EQT Holdings delivered strong growth from its continuing businesses in FY26, but a superannuation exit, litigation and takeover uncertainty left group profit and dividends lower. The company says discussions with BGH Capital and TPG Global remain open, while targeting completion of the superannuation exit by the end of 2027.
- Continuing operations NPAT up 32.7% to $33.9 million
- Group NPAT fell 20.5% to $26.4 million after a $13.1 million impairment
- FY26 dividend reduced to 76 cents per share
- EQT continues limited due diligence with BGH Capital and TPG Global
- FY27 focus includes core growth, Willed investment and superannuation exit
Continuing businesses outperform the group result
EQT Holdings Limited (ASX:EQT) is presenting a split-screen investment story: the businesses it plans to keep are growing strongly, while the superannuation operation it is leaving behind continues to weigh on shareholders. Continuing operations generated $33.9 million in NPAT in FY26, up 32.7%, on revenue of $191.9 million, up 9.4%, and funds under management, administration and advice of $191.9 billion, up 15.1%.
That performance came from Trustee and Wealth Services and Corporate Trustee Services. TWS revenue rose 7.7% to $110 million, while CTS revenue climbed 13.8% to $53.2 million. CTS added 45 responsible entity and trustee appointments and 37 custody appointments, with custody revenue rising 34% to $6.3 million.
The contrast with the statutory result is stark. Group NPAT fell 20.5% to $26.4 million after a $13.1 million non-cash impairment linked to discontinued superannuation operations. Earnings per share dropped to 98.64 cents, while the full-year dividend fell to 76 cents per share, including a 20-cent final dividend.
Superannuation exit keeps capital tied up
The board says the decision to leave Superannuation Trustee Services followed a review of its growth prospects, capital requirements, market conditions and regulatory risks. EQT’s earlier superannuation exit plan included the impairment and legal costs, and the company now says it is targeting completion of the exit by the end of 2027.
That timetable is not cost-free. EQT says it will need to repay $36 million in loans to third-party superannuation promoters when the business exits, while continuing to manage Shield and First Guardian litigation and regulatory matters. Spending on litigation, regulatory notices and the exit reached $2.4 million in the first quarter of FY27, compared with $8.7 million across FY26; the quarterly figures are unaudited.
The capital trade-off explains the lower dividend. Chair Carol Schwartz said the board was balancing shareholder returns against the need to preserve financial flexibility through the exit process and ongoing litigation. The company also says its managing director, Mick O’Brien, gave up his FY26 short-term incentive entitlement after shareholder concern over remuneration outcomes.
Takeover discussions remain open but non-binding
EQT’s strategic transition is unfolding alongside interest from private equity firms. After the board rejected the initial proposals from BGH Capital and TPG Global as inadequate, the company says it has granted both bidders limited due diligence access with a view to improved offers. The board’s September takeover rejection left the door open, but today’s presentation repeats that there is no certainty of a formal binding offer or completed transaction.
For now, the board is arguing that the continuing businesses deserve to be valued separately from the problems being worked through in superannuation. It points to recurring revenue, market leadership in trustee services and structural demand linked to investment products and intergenerational wealth transfer. That is a strategic case rather than a transaction outcome: any improved proposal still has to satisfy the board’s assessment of long-term shareholder value.
FY27 growth plans face transition costs
Management’s FY27 priorities are to expand TWS and CTS, invest in technology, complete the superannuation exit and maintain balance-sheet flexibility. EQT has also committed $5 million to Willed, a digital wills and end-of-life services business, alongside a mutual referral agreement under which EQT will be the only professional executor and trustee service selectable on Willed’s platform.
The first quarter offered an uneven early read. Continuing-operations revenue increased 1.9% year on year, with CTS up 13.8% while TWS fell 3.2% as unusually strong estate-management revenue in the prior-year comparison normalised. EQT says regulatory notices stabilised during the quarter and expects costs tied to litigation and the exit to moderate, although its outlook assumes normal investment markets and no material change in regulation.
The central question is whether the growth of TWS and CTS can compound quickly enough to offset the cash demands, legal exposure and management attention required by the superannuation wind-down. Until that answer becomes clearer, takeover interest gives EQT optionality, but not certainty.
Bottom Line?
EQT has a stronger earnings profile without superannuation, but the value of that simplification depends on the cost and timing of the exit, litigation outcomes and whether either bidder improves its proposal.
Questions in the middle?
- Will BGH Capital or TPG Global convert their due diligence into improved or binding offers?
- Can EQT complete the superannuation exit by the end of 2027 while repaying the stated $36 million in loans?
- Will CTS growth and a recovering TWS offset litigation, regulatory and transition costs in FY27?