Fat Prophets Global Contrarian Fund Ltd has reported a robust 56% increase in net profit for the year ended 30 June 2025, driven by strong investment returns and a leveraged global equity portfolio. The company also declared a fully franked special dividend, reflecting confidence in its ongoing performance.
- 56% increase in profit after tax to $7.0 million
- 47% revenue growth to $11.56 million
- Fully franked special dividend of $0.05 per share declared
- Net tangible assets per share rose significantly
- Concentrated, leveraged global equity portfolio managed by Fat Prophets Funds Management
Strong Financial Performance
Fat Prophets Global Contrarian Fund Ltd (ASX – FPC) has delivered a standout financial performance for the year ended 30 June 2025, with net profit after tax rising 56% to $6.99 million, up from $4.47 million the previous year. Revenue from ordinary activities also surged 47% to $11.56 million, underscoring the fund’s effective investment strategy amid a volatile global market environment.
The company’s net tangible assets per share increased markedly, with pre-tax backing rising to $1.56 and post-tax backing to $1.44, compared to $1.21 and $1.18 respectively at the prior year-end. This growth reflects both capital appreciation and disciplined portfolio management.
Dividend Declaration Signals Confidence
In recognition of its strong investment performance, the board declared a fully franked special dividend of $0.05 per share on 23 July 2025. This move signals the company’s confidence in its profit reserves and ongoing ability to generate shareholder returns. The board maintains a flexible dividend policy, intending to pay dividends when appropriate and supported by available profits.
Portfolio Strategy and Risk Management
The fund continues to pursue a concentrated, leveraged portfolio focused on listed global equities, managed by Fat Prophets Funds Management Pty Limited. The portfolio is diversified across key regions including Australia, North America, Japan, Hong Kong, and Europe, with significant exposure to financials, materials, and technology sectors.
Leverage remains a core component of the strategy, with the fund’s invested position at 109% in equity securities and a modest 3% in cash and equivalents. The company employs derivatives and short selling to manage market exposures and enhance returns, acknowledging the higher risk profile this entails.
Risk management practices are robust, addressing market, foreign currency, credit, and liquidity risks. The fund’s prime broker, BNP Paribas, holds a strong credit rating, and the company maintains sufficient liquidity to meet obligations. Sensitivity analyses indicate that a 10% fluctuation in the Australian dollar against the US dollar could materially impact net asset values, reflecting the fund’s global currency exposure.
Governance and Leadership Stability
Leadership remains stable with Michael Gallagher as Chairman, Katrina Vanstone as Non-executive Director, and Angus Geddes serving as Executive Director and Chief Investment Officer. Directors’ remuneration remained consistent with the prior year, reflecting prudent governance practices. The company’s AGM is scheduled for 24 October 2025 in Sydney.
No significant events have occurred post-balance date that would materially affect the company’s financial position or operations. A prior period restatement was made to correct tax treatment of unrealised foreign exchange losses, but this has been fully addressed.
Bottom Line?
With strong earnings growth and a special dividend, Fat Prophets Global Contrarian Fund signals robust momentum but investors should watch leverage and currency risks closely.
Questions in the middle?
- How will the fund balance leverage benefits against market volatility going forward?
- What is the outlook for dividend policy amid changing global economic conditions?
- How might currency fluctuations impact portfolio returns in the next financial year?