NAOS Emerging Opportunities Reports 105% Profit Growth and Declares 4c Fully Franked Dividend

Financial Turnaround and Dividend Policy

NAOS Emerging Opportunities Company Limited (ASX, NCC) has reported a marked financial turnaround for the year ended 30 June 2025. Revenue from ordinary activities surged by 118% to $3.52 million, while profit before tax attributable to shareholders more than doubled to $1.15 million. This reversal from prior losses underscores a renewed momentum in the company’s investment strategy.

Reflecting this improved performance, NCC declared fully franked dividends totaling 4 cents per share for FY25, maintaining its commitment to providing shareholders with a sustainable and tax-effective income stream. The dividend reinvestment plan remains active, offering shareholders the option to compound their investment.

Portfolio Performance and Strategic Holdings

The company’s investment portfolio, focused on emerging Australian and New Zealand companies, delivered a modest positive return of 5.59% for the financial year. However, since inception, the portfolio has underperformed the S&P/ASX Small Ordinaries Accumulation Index by 7.78% on an annualised basis. Key holdings include Big River Industries, Saunders International, Hancock & Gore, and COG Financial Services.

Notably, strategic initiatives have been undertaken within core investments. Hancock & Gore expanded its footprint with the acquisition of UK-based Trutex, aiming to enhance supply chain efficiencies and international scale. Saunders International faced near-term earnings headwinds due to project timing uncertainties but remains well-positioned for medium- to long-term growth, particularly in defence-related infrastructure.

COG Financial Services underwent significant board changes and a strategic reset to restore shareholder value and drive consistent earnings growth. The company’s renewed focus on its insurance broking division is expected to unlock substantial organic growth potential.

Governance and Capital Management

The board of NCC comprises experienced directors including Independent Chair Sarah Williams and investment veterans Sebastian Evans and Warwick Evans. The company maintains strong alignment with shareholders, with directors holding significant shareholdings. Capital management remains disciplined, with no dilutionary share issues during the year and an on-market buyback program for convertible notes to preserve net tangible asset value.

NAOS continues to emphasize environmental, social, and governance (ESG) factors in its investment process, aligning with its B Corp certification and commitment to responsible investing. Constructive engagement with investee companies is a hallmark of its approach, aiming to support long-term value creation.

Outlook

While the company’s portfolio faces challenges from broader market dynamics and sector-specific headwinds, the board and management remain confident in the long-term prospects of their concentrated investment approach. The emphasis on emerging companies with structural growth tailwinds and aligned management teams positions NCC to potentially deliver sustainable returns as market conditions evolve.