NAOS Emerging Opportunities Company Limited has reported a robust half-year profit increase of 103%, alongside a fully franked interim dividend of 2.10 cents per share, reflecting strong portfolio performance and market confidence.
- Profit after tax up 103% to $7.67 million
- Investment portfolio return of 18.56%, outperforming benchmark
- Fully franked interim dividend declared at 2.10 cents per share
- Net tangible asset backing per share rises to $0.58 post-tax
- Share price discount to NTA narrows significantly
Strong Financial Performance
NAOS Emerging Opportunities Company Limited (ASX: NCC) has delivered a standout half-year financial result for the period ending 31 December 2025. The company reported a profit after tax of $7.67 million, more than doubling the $3.78 million recorded in the same period last year. Revenue from ordinary activities surged 77% to nearly $10 million, underscoring the strength of its investment strategy.
The company’s investment portfolio returned 18.56% over the half-year, outperforming the S&P/ASX Small Ordinaries Accumulation Index benchmark, which returned 17.39%. This outperformance highlights the effectiveness of NAOS’s concentrated approach to investing in emerging Australian companies, excluding resource sectors.
Dividend and Shareholder Returns
Reflecting its strong earnings, NAOS declared a fully franked interim dividend of 2.10 cents per share, up from 2.00 cents in the previous final dividend. The dividend is payable on 24 April 2026, with a Dividend Reinvestment Plan (DRP) in place to allow shareholders to reinvest their dividends into additional shares.
Net tangible asset (NTA) backing per share increased to $0.58 post-tax, a notable rise from prior periods. The company also saw a significant narrowing of its share price discount to pre-tax NTA, from 36.25% to 15.00%, contributing to a total shareholder return of 74.52% for the half-year. This suggests growing market confidence in NAOS’s portfolio and management.
Market Context and Outlook
The half-year was marked by mixed market dynamics. While global investor enthusiasm for Artificial Intelligence bolstered risk appetite, the Australian market’s gains were concentrated in resources and gold sectors, with other areas lagging. Inflation uncertainty, currency volatility, and evolving interest rate expectations created a selective investment environment.
Looking ahead, NAOS’s board emphasises a focus on companies with strong earnings, cash generation, and clear catalysts for growth. This disciplined approach aims to capitalise on improving market breadth and reward fundamentals as investor attention shifts towards earnings delivery and management execution.
Capital Structure and Governance
The company maintains a stable capital structure, with $22.93 million in unsecured, redeemable convertible notes carrying a fixed interest rate of 4.5% until September 2026. NAOS’s investment management is outsourced to NAOS Asset Management Limited, ensuring professional oversight aligned with shareholder interests. The half-year report was independently reviewed by Deloitte Touche Tohmatsu, confirming compliance with Australian accounting standards.
Bottom Line?
NAOS’s strong half-year results and dividend declaration position it well for continued growth, but investors will watch closely how market uncertainties unfold.
Questions in the middle?
- Will NAOS sustain its portfolio outperformance amid evolving market conditions?
- How might inflation and currency volatility impact future earnings and dividends?
- What are the prospects for convertible note conversions and their effect on capital structure?