MFF’s Profit Decline Highlights Market Volatility Risks Despite Growth

Financial Performance and Dividend Strategy

MFF Capital Investments Limited has reported a significant 45% decline in net profit after tax to $209.7 million for the half year ended 31 December 2025, compared to $381.5 million in the prior corresponding period. This reduction primarily reflects mark-to-market valuation changes in its investment portfolio amid volatile global markets. Despite this, the company’s net assets grew by 7% to $2.61 billion, underscoring a resilient balance sheet.

The Board declared a fully franked interim dividend of 10 cents per share, up from 8 cents a year earlier, and signalled an intention to increase the six-monthly dividend further to 11 cents for the period ending June 2026. This commitment to growing dividends aligns with MFF’s long-term strategy of delivering sustainable shareholder returns.

Operational Autonomy and Strategic Evolution

The half year marked a pivotal phase for MFF as it completed its transition to full operational autonomy, ending its longstanding service relationship with Magellan Asset Management. The company expanded its workforce from a single employee to 17 full-time staff, investing heavily in internal capabilities to manage investment, operational, and corporate functions independently. This shift positions MFF for sustainable growth and greater control over its strategic direction.

Adding to its evolution, MFF acquired Montaka Global Investments in February 2025, broadening its investment management platform and diversifying its portfolio. Montaka’s funds, including the Montaka Global Extension Fund and Montaka Global Fund, now form an integral part of MFF’s broader investment group, enhancing its global equities exposure.

Portfolio and Market Outlook

MFF’s portfolio remains focused on long-term capital growth through investments in advantaged global businesses, with a disciplined, unconstrained approach to capital allocation. The Portfolio Manager highlighted ongoing strong business performance among portfolio companies despite choppy equity markets and geopolitical uncertainties. Currency fluctuations, particularly a weaker US dollar, negatively impacted reported profits during the period.

While short-term mark-to-market results fluctuated, MFF emphasises the importance of sustained growth in net tangible assets and dividends over the medium to long term. The company’s pre-tax net tangible assets per share rose to $5.279, and post-tax NTA increased to $4.432, reflecting underlying portfolio strength.

Leadership and Governance

Gerald Stack, appointed CEO and Managing Director on 1 January 2026, brings over 37 years of investment and finance experience, including leadership roles at Magellan Financial Group. His appointment signals a new chapter focused on operational independence and growth. Chris Mackay, a founding figure of MFF and former Managing Director, continues as Executive Director Investments and Capital and Portfolio Manager, ensuring continuity in investment philosophy.

The company maintains a strong governance framework, with a fully franked dividend policy supported by substantial franking credits of $266.7 million as at December 2025. The Board remains cautious but optimistic, acknowledging market risks such as inflationary pressures, geopolitical tensions, and regulatory challenges.