STERLING GP-NEW (ASX: 01825) has issued a profit warning to the market. According to a preliminary review of the company's unaudited consolidated management accounts for the year ending March 31, 2026, the group anticipates reporting a substantial consolidated net loss.

The projected loss for the period is estimated to be between approximately HK$59.2 million and HK$65.4 million. This represents a significant deterioration from the consolidated net loss of about HK$6.1 million recorded for the previous financial year ending March 31, 2025.

The company has attributed this major increase in the expected net loss primarily to two key factors when compared to the prior year. Firstly, the group's gross profit decreased by roughly HK$31.6 million. This decline was driven by a reduction in revenue and a contraction in the gross profit margin during the year.

The second contributing factor is a notable rise of approximately HK$25.7 million in the expected credit loss provisions for the period. These provisions relate to the group's trade receivables, loans receivable, and other amounts owed to it.