Why Is International Equities Ending Melbourne Operations Amid Revenue Slump?

Quarterly Financial Overview

International Equities Corporation Ltd (IEQ) has revealed a challenging quarter ending 31 December 2025, with revenues falling sharply by over 40% to A$893,000 compared to the previous year. The company’s after-tax loss widened by 7.5% to A$453,000, reflecting the ongoing impact of a sluggish economy marked by rising operating costs, inflation, and higher interest rates.

Despite these headwinds, IEQ’s net tangible asset backing per security declined from 4.65 cents to 3.61 cents, signalling some erosion of shareholder value amid the tough trading conditions.

Operational Challenges and Strategic Shifts

The company’s property and tourism segments have been particularly affected. At its Melbourne sites; Seasons Heritage Melbourne and Seasons Botanic Gardens; trading remains subdued due to cost-of-living pressures and increased state taxes. Notably, IEQ has ceased operations at Seasons Heritage Melbourne following lease expirations and the difficulty of maintaining profitable operations under current conditions.

Tourism revenues continue to lag as both domestic and international travel recover slowly, further dampening hotel division performance. The hotel segment reported revenue of just A$105,000 and an after-tax loss of A$181,000 for the quarter, underscoring the sector’s fragility.

Property Leasing and Sales Outlook

On a more positive note, the company’s apartment holdings have maintained their value despite the economic climate, prompting IEQ to hold off on sales for now. Sales and leasing activities generated A$161,000 in revenue, with a modest after-tax profit of A$19,000 from commissions on long-term leases. The company remains cautiously optimistic about this segment’s stability moving forward.

Cash Flow and Funding Position

IEQ’s cash flow from operations was negative at A$170,000 for the quarter, but the company maintains a strong liquidity position with nearly A$1 million in cash and access to unused financing facilities totaling A$3.5 million. This provides an estimated 26 quarters of funding runway, allowing IEQ to continue operations without the need for immediate capital raising.

Related party transactions with Renaissance Assets Pty Ltd continue on standard commercial terms, including a zero-interest loan facility of A$3.5 million, which supports the company’s financial flexibility.

Looking Ahead

While the company navigates a difficult economic environment, its decision to end operations at Seasons Heritage Melbourne and hold apartment assets suggests a strategic pivot towards preserving capital and focusing on more stable revenue streams. The outlook remains cautious, with management expecting continued economic pressures over the next six months despite some positive tourism events.