How Orion Equities Weathered FY25: $1.33M Profit Amid Investment Setbacks
Orion Equities reported a $1.33 million net profit for FY25, down 56% from the prior year, impacted by unrealised losses on key investments and a significant tax benefit reversal. The company’s portfolio remains anchored by stakes in Bentley Capital and Strike Resources.
- Net profit after tax of $1.33 million, down 56% year-on-year
- Pre-tax loss of $85,000 driven by $100,000 unrealised loss on Strike Resources shares
- Income tax benefit of $1.41 million from reversal of prior tax provision related to iron ore royalty termination
- Investment in Bentley Capital written down to nil carrying value despite $205,000 market valuation
- No dividend declared; investment property revalued up $250,000 to $2.1 million
Financial Performance Overview
Orion Equities Limited (ASX, OEQ) has released its audited results for the financial year ended 30 June 2025, reporting a net profit after tax of $1.33 million. While positive, this represents a 56% decline from the prior year’s $3 million profit, reflecting a more challenging investment environment and specific portfolio headwinds.
The company recorded a modest pre-tax loss of $85,000, primarily due to a $100,000 unrealised loss on its 10 million share holding in Strike Resources Limited (ASX, SRK), whose share price declined from 4 to 3 cents over the year. This loss was partially offset by a $1.41 million income tax benefit arising from the reversal of a prior tax provision linked to a $5 million iron ore royalty termination payment received in the previous year.
Investment Portfolio and Associate Entity Impact
Orion’s investment portfolio remains concentrated in two key ASX-listed entities, Bentley Capital Limited (ASX, BEL) and Strike Resources. The company holds a 26.95% stake in Bentley, which is accounted for as an associate entity using the equity method. Due to Bentley’s accumulated losses, Orion has written down the carrying value of this investment to nil, despite a market valuation of approximately $205,000 as at 30 June 2025.
This accounting treatment reflects the equity method’s requirement to reduce the carrying amount to zero when accumulated losses exceed the investment cost. Should Bentley return to profitability, Orion would be able to recognise a positive carrying value again. Bentley’s financial performance is closely tied to Strike Resources, which holds a significant interest in lithium and iron ore projects, including the Apurimac Iron Ore Project in Peru.
Asset Revaluation and Capital Position
Orion’s investment property in Mandurah, Western Australia, was revalued upwards by $250,000 to $2.1 million, contributing positively to the company’s asset base. The company’s net tangible asset backing per share remained stable at approximately 42 cents pre-tax, with a slight increase from the prior year.
Cash and cash equivalents increased to $4.1 million, bolstered by rental income and the timing of royalty payments. The company did not declare a dividend for FY25, retaining capital to support ongoing investment activities.
Governance and Remuneration
The board remains unchanged, with Executive Chairman Farooq Khan, Executive Director Victor Ho, and Non-Executive Director Yaqoob Khan continuing their roles. Remuneration for key management personnel remains fixed, with no performance-based incentives or equity-based benefits currently in place. The company maintains robust risk management policies covering operational, market, and compliance risks.
Outlook and Market Dependencies
Orion’s future performance is closely linked to the market valuations of its key investments, particularly Strike Resources and Bentley Capital. The share price of Strike has fluctuated between 2.5 and 4.5 cents over the past year, settling at 3 cents as of 30 June 2025. Lithium Energy Limited (ASX, LEL), in which Bentley holds a minor stake, remains suspended from trading, adding an element of uncertainty to the broader investment ecosystem.
Investors will be watching closely for any shifts in these underlying assets, as well as developments in lithium and iron ore markets that could influence valuations. Orion’s conservative approach to capital management and its stable asset base provide a foundation, but the company’s fortunes remain tied to the volatile resource sector.
Bottom Line?
Orion Equities’ FY25 results underscore the delicate balance between investment volatility and tax strategy, setting the stage for a cautious watch on its resource-linked holdings.
Questions in the middle?
- Will Bentley Capital’s financial turnaround materialise to restore Orion’s investment value?
- How will Lithium Energy’s ASX suspension resolution impact Orion’s associate investments?
- What are the prospects for Strike Resources’ share price amid fluctuating iron ore and lithium markets?