Profit Boom at Katana Capital Raises Questions on Dividend Sustainability
Katana Capital Limited has reported a remarkable 672% increase in half-year profit after tax to $5.8 million, driven by strong investment income and gains. The company maintains its quarterly dividend at 0.5 cents per share, reflecting confidence in its ongoing strategy.
- Half-year profit after tax rises to $5.8 million, up 672%
- Revenue climbs to $9.7 million, boosted by investment income
- Quarterly dividend maintained at 0.5 cents per share, fully franked
- Net tangible asset backing per share increases to $1.531
- Share buy-back and option exercises completed during the period
Strong Financial Performance
Katana Capital Limited has delivered a striking turnaround in its half-year results for the period ending 31 December 2025, posting a net profit after tax of $5.8 million. This represents a 672% increase compared to the $753,000 recorded in the same period last year. The surge was primarily driven by a significant rise in investment income, including both realised and unrealised gains on its portfolio.
The company’s revenue from ordinary activities rose to $9.7 million, up from $1.5 million in the prior corresponding period, reflecting the success of its “all opportunities” investment strategy. Earnings per share also jumped substantially to 18.42 cents from 2.37 cents, underscoring the improved profitability on a per-share basis.
Dividend Policy and Capital Management
Despite the strong profit growth, Katana Capital has maintained its interim dividend at 0.5 cents per share, fully franked, consistent with the previous year’s payout. The company declared this dividend on 2 January 2026, with a record date of 9 January and payment completed by the end of January. This steady dividend policy signals management’s commitment to providing reliable returns to shareholders while balancing reinvestment opportunities.
During the half-year, Katana Capital also executed a share buy-back program, repurchasing and cancelling 719,139 shares at an average price of $1.29. Additionally, the company saw the exercise of 1.75 million share options, which contributed to a modest increase in issued capital. These capital management activities reflect a strategic approach to optimizing the company’s capital structure and shareholder value.
Balance Sheet and Outlook
The company’s net tangible asset backing per share rose to $1.531 from $1.308, indicating an enhanced underlying asset base. Total assets increased to $53.5 million, supported by growth in listed equities and unit trust investments. Liabilities remained manageable, with total liabilities at $4.8 million.
Katana Capital’s directors report no material changes in the state of affairs during the period and express confidence that the company will continue its current trajectory. The outlook remains stable, with a commitment to quarterly dividends subject to ongoing profitability. The company’s diversified investment portfolio and disciplined capital management provide a solid foundation for future growth.
Governance and Compliance
The half-year financial report was reviewed by BDO Audit Pty Ltd, which issued an unqualified review report confirming compliance with Australian Accounting Standards and the Corporations Act 2001. The directors reaffirm their belief that the company will remain a going concern and continue to meet its financial obligations.
Bottom Line?
Katana Capital’s robust profit growth and steady dividend policy set the stage for sustained investor confidence amid evolving market conditions.
Questions in the middle?
- What specific investments drove the significant unrealised gains in the portfolio?
- How will the company balance future dividend payments with potential reinvestment needs?
- Could further share buy-backs be anticipated given the current capital management approach?
