ASF Group builds cash reserves as investment portfolio reshapes

Disposals lift cash while earnings normalise

ASF Group Limited (ASX:AFA) finished FY2026 with a much stronger balance sheet, but a far smaller headline profit. Profit attributable to shareholders fell to A$4.09 million from A$25.82 million, with the prior-year figure inflated by a one-off gain linked to the conversion of the Star Diamond convertible loan and the disposal of the Group’s interest in CMR Coal.

The year’s result was instead principally supported by investment realisations. ASF recorded about A$4.8 million in gains from disposals, including its interests in Kaili Resources, Key Petroleum, Rey Resources, ASF Technologies and ASF Coking Coal. The largest individual gain came from the sale of ASF Coking Coal for A$3.08 million, which produced a gain of A$2.61 million.

Cash reaches A$5.19 million with no borrowings

The disposals materially changed ASF’s financial position. Cash and cash equivalents rose from A$1.27 million at 30 June 2025 to A$5.19 million, while net assets increased from A$1.67 million to A$5.65 million. The Group also reported no outstanding borrowings, although it continued to carry lease liabilities of A$220,921.

That improvement came alongside continuing operating pressure. Revenue declined to A$560,444 from A$799,724, and operating activities consumed A$1.15 million in cash. ASF paid no dividend, leaving capital allocation decisions, including investment purchases and the buy-back, as the main routes through which surplus cash may affect shareholders.

Resources and technology exposure remains

ASF retained exposure to selected resources and technology assets after the portfolio pruning. Its stake in ActivEX stood at 12.98% at year-end, alongside exposure to the Mt Hogan resource within the Gilberton Gold Project, where ActivEX reported a maiden JORC resource of 8.5 million tonnes at 1.13 grams per tonne for 310,000 ounces of gold.

The Group also acquired Rey Surat Gas through a debt-to-equity conversion. Rey Surat holds about 5.54% of PZE Limited, which provides indirect exposure to the Silver Springs and Surat Basin gas projects. ASF valued that investment at A$750,000, but classified it as a Level 3 fair value asset based on significant unobservable inputs. The auditor identified the valuation as a key audit matter, making future evidence around the holding’s value particularly relevant.

Buy-back expands as digital platform remains pre-commercial

ASF extended its on-market share buy-back for another 12 months from 8 September 2026, allowing the company to acquire up to 79.1 million shares. Only 464,958 shares were bought back during FY2026, for A$28,447, so the extended authority is materially larger than the activity recorded during the reporting year.

At the same time, ASF Capital’s proposed institutional digital asset platform remains at the planning stage. No client accounts have been opened, no client assets accepted and no trading services commenced; any commercial launch remains subject to board approval and regulatory compliance. The next test for ASF is therefore less about another disposal and more about whether its retained investments and operating businesses can generate value without relying on another round of portfolio sales.