Gross profit margin strengthened to 30.0 per cent from 28.1 per cent in the second half of FY2025. Richards says the improvement followed a softer first half, while the company also points to the accelerated construction of new boats as evidence of improved manufacturing efficiency.
The improvement in the second half means the full-year figures do not reflect the margin performance seen towards the end of the financial year.
Grand Banks’ net order book stood at S$136.4m at 30 June 2026, compared with S$156.6m a year earlier. The order book comprised 18 new boat orders, including larger models, and nine trade-in and pre-owned boat orders. The company says the average value of its new boat orders was higher than in FY2025.
Three new models were launched during the year: the Palm Beach 107, Grand Banks 73 and Palm Beach GT70. All secured pre-orders. Grand Banks also updated the GT50RS Outboard and Palm Beach 85 Skylounge.
The company’s investment programme included new equipment and machinery at its Pasir Gudang manufacturing facility. In Newport, Rhode Island, 11 waterfront apartments were completed, the Owners’ Club was refurbished and work began to reconfigure the marina for larger vessels. Grand Banks also expanded berthing and service capacity at Stuart, Florida, and opened a sales and service office in California.
In Europe, the company established a marketing office in Sanremo, Italy, with three demonstration boats.
The company also acquired the 100-foot Palm Beach XI in October 2025, which Richards describes as a marketing and technology platform. Development work on the vessel forms part of the investment expenditure reported for FY2026.
With the main investment phase now largely complete, Grand Banks expects capital expenditure to moderate in FY2027. Chan says the enlarged facilities are positioned to generate recurring revenue from service, berthing, storage and brokerage.
The company says demand remains resilient in the US, while it is seeing early signs of recovery in Europe. It also expects to operate against higher costs and continued geopolitical and tariff uncertainty.
The GB Yachts Group manufactures yachts under the Grand Banks, Eastbay and Palm Beach brands at its manufacturing yard in Pasir Gudang, Johor, Malaysia.
