Ironbark Capital Posts 17.6% Profit Rise, Boosts Fully Franked Dividends

Solid Financial Performance Amid Market Challenges

Ironbark Capital Limited (ASX – IBC) has delivered a robust financial result for the year ended 30 June 2025, reporting a net profit after tax of $3.07 million, up 17.6% from $2.61 million in the prior year. This growth was underpinned by a 16% increase in investment revenue, including realised gains from strategic sales and option income, despite a decline in dividend income from the resources sector.

The company’s earnings per share rose 20.8% to 2.9 cents, reflecting improved profitability and effective capital management. Net tangible assets per share (NTA) edged higher to $0.57, signaling stable underlying asset values after accounting for dividends and share buy-backs.

Dividend Growth and Capital Management

Ironbark increased its fully franked dividend payout by 6.4% to 2.5 cents per share for the full year, with a final dividend of 1.3 cents declared, payable on 26 September 2025. The dividends remain fully franked at the corporate tax rate of 25%, maintaining the company’s commitment to delivering tax-effective income to shareholders.

The company’s Dividend Reinvestment Plan remains suspended, a notable point for investors considering reinvestment options. Meanwhile, Ironbark continued its on-market share buy-back program, purchasing 1.81 million shares during the year and extending the program for another 12 months to 18 July 2026. This buy-back strategy aims to enhance shareholder value by reducing shares on issue, particularly when the share price trades at a discount to NTA.

Portfolio Strategy and Market Outlook

The investment portfolio returned 8.4% for the year, slightly underperforming its benchmark (1-year swap rate plus 6%) by 1.4%. The portfolio’s conservative positioning, focused on income-generating assets such as hybrids, corporate bonds, and buy & write option strategies, helped maintain low volatility at less than a third of the ASX 300 index’s risk level.

Property trusts contributed strongly with a 16.3% return, benefiting from lower interest rates and improved capitalisation rates, while hybrid and corporate bonds delivered a solid 6.9% return. The buy & write strategy added 7.2%, supported by resilient bank share prices despite resource sector headwinds.

Chairman Robert Lord highlighted ongoing geopolitical uncertainties, including the impact of US tariffs and global supply chain shifts, as factors creating a challenging investment environment. However, the expectation of further interest rate cuts by the Reserve Bank of Australia is seen as supportive for Ironbark’s yield-focused portfolio.

Governance and Leadership

The year also saw a leadership change with Robert Lord appointed Chairman in October 2024, bringing extensive experience in manufacturing, mining, and logistics sectors. The board remains focused on prudent capital management and delivering consistent, fully franked dividends within an acceptable risk profile.

Ironbark’s investment management and administrative services continue to be provided by Kaplan Funds Management Pty Limited under a revised agreement effective January 2024, which increased management fees but removed performance fees, aligning incentives with steady income generation.