Microequities Asset Management Group Limited reported a 19.3% rise in net profit for FY25, driven by strong fund performance and a surge in performance fees, while declaring a fully franked final dividend of 2.0 cents per share.
- 19.3% increase in profit after tax to $7.15 million
- 5% growth in recurring revenue and 222% surge in performance fees
- Funds under management slightly down 1% to $607.9 million
- Final fully franked dividend declared at 2.0 cents per share
- Launch of corporate private credit SPV diversifies product suite
Strong Financial Performance Amid Market Challenges
Microequities Asset Management Group Limited has reported a robust financial year ended 30 June 2025, with profit after tax rising 19.3% to $7.15 million. This growth was underpinned by a 5% increase in recurring revenue to $10.7 million and a remarkable 222% jump in performance fees, reflecting the company's ability to generate value from its investment strategies despite a slight 1% decline in funds under management (FUM) to $607.9 million.
Fund Performance and Strategic Diversification
The company’s flagship Global Value Microcap Fund delivered an exceptional net return of 25.9% for the year, with a three-year compound annual return of 19.8% net of fees. Additionally, the ESG-focused Value Earth Fund debuted strongly, achieving a 14.1% return while adhering to its sustainability mandate. These results highlight Microequities’ investment management depth and its successful leveraging of intellectual property across diverse strategies beyond its traditional Australian microcap focus.
In a strategic move to broaden its product offering, Microequities launched its first corporate private credit special purpose vehicle (SPV) early in FY26, which was fully subscribed within six days. This new product aims to provide clients with attractive risk-adjusted returns and marks a significant step in diversifying the company’s revenue streams beyond listed equities.
Balance Sheet Strength and Dividend Policy
The Group’s balance sheet strengthened with net tangible assets increasing to $23.4 million, supported by $21.9 million in financial assets and a net cash position of $4.8 million. Reflecting confidence in its financial position and future prospects, the Board declared a fully franked final dividend of 2.0 cents per share, payable on 22 September 2025, bringing the total dividend for FY25 to 3.9 cents per share.
Outlook and Governance
Looking ahead, Microequities maintains a positive outlook for FY26, anticipating additional performance fees driven by strong portfolio fundamentals and valuation uplifts. The company also continues to invest in business development and client relationship management, with early signs of improved inflows in core and satellite strategies.
Governance remains a priority, with the Board and management committed to ethical practices and compliance with evolving regulatory requirements, including upcoming sustainability reporting standards effective from FY28. The financial statements received an unmodified audit opinion from BDO Audit Pty Ltd, underscoring the integrity of the reported results.
Bottom Line?
Microequities’ solid FY25 results and strategic diversification set the stage for growth, but investors will watch closely how new credit products and market conditions shape future performance.
Questions in the middle?
- How will the newly launched corporate private credit SPV impact revenue diversification and risk profile?
- What are the prospects for performance fees in FY26 given market volatility and fund valuations?
- How will upcoming sustainability reporting requirements affect operational and compliance costs?