IAM’s Debt-Free Pivot and Legal Battles: What Investors Should Watch Next

Solid Revenue Growth and Loss Reduction

Income Asset Management Group Limited (IAM) delivered a notable turnaround in its financial performance for the year ended 30 June 2025. Revenues rose 22% to $17.15 million, driven by a robust second half and a 73% surge in trade turnover to $5.23 billion. Meanwhile, the net loss narrowed sharply by 62% to $5.5 million, reflecting disciplined cost management and operational efficiencies.

The Group’s strategic $4 million cost reduction program, including headcount rationalisation and operational savings, contributed to an 8% decrease in operating expenses despite revenue growth. Importantly, IAM fully repaid $10 million of high-cost debt, saving $1.2 million annually in interest expenses and positioning the business with a largely debt-free balance sheet.

Capital Raise and Balance Sheet Strengthening

In November 2024, IAM completed an $18 million equity raise, which was instrumental in extinguishing its debt and bolstering working capital. This capital injection underpinned the Group’s ability to operate more efficiently and support deal flow execution. The strengthened balance sheet is reflected in a positive net asset position of $6.19 million at year-end, a significant improvement from a net liability position the prior year.

Growth in Funds Under Advice and New Product Launch

Funds under advice (FUA) expanded by 27% to over $2.4 billion, with client-held loan investments increasing 43% to $478 million. This growth was supported by the development of a new managed discretionary account (MDA) product launched in FY26, targeting a 300 basis points return over the benchmark BBSW rate. The MDA features a diversified portfolio with 40% allocated to bank-syndicated loans, offering clients a lender-friendly, liquid alternative to traditional private credit strategies.

The Group’s strategic partnership with Perpetual Corporate Trust (PCT) transformed custody and administration services from a cost centre into a sustainable revenue stream through custody fees, enhancing recurring revenue potential. Additionally, IAM divested its loss-making deposit broking business to PCT, streamlining operations and reducing restructuring costs.

Governance Enhancements and Board Changes

IAM strengthened its governance framework by appointing Danielle Press, former ASIC Commissioner and seasoned capital markets executive, to the Board in December 2024. The Board also reinstated its Audit and Risk and Remuneration Committees, enhancing oversight and risk management. Looking ahead, Executive Chairman John Nantes and Non-Executive Director Craig Swanger plan to retire at the November 2025 AGM. CEO Jon Lechte is expected to join the Board as Managing Director, with Danielle Press assuming the Chair role, signaling a new leadership phase.

Ongoing Challenges and Outlook

The Group faces ongoing legal proceedings initiated by competitor BGC related to staff hires, though the financial impact remains uncertain. Despite macroeconomic volatility and market dislocation during FY25, IAM’s pipeline of new issuance remains healthy, with strong client engagement and a busy slate of new debt capital market transactions anticipated in FY26. The Board expresses confidence that the strategic actions taken have laid a solid foundation for sustainable growth and improved profitability in the coming year.