Pacific Current Reports 19% Drop in Underlying Profit Amid Strategic Portfolio Changes

Financial Performance and Profitability

Pacific Current Group Limited (ASX, PAC) released its FY25 financial results showing a modest decline in revenue to $41.5 million, down 3.3% from the prior year. Underlying net profit after tax (NPAT) also fell 19% to $26 million, reflecting a challenging operating environment and the impact of several one-off and non-cash items. Despite this, the company reported a statutory net profit after tax of $58.2 million, supported by gains on investment disposals.

Strategic Portfolio Restructuring

The year was marked by significant portfolio activity. Pacific Current completed the sale of its 100% equity interest in Aether Investment Partners, transitioning to a revenue-sharing arrangement that provides ongoing income linked to Aether’s fund performance. The Group also partially divested its stakes in Victory Park Capital Advisors and Victory Park Capital GP Holdco, receiving a mix of cash and Janus Henderson Group stock, with potential earn-out payments tied to future revenue milestones.

Additionally, the Group exited its investment in Banner Oak Capital Partners, realising a gain of $8.1 million. These divestments contributed to a notable reduction in the Group’s funds under management (FUM), which decreased from $42.5 billion to $30 billion, reflecting both strategic exits and market movements.

Capital Management and Shareholder Returns

In a major capital management move, Pacific Current executed an off-market share buy-back, repurchasing over 22 million shares, equivalent to 42% of issued capital, at $12 per share, representing a premium to the market price. The buy-back cost $264.5 million and was funded from surplus capital, significantly reducing the company’s share count and net assets.

The Board declared a final unfranked dividend of 28 cents per share, continuing its commitment to returning value to shareholders despite the earnings pressure. Dividend payout ratios remain targeted between 60% and 80% of underlying NPAT.

Leadership and Governance Updates

Leadership changes included the appointment of Justin Arter as Independent Non-Executive Chairman from 1 July 2025, succeeding Antony Robinson who resigned at the end of June. Michael Clarke continued as Executive Director and Acting CEO, steering the company through this transitional period. The Board also welcomed Joanne Dawson as a Non-Executive Director in July 2024, strengthening governance oversight.

Risk Management and Outlook

Pacific Current continues to navigate risks inherent in global capital markets, including regulatory changes, key personnel retention, and fund manager performance volatility. The Group’s diversified global portfolio and strategic focus on boutique asset managers aim to mitigate these risks while positioning for sustainable growth.

Auditors Ernst & Young issued an unqualified opinion on the financial statements, highlighting the valuation of financial assets at fair value as a key audit matter due to the significant judgment involved.