Why Did Thorney Opportunities’ Profit Plunge 76% Despite Rising Dividends?
Thorney Opportunities Ltd posted a sharp 76% decline in profit after tax for FY2025 yet declared a higher fully franked final dividend and reported growth in net tangible assets per share.
- Profit after tax fell 76% to $8.54 million
- Final dividend increased 3.3% to 1.55 cents per share, fully franked
- Net tangible assets per share rose to 90.3 cents after tax
- Strong balance sheet with $32.8 million in deployable capital
- Key portfolio holdings AMA Group, Solvar, ZIP Co showed gains; Austin Engineering lagged
A Year of Contrasts for Thorney Opportunities
Thorney Opportunities Ltd (ASX, TOP) has released its 2025 annual report revealing a year marked by significant profit contraction alongside encouraging signs of portfolio resilience and shareholder returns. The company’s profit after tax plunged 76% to $8.54 million, a steep decline from $35 million in the prior year, primarily driven by market volatility and fair value adjustments to its investment portfolio.
Despite the profit drop, the Board declared a fully franked final dividend of 1.55 cents per share, up 3.3% from the previous year’s final dividend. This brings total dividends for FY2025 to 2.65 cents per share, reflecting the company’s commitment to delivering income to shareholders even amid challenging conditions.
Balance Sheet Strength and Portfolio Highlights
Net tangible assets (NTA) per share after tax increased to 90.3 cents, up from 87.1 cents in FY2024, supported by gains in the listed equity portfolio and ongoing share buy-back activity. The company maintains a robust cash position with $32.8 million in deployable capital, positioning it well to seize emerging investment opportunities.
Key portfolio holdings contributed variably to performance. AMA Group Limited rebounded strongly following leadership changes and refinancing, with its share price doubling during the year. Solvar Limited also recovered from prior setbacks, delivering profitability growth and a 50% share price increase. ZIP Co Limited benefited from strategic investments at attractive prices and reported results above market expectations, particularly in the US market. Conversely, Austin Engineering Limited remained a drag on performance due to operational challenges in Chile.
Strategic Outlook and Market Conditions
Chairman Alex Waislitz expressed cautious optimism, noting that while global geopolitical tensions, trade disruptions, and monetary policy shifts continue to inject volatility, Australian markets have shown resilience. The company’s disciplined, value-based investment approach remains focused on capital preservation and identifying undervalued opportunities amid a relatively expensive market environment.
TOP’s ongoing on-market share buy-back program, which acquired nearly 7.8 million shares during the year, reflects management’s confidence in the company’s intrinsic value despite the persistent discount to NTA experienced by shareholders.
Governance and Management
The company’s governance framework remains robust, with an experienced Board led by Chairman Alex Waislitz and supported by non-executive directors Henry Lanzer, Dr Gary Weiss, and newly appointed Peter Landos. The investment portfolio is managed by Thorney Management Services Pty Ltd under a renewed agreement extending through 2030, with fees aligned to performance metrics.
Auditor Ernst & Young provided an unqualified opinion on the financial statements, highlighting the fair value measurement of investments and the recognition of management and performance fees as key audit matters.
Bottom Line?
Thorney Opportunities faces the challenge of translating portfolio gains into sustained profit growth while navigating market headwinds and shareholder discount pressures.
Questions in the middle?
- Will the company’s cautious cash holdings limit upside in a recovering market?
- How will the discount to net tangible assets be addressed to unlock shareholder value?
- What impact will ongoing geopolitical and economic uncertainties have on TOP’s investment strategy?
