PPK Group (ASX: PPK) has entered a conditional agreement to sell its 39.85% stake in Craig International Ballistics (CIB), held through subsidiary BNNT Ballistics Pty Ltd, to Mehler Vario Systems GmbH.
The binding, conditional sale and purchase agreement outlines potential proceeds of up to A$33.43 million that comprises a headline purchase price of A$27.45 million, with a potential earn-out component capped at A$5.98 million.
The earn-out is contingent on CIB achieving an 'Average Adjusted Recurring EBITDA' greater than A$12.0 million per year over calendar years 2026 and 2027, payable in Quarter 2 of calendar year 2028.
PPK Group expects to utilise A$2.0 million of the cash proceeds at completion to repay a third-party loan, which is currently secured over a portion of PPK's stake in CIB.
CIB previously secured a significant A$30 million contract with the Australian government for body armour supply.
PowerPlus Energy Secures Grant
In related news, PowerPlus Energy (PPE), a subsidiary of PPK Group in which it holds a 75.4% interest, has received a A$2.3 million ARENA (Australian Renewable Energy Agency) grant under its Battery Breakthrough Initiative.
This initiative aims to semi-automate and expand the local battery module manufacturing capacity at its Melbourne facility.
The grant will support PPE's broader A$6.7 million project targeting a substantial three-fold scale-up of its manufacturing capacity over the next two years.
This expansion is designed to achieve an annual output of up to 150 MWh of battery modules.
Financial and Operational Updates
PPK Group’s half-year results for HY26, ending 31 December 2025, showed a statutory profit attributable to owners of A$10.5 million.
This profit was primarily driven by non-cash accounting items, including a deconsolidation gain related to White Graphene Ltd (WGL) and a partial reversal of a prior impairment on Li-S Energy (LIS).
Despite the statutory profit, the underlying (non-IFRS) group results for HY26 reflected a loss before tax of A$1.8 million.
Operational highlights included Craig International Ballistics maintaining a strong order book across FY26 and FY27.
Li-S Energy also made technical progress, including commissioning Australia’s first lithium metal foil production line, and secured a A$7.8 million ARENA grant in FY25 to support further development.
Strategic Review and Portfolio Management
PPK Group is continuing its strategic review and portfolio monetisation program, actively repositioning its focus towards growth-stage investments.
The company targets innovative businesses with Australian sovereign manufacturing capabilities across key sectors.
These core areas include energy storage, armour protection, and advanced nanomaterials.
Recent portfolio management actions have involved the divestment of Australian Mine and Road Group and the deconsolidation of Li-S Energy and White Graphene, aiming to simplify the group structure.
