How Queste Communications Weathered FY25 Investment Storms to Post Profit

Overview of Financial Performance

Queste Communications Ltd (ASX, QUE) has released its full year financial results for the year ended 30 June 2025, reporting a profit after tax of $111,504 for the parent entity. The consolidated entity, which includes controlled investment company Orion Equities Limited (ASX, OEQ) and associate Bentley Capital Limited (ASX, BEL), recorded a profit after tax of $1.25 million, down significantly from the prior year.

The decline in consolidated profitability was primarily driven by investment portfolio performance, notably unrealised losses in Strike Resources Limited (ASX, SRK), where the share price fell from 4 to 3 cents during the year. Additionally, the carrying value of Queste’s investment in Bentley Capital was reduced to nil due to accumulated losses, reflecting ongoing challenges in that associate entity.

Investment Portfolio and Asset Management

Orion Equities, in which Queste holds a 59.86% stake, remains the core of the consolidated entity’s investment activities. Orion’s portfolio includes significant holdings in Bentley Capital and Strike Resources, with the latter’s share price volatility directly influencing consolidated results. The company also maintains exposure to Lithium Energy Limited (ASX, LEL), a battery minerals company currently suspended from ASX trading, adding an element of uncertainty to future performance.

On the property front, Queste reclassified a key asset from held-for-sale to investment property, resulting in a $250,000 fair value gain. This move signals a strategic shift away from active redevelopment or sale, opting instead for long-term rental income generation from the Mandurah, Western Australia property.

Capital Management and Governance

Reflecting a prudent approach to overhead management, the company’s directors voluntarily suspended their salaries for the financial year. No dividends were declared, consistent with a cautious capital management stance amid market uncertainties. The board remains composed of experienced executives Farooq Khan (Executive Chairman and Managing Director), Victor Ho (Executive Director and Company Secretary), and Yaqoob Khan (Non-Executive Director), who collectively oversee the company’s investment strategy and risk management.

Queste’s financial statements confirm a stable balance sheet with net assets increasing modestly to $763,093 for the parent entity. The consolidated entity’s net assets stand at $5.94 million, supported by a diversified portfolio and a strong cash position of over $4 million.

Looking Ahead

While the company’s investment portfolio faces headwinds, particularly from associate Bentley Capital and Strike Resources, Queste’s management signals readiness to capitalize on future market recoveries. The company’s exposure to emerging battery minerals projects through Lithium Energy adds a speculative growth dimension, albeit tempered by the current ASX suspension of that stock.

Investors will be watching closely how Queste navigates these challenges, balancing income generation from property assets with the inherent volatility of equity investments in the resources sector.