Why Did Lycopodium Double Its Dividend Despite a 27.7% Profit Drop?
Lycopodium Limited reported a mixed half-year result with revenue growth but a sharp decline in net profit, while announcing a doubled interim dividend and expanding its global footprint through key acquisitions.
- Revenue increased by approximately 4.2-4.6%
- Net profit after tax declined by 27.7%
- Interim dividend more than doubled to 22 cents per share
- Acquisition of four SAXUM entities across Australia, Argentina, Brazil, and the USA
- Net tangible assets per share rose to 351.8 cents
Revenue Growth Contrasts Profit Decline
Lycopodium Limited has released its half-year financial results for the period ending 31 December 2025, revealing a nuanced performance. The company saw its revenue edge up by around 4.2 to 4.6 percent compared to the same period last year, reaching approximately $174.5 million. However, this top-line growth was overshadowed by a significant 27.7 percent drop in net profit after tax, which fell to $18.3 million.
Dividend Surprise, More Than Double
In a move that may surprise some investors given the profit decline, Lycopodium declared an interim dividend of 22 cents per share, more than doubling the previous 10 cents. This decision signals confidence from management in the company’s cash flow and future prospects, despite the earnings setback. The dividend is payable on 2 April 2026, with the record date set for 24 March 2026.
Strategic Expansion Through Acquisitions
Adding a strategic dimension to its half-year results, Lycopodium gained control over four SAXUM entities spanning Australia, Argentina, Brazil, and the United States. These acquisitions are expected to bolster the company’s engineering and construction capabilities, particularly in mining and minerals sectors, and expand its geographic reach. The impact of these new entities on future earnings remains to be seen but represents a clear growth ambition.
Solid Asset Base and Earnings Per Share Decline
Net tangible assets per share increased to 351.8 cents, up from 322.2 cents, reflecting a stronger asset base. However, basic and diluted earnings per share fell from 63.5 cents to 45.9 cents, mirroring the profit decline. Lycopodium continues to hold interests in several associates and joint ventures, including ECG Engineering and Kholo Marine & Minerals, which provide specialised services in mining and project delivery.
Looking Ahead
While the half-year results present a mixed picture, Lycopodium’s management, led by CEO Peter De Leo, appears focused on leveraging acquisitions and maintaining shareholder returns. The company’s ability to integrate its new SAXUM acquisitions and reverse the profit slide will be critical in the coming months.
Bottom Line?
Lycopodium’s bold dividend increase amid falling profits and strategic acquisitions sets the stage for a pivotal year ahead.
Questions in the middle?
- What factors contributed to the 27.7% decline in net profit despite revenue growth?
- How will the newly acquired SAXUM entities impact Lycopodium’s earnings and operations going forward?
- Is the doubled interim dividend sustainable if profit pressures continue?
