Qualitas Reports $33.4M Net Profit, 7% Growth in Funds Under Management

Strong Financial Performance

Qualitas Limited (ASX – QAL) has delivered a solid financial performance for the year ended 30 June 2025, reporting a net profit after tax of $33.4 million, a 28% increase from $26.2 million in the prior year. Total revenue rose to $109.4 million, driven by record growth in funds management fees and a substantial increase in performance fee income, which surged by 234% compared to FY24.

The company’s funds under management (FUM) expanded by 7% to $9.5 billion, reflecting strong capital raising efforts predominantly through institutional channels and the Qualitas Real Estate Income Fund (QRI). Capital deployment also increased by 9% to $4.6 billion, underscoring Qualitas’ active investment strategy across real estate private credit and equity sectors.

Operational Highlights and Strategic Moves

Qualitas continues to leverage its diversified platform, investing across real estate private credit, opportunistic private equity, income-producing commercial real estate, and build-to-rent residential assets. The Group’s direct lending arm, Arch Finance, experienced a structural change during the year with the loss of control over the Arch Finance Warehouse Trust following amendments to the Noteholder Agreement. Despite this, Qualitas remains the manager of the trust and retains residual income rights, maintaining its strategic footprint in direct lending.

The company’s joint venture with Gurner Multifamily Pty Ltd has secured control over four initial build-to-rent assets, signaling Qualitas’ commitment to expanding in resilient residential income streams amid structural supply shortages.

Dividend and Capital Management

Reflecting confidence in its earnings and cash flow, Qualitas declared a fully franked final dividend of 7.5 cents per share, payable on 19 September 2025. This follows an interim dividend of 2.5 cents per share earlier in the year. The net tangible asset value per security increased slightly to $1.27, reinforcing the company’s solid capital base. The Group’s gearing ratio remains manageable at 11.6%, supported by a net cash position of $148.8 million.

Governance and Remuneration

Qualitas’ remuneration framework continues to align executive incentives with shareholder outcomes. The FY25 short-term incentive (STI) plan rewarded key executives with a mix of cash and deferred equity, while the long-term incentive (LTI) plans, including a loan share plan for the Group Managing Director Andrew Schwartz, are tied to multi-year performance metrics such as earnings per share growth and total shareholder return relative to peers.

The Board has also approved adjustments to FY26 remuneration to remain competitive and support retention, including extending LTI vesting periods to four years and revising comparator groups for performance benchmarking.

Risk and Sustainability Focus

Qualitas maintains a robust risk management framework addressing key risks such as investor capital retention, regulatory changes, economic volatility, and climate-related factors. The company holds Climate Active Carbon Neutral certification and is a signatory to the UN Principles for Responsible Investment, underscoring its commitment to sustainable investment practices and transparent climate-related disclosures.

Looking ahead, Qualitas is well positioned to benefit from shifting global private credit capital flows favoring Australia’s commercial real estate market, supported by strong fundamentals and structural supply constraints in residential sectors.