Clime Capital Limited has reported a striking turnaround in its half-year results, posting a $5.1 million profit driven by strong unrealised gains and increased distributions, alongside a strategic restructure of its convertible notes.
- Net income jumps to $10.48 million from $464k
- After-tax profit of $5.1 million versus prior loss
- Convertible notes restructured with higher coupon and extended maturity
- Dividends maintained at 1.35 cents per share, 50% franked
- Net tangible assets per share improve to $0.800 pre-tax
Strong Half-Year Performance
Clime Capital Limited (ASX: CAM) has delivered a remarkable financial turnaround for the half-year ended 31 December 2025, reporting net income of $10.48 million, a dramatic increase from just $464,000 in the previous corresponding period. This surge was primarily driven by significant unrealised gains on its investment portfolio, amounting to $8.65 million, reversing prior losses and underscoring the company’s effective portfolio management amid favourable market conditions.
Profit after tax attributable to members reached $5.1 million, a stark contrast to the $708,000 loss recorded in the prior half-year. The improvement was supported by higher dividend and trust distributions, which rose 40% to $4.16 million, reflecting a more robust income stream from underlying investments.
Convertible Notes Restructure
In a strategic move to enhance its capital structure, Clime Capital restructured its unsecured, redeemable convertible notes (ASX: CAMG) during the period. Noteholders approved an increase in the coupon rate from 5.25% to 6.5% per annum, with payment frequency shifting from quarterly to monthly, and the maturity date extended to 30 November 2028. This restructure involved redeeming 5.26 million notes and issuing 11.66 million new notes, expanding the gross assets available for investment.
The restructure was accounted for as a non-substantial modification, resulting in a non-cash remeasurement expense of approximately $704,000. The effective interest rate on the restructured notes increased to 6.16%, reflecting the enhanced yield for noteholders.
Dividend Continuity and Shareholder Returns
Clime Capital maintained its commitment to shareholder returns, declaring and paying quarterly dividends of 1.35 cents per share, 50% franked. The company also operates a dividend reinvestment plan, which was applied to all dividends paid during the half-year, supporting shareholder value through reinvestment options.
Net tangible assets per share improved to $0.800 pre-tax and cum-dividend, up from $0.773 at the previous June 2025 half-year, indicating a strengthening balance sheet position. Post-tax NTA per share also rose to $0.835, reflecting the positive impact of the half-year’s performance.
Operating Costs and Fee Accruals
Operating expenses increased to $1.88 million, primarily due to the accrual of $603,740 in performance fees, which will only be payable if crystallised at year-end. Management fees and other administrative costs also rose moderately, consistent with the company’s expanded asset base and operational scale.
The interim financial statements were reviewed by KPMG, who issued an unqualified opinion, affirming the accuracy and compliance of the reporting.
Outlook and Strategic Positioning
With a stronger capital base, improved profitability, and a restructured convertible note facility offering enhanced returns, Clime Capital appears well-positioned to navigate the evolving investment landscape. The company’s focus on domestic securities and unlisted unit trusts remains unchanged, with no significant shifts in principal activities reported.
Investors will be watching closely how the accrued performance fees crystallise at year-end and whether the company can sustain its dividend policy amid market fluctuations.
Bottom Line?
Clime Capital’s half-year results mark a clear rebound, but the crystallisation of performance fees and ongoing market conditions will test its momentum.
Questions in the middle?
- Will the accrued performance fees crystallise fully at year-end, impacting net profits?
- How will the market respond to the increased coupon rate and extended maturity of the convertible notes?
- Can Clime Capital sustain its dividend payouts if unrealised gains fluctuate in future periods?