Rising Debt and Integration Risks Shadow HMC Capital’s Record Profit

Record Financial Performance

HMC Capital Limited has delivered a standout financial year ending 30 June 2025, posting a statutory profit after tax of $265.2 million, a remarkable 132% increase from the previous year. Revenue from ordinary activities surged 151% to $234.2 million, reflecting the company’s successful expansion and diversification strategy.

Underlying operating earnings before tax rose 74% to $224.6 million, underscoring the strength of the company’s core funds management operations. This robust financial performance was accompanied by a maintained dividend payout of 6.0 cents per share, signaling confidence in sustainable shareholder returns.

Strategic Acquisitions Fuel Growth

During the year, HMC Capital completed key acquisitions that have broadened its asset management platform. The purchase of Payton Capital Limited on 1 July 2024 established a foundation for a diversified private credit business, focusing on commercial real estate loans. This platform has demonstrated strong capital inflows and a 21% growth in assets under management.

Further expanding its footprint in digital infrastructure, HMC acquired Stratcap LLC in September 2024, a North American digital infrastructure funds manager. This acquisition complements the launch of the DigiCo Infrastructure REIT, listed on the ASX in December 2024, which now holds a $4 billion portfolio of data centers across Australia and the United States.

Energy Transition and Sustainability Focus

HMC Capital has also made significant strides in the energy transition sector. The group invested in StorEnergy, a developer and operator of utility-scale battery storage systems, and completed the financial close of a $950 million acquisition of Neoen’s Victorian renewable energy portfolio in August 2025. This portfolio includes operational and development assets totaling over 3,400 MW capacity, positioning HMC as a leading player in Australia’s renewable energy landscape.

The company’s commitment to sustainability is evident through its governance structures, including a dedicated sustainability subcommittee and adherence to global frameworks such as the United Nations Principles for Responsible Investing. HMC aims to align its investments with long-term value creation while managing environmental, social, and governance risks.

Balance Sheet and Capital Management

HMC Capital strengthened its financial position by increasing its secured syndicated debt facility limit to $675 million, which remained undrawn at year-end, providing ample liquidity for future growth. Net tangible assets per share stood at $3.54, reflecting solid asset backing. The company also reported no contingent liabilities and maintained compliance with all loan covenants.

Executive Remuneration Aligned with Performance

Executive remuneration outcomes for FY25 were closely tied to the company’s strong operating earnings and total shareholder return. The Managing Director and CEO received a significant long-term incentive award reflecting exceptional prior year performance and growth outlook. The Group CFO’s remuneration was adjusted to reflect the increased complexity of the business, with short-term incentives moderated by share price performance.

Non-executive director fees were increased by 5% for the first time since listing, and board diversity improved with two new female independent directors appointed, raising female representation to 43% on the board.