Nexion Group Ltd reports a striking turnaround to a $6.3 million net profit in H1 2026, driven by gains from subsidiary sales, while continuing operations still face losses amid efforts to regain ASX trading status.
- Net profit of $6.3 million driven by disposal of subsidiaries
- Continuing operations loss narrowed to $78,778
- Sale of Nexion W1 DC, Nexion Networks, and Blue Sky Telecom completed
- Ongoing revenue from vendor finance and data centre maintenance contracts
- ASX trading suspension remains; company pursuing reinstatement
Strategic Divestments Drive Financial Turnaround
Nexion Group Ltd has reported a remarkable financial turnaround for the six months ended 31 December 2025, posting a net profit of $6.3 million compared to a loss of $500,653 in the previous corresponding period. This dramatic swing was primarily fuelled by substantial gains realised from the sale of its key subsidiaries: Nexion W1 DC Pty Ltd, Nexion Networks Pty Ltd, and Blue Sky Telecom Pty Ltd.
The divestments, completed between July and October 2025, generated significant cash inflows and vendor finance arrangements that have bolstered the Group’s balance sheet. The sale of Nexion W1 DC Pty Ltd to Carrier Connect Data Solutions Inc. alone brought in $2.5 million in consideration, including secured vendor finance, while the disposal of Nexion Networks and Blue Sky Telecom to Pier DC Pty Ltd contributed further gains exceeding $3.4 million.
Continuing Operations Show Signs of Stabilisation
Despite the impressive headline profit, Nexion’s continuing operations still recorded a loss of $78,778, albeit a significant improvement from the $582,922 loss in the prior period. The ongoing business now centres on data centre operations and maintenance services delivered by its subsidiary Nexion Infrastructure Pty Ltd, alongside efforts to expand its software footprint through deployment of FuseAI’s enterprise asset management solutions.
Recurring revenue streams include vendor finance repayments totalling approximately $32,567 per month and a data centre maintenance contract generating $10,000 monthly. These provide a foundation for the Group’s future operational stability as it pivots away from its previous broader telecommunications portfolio.
Challenges Remain: ASX Suspension and Going Concern Uncertainty
While the financial results reflect a positive shift, Nexion’s shares remain suspended from trading on the ASX. The company is actively seeking approval to reinstate trading, a process that is ongoing and critical for its ability to raise additional capital. The directors have flagged plans for a capital raise to support working capital and operational needs once reinstatement is achieved.
Auditors have highlighted material uncertainty regarding the Group’s ability to continue as a going concern, citing low cash reserves of $38,724 and net current liabilities of $239,549 as at 31 December 2025. The Group’s ability to meet its obligations hinges on successful capital raising and continued vendor finance repayments.
Corporate Governance and Financial Discipline
During the period, the Group issued 2.4 million convertible notes and subsequently cancelled 17.5 million notes as part of the subsidiary sales transactions, reflecting active management of its capital structure. No dividends were declared or paid, consistent with the Group’s focus on strengthening its financial position.
The Board, led by Executive Chairman Peter Christie, remains focused on streamlining operations and pursuing growth opportunities in the software sector, particularly leveraging FuseAI’s technology. The company’s strategic refocus aims to position it for sustainable profitability beyond the gains from asset sales.
Bottom Line?
Nexion’s impressive profit turnaround masks ongoing operational and financial challenges that hinge on ASX reinstatement and capital raising.
Questions in the middle?
- When will Nexion secure ASX reinstatement and what will be the terms of any capital raise?
- How sustainable are the recurring revenues from vendor finance and data centre maintenance contracts?
- What progress is being made in deploying FuseAI’s software and expanding the Group’s software business?