Progressive P (ASX: 01581) has issued a profit alert, forecasting a net profit for the fiscal year ending March 31, 2026, in the range of approximately HK$18 million to HK$21 million.

This projected figure represents a significant decline compared to the net profit of about HK$34.1 million recorded for the previous fiscal year ended March 31, 2025.

Reasons for the Expected Profit Decrease

The company attributes the anticipated drop in profitability for the current year to several key factors.

Firstly, revenue for the year is expected to decrease by approximately 8% compared to the roughly HK$914 million reported for the year ended March 31, 2025.

This decline is primarily due to reduced activity in construction works and construction machinery leasing, particularly for projects related to the Hong Kong International Airport's Three-Runway System and the Kai Tak Sports Park, which have passed their peak construction phases.

A generally sluggish construction market during the year has also contributed to the lower revenue.

Secondly, the company's gross profit margin has come under pressure.

This is attributed to lower margins on newly awarded contracts due to intense market competition, as well as additional completion and finishing costs incurred during the final stages of certain projects.

These negative impacts have been partially offset by an increase in other income of approximately HK$12.2 million.

This increase is mainly due to gains from the disposal of property, plant, and equipment during the year.