SIV Capital Limited reported a sharp increase in losses for the half-year ending December 2024 and remains suspended from ASX trading due to operational concerns. The company is exploring acquisitions to leverage substantial tax losses and restore market confidence.
- Half-year loss widened to $133,157 from $31,052 in prior period
- Company remains debt-free with $8 million in cash and net tangible assets per share rising slightly
- ASX suspended SIV Capital's securities due to inadequate operations under Listing Rule 12.1
- No dividends declared; company holds $66.1 million in carry-forward revenue tax losses
- Active evaluation of acquisition targets to utilize tax losses and access franking credits
Financial Performance Deteriorates
SIV Capital Limited has revealed a significant deterioration in its financial results for the half-year ended 31 December 2024, posting a statutory loss of $133,157 compared to a loss of $31,052 in the same period last year. Revenue declined by 13.8% to $315,318, reflecting ongoing challenges in generating sustainable income streams.
Despite the loss, the company remains debt-free, with liabilities limited to trade creditors and customer security bonds. Cash and cash equivalents increased to $8.02 million, supporting a net tangible asset per share of 17.25 cents, up from 16.70 cents a year earlier.
ASX Suspension Highlights Operational Concerns
In a critical development, SIV Capital's securities were suspended from trading on the ASX on 18 December 2024. The exchange cited inadequate operations as the basis for suspension under Listing Rule 12.1, signaling regulatory concerns about the company’s ability to meet listing requirements. The suspension remains in place pending satisfactory compliance and operational improvements.
The company has committed to ongoing disclosure to keep the market informed during the suspension period, underscoring the seriousness of the situation and the need for transparency.
Strategic Focus on Acquisitions and Tax Asset Utilization
SIV Capital holds substantial carry-forward tax losses, $66.1 million in revenue losses and $24.5 million in capital losses, which currently do not generate deferred tax assets on the balance sheet. The company’s strategy centers on identifying acquisition opportunities that meet ownership continuity requirements and demonstrate profitable growth potential. This approach aims to unlock the value of tax losses and franking credits, which currently stand at $21.6 million.
Cash flow from operating activities was positive at $268,000 for the half-year, supported by rental income, recovered bad debts, and an insurance payout, indicating some operational resilience despite the broader challenges.
Outlook and Governance
The board, led by Chairman Allan English AM, maintains a cautious but constructive outlook, affirming the company’s going concern status based on current cash flow forecasts. No dividends were declared or paid during the period, reflecting the company’s focus on stabilizing its financial position.
The independent auditor, Hall Chadwick QLD, issued an unqualified review report, confirming compliance with accounting standards and the Corporations Act, providing some assurance to stakeholders amid the company’s operational and regulatory hurdles.
Bottom Line?
SIV Capital’s path to reinstatement on the ASX hinges on strategic acquisitions and operational turnaround, with tax loss utilisation at the core of its recovery plan.
Questions in the middle?
- Which acquisition targets is SIV Capital considering, and how soon might deals materialize?
- What specific operational changes are required to satisfy ASX conditions for reinstatement?
- How will the company balance leveraging tax losses with restoring investor confidence and market liquidity?