Microequities Posts 41% Profit Surge Amid Record $657m Funds Under Management

Strong Financial Performance Despite Market Headwinds

Microequities Asset Management Group Limited has delivered a notably strong half-year result for the period ending 31 December 2025, with profit after tax attributable to shareholders soaring 41.1% to $6.66 million. This impressive growth comes despite subdued investor sentiment in the small and microcap industrial sectors where the company primarily operates.

Revenue from ordinary activities climbed 26.9% to nearly $8 million, driven by a combination of steady management fees and a solid contribution from performance fees, which generated $2.3 million during the half. While performance fees were slightly lower than the prior corresponding period, the company maintained disciplined cost management, keeping operating expenses well controlled and preserving a healthy cost-to-recurring-revenue ratio of 36.7%.

Record Funds Under Management and Strategic Growth

Funds under management (FUM) reached a record $657 million, marking a 1% increase year-on-year. This milestone underscores Microequities’ steady growth trajectory despite challenging market conditions. Recurring revenue rose modestly by 2% to $5.6 million, reflecting the company’s ability to sustain its core revenue streams.

Significantly, the company’s on-balance-sheet investment activities continue to expand, with $25.4 million invested as of 31 December 2025. This segment contributed $2.8 million, or nearly 31% of the group’s profit before tax, highlighting a strategic shift towards operating both as an agent and principal in capital allocation. This dual role could position Microequities to capture greater upside from its investment expertise.

Dividend Increase Reflects Confidence

Reflecting its strong financial position and confidence in ongoing performance, Microequities declared a fully franked interim dividend of 2.3 cents per share, a 21% increase over the previous period. The dividend aligns with the company’s policy of distributing between 70% and 100% of operating profit from investment management after tax.

The balance sheet remains robust with $6.4 million in cash and net tangible assets rising 16.2% to $27.2 million, providing a solid foundation for future growth and investment opportunities.

Navigating Market Volatility and Capitalising on AI

Looking ahead, Microequities acknowledges renewed volatility in equity markets, particularly within technology and software sectors, areas where it has built considerable expertise. The rapid evolution of artificial intelligence presents both challenges and opportunities, as markets attempt to discern long-term winners from losers.

Late in the half, the company successfully completed a capital raising for its Private Equity strategy, securing three new investment opportunities. These high-quality businesses are expected to contribute meaningfully to long-term returns, reinforcing Microequities’ commitment to disciplined, research-driven investing.

Overall, Microequities’ half-year results demonstrate resilience and strategic adaptability, positioning the company well to navigate ongoing market uncertainties while pursuing growth avenues.