Pacific Current’s Underlying Profit Halves as Debt Facility Fully Repaid

Financial Performance and Underlying Results

Pacific Current Group Limited (ASX: PAC) has revealed a challenging first half for the 2026 financial year, reporting a statutory net loss after tax of $11.7 million, a stark reversal from the $100.4 million profit recorded in the prior corresponding period. This swing was largely influenced by significant non-cash impairments, fair value adjustments, and the impact of disposals of key investments.

Despite the headline loss, the Group’s underlying net profit after tax, which excludes these non-recurring and accounting-driven items, stood at $6.7 million; down 56% from $15.3 million a year earlier. This underlying figure offers a clearer view of the Group’s operational profitability amid a volatile market environment.

Strategic Capital Management and Debt Repayment

During the period, Pacific Current Group undertook significant capital management initiatives. Notably, it fully repaid its $62 million senior secured debt facility with Washington H. Soul Pattinson Company Limited, using proceeds from a deposit account that had been held as security. This repayment, completed in late October 2025, removes a key financial obligation and potentially lowers future interest costs, enhancing balance sheet flexibility.

The Group also continued its on-market share buy-back program, repurchasing nearly 192,000 shares by the end of December 2025, reflecting a commitment to returning value to shareholders. Additionally, the Board declared a fully franked interim dividend of 20 cents per share, up from an unfranked 15 cents in the prior year, signalling confidence in the Group’s cash flow and capital position.

Investment Portfolio and Funds Under Management

Pacific Current Group’s portfolio saw notable disposals, including a partial sale of its interest in Victory Park Capital Advisors and the full sale of its holdings in Janus Henderson Group. These transactions generated proceeds of approximately $22 million, which were largely redeployed into short-term deposits and other investments.

Funds under management (FUM) across the Group’s boutique asset managers decreased modestly to $28.8 billion as of 31 December 2025, down from $30 billion six months prior. This decline was influenced by net outflows, market performance, and foreign exchange movements, particularly the strengthening Australian dollar against the US dollar.

Ongoing Litigation and Future Outlook

The Group continues to face legal proceedings related to a 2014 merger, with an appeal currently underway in the Federal Court of Australia. While the litigation funder covers costs and liabilities, the outcome remains uncertain and could have future financial or governance implications.

Post period-end, Pacific Current Group entered a new senior secured loan facility agreement with IFP Group, LLC, supporting growth initiatives including acquisitions. This move suggests a strategic focus on selective expansion despite recent portfolio rationalisations.

Overall, Pacific Current Group’s half-year results reflect a period of transition, balancing portfolio reshaping, debt reduction, and shareholder returns amid a complex market backdrop.