ARC Funds’ Revenues Soar 508% as Loss Widens to $1M in H1 FY26
ARC Funds Limited posted a $1 million loss for the half-year ending December 2025, while significantly increasing revenues and expanding its ownership in The Term Deposit Shop to 74.48%. The company raised nearly $1.9 million to support growth initiatives amid ongoing operational challenges.
- Half-year loss widens to $1,004,818 from $385,150 prior period
- Revenues surge 508% to $560,339
- Capital raised totals $1.88 million during the period
- Ownership in The Term Deposit Shop increased to 74.48%
- Convertible notes in Ausbiz TV sold for $500,000, strengthening balance sheet
Financial Performance and Losses
ARC Funds Limited reported a statutory loss after tax of $1,014,823 for the half-year ended 31 December 2025, a marked increase from the $403,220 loss recorded in the previous corresponding period. Despite this, the company’s revenues grew impressively by over 500%, reaching $560,339, driven primarily by its core platform fees and funds management activities.
The reported loss includes significant non-cash and one-off items such as impairment charges on investments and share-based payments to executives and board members. When these are excluded, the underlying cash loss aligns with the company’s operating cash outflow of approximately $600,000, consistent with management’s expectations.
Strategic Investments and Capital Raising
During the period, ARC Funds successfully raised $1.88 million through equity placements, providing a vital capital foundation to pursue its growth strategy. A key highlight was the increased stake in The Term Deposit Shop Pty Ltd (TTDS), with ARC acquiring an additional 10.99% ownership post-balance date, lifting its total holding to 74.48%. This acquisition was settled through the issue of fully paid ordinary shares at 11.5 cents each.
TTDS remains the cornerstone of ARC’s business, managing over $530 million in funds under administration and continuing to generate profitable cash flows. The company plans further investment in TTDS to enhance technology, expand distribution channels, and grow its client base.
Disposal of Convertible Notes and Portfolio Review
ARC also made a strategic move by acquiring convertible notes in Ausbiz TV Pty Ltd valued at $2.15 million face value for $430,000 during the half-year. Subsequently, the company agreed to sell these notes for $500,000, with completion expected in March 2026. This transaction will bolster ARC’s balance sheet and provide additional liquidity for future opportunities.
Importantly, ARC retains its strategic investment in Ausbiz Capital Pty Ltd, holding a 26.35% stake, despite recognising an impairment loss of $304,279 due to sustained operating losses at Ausbiz Capital. The company remains committed to maximising value from this investment.
Governance and Outlook
Governance changes included the appointment of John Powell as executive chairman of TTDS to accelerate growth ambitions. ARC Funds continues to focus on acquiring and nurturing cash flow positive businesses that complement its financial services ecosystem.
While the company’s cash position remains healthy, and costs are well managed, the directors acknowledge a material uncertainty regarding going concern due to ongoing losses and negative operating cash flow. Nonetheless, with shareholder support and access to capital markets, ARC Funds is confident in its ability to continue executing its strategy.
Bottom Line?
ARC Funds’ next moves in expanding TTDS and managing its investment portfolio will be critical to reversing losses and delivering shareholder value.
Questions in the middle?
- How will ARC Funds manage the material uncertainty around its going concern status?
- What are the growth prospects and timeline for profitability improvements at The Term Deposit Shop?
- Will ARC pursue further acquisitions or capital raises to support its expansion strategy?
