Powerhouse Ventures opens new venture lane as quarterly profit rises

Profit growth arrives as markets remain difficult

Powerhouse Ventures Limited (ASX:PVL) increased quarterly pre-tax operating profit by 46% year on year to A$340,000, even as smaller growth companies faced a difficult September quarter. Operating revenue fell 9% to A$872,000, but customer receipts rose 38% to A$708,000, helping the investment house narrow its operating cash outflow before tax to A$25,000 from A$126,000 a year earlier.

The cash picture is less tidy after tax. Powerhouse paid A$207,000 in income tax during the quarter, leaving the Appendix 4C showing net cash used in operating activities of A$232,000. Cash at quarter end was A$1.396 million, with no drawn finance facilities, which the company calculates as roughly six quarters of funding at the quarter’s operating cash-flow rate.

Advisory fees and co-investment broaden the earnings mix

Powerhouse Advisory completed three transactions during or shortly after the quarter: a pre-IPO raise for defence technology company Sightec, the sale-side merger of Sprout Organic with Nutritional Growth Solutions (ASX:NGS), and the ASX listing of Philippine gas explorer Tetragon Energy (ASX:TET).

The Sightec mandate was the standout transaction. Powerhouse led an A$8.5 million pre-IPO capital raising for the drone technology company, whose GPS-denied NavSight system is deployed on more than 4,000 drones, with further capital committed under a deferred close. Powerhouse and its funds management division invested about A$700,000 on the same terms as introduced investors, including A$440,000 from the group balance sheet. It remains engaged as Sightec’s Australian capital-markets adviser, including on a potential ASX listing.

Powerhouse’s earlier shareholder-approved Sprout merger was completed on 1 October, outside the quarter, and created a listed children’s nutrition platform through NGS. Separately, Tetragon closed at A$0.31 on 28 October, 55% above its A$0.20 IPO issue price, according to the release’s cited Intelligent Investor comparison.

New venture product targets dual-use technology

The quarter also marked the launch of Powerhouse Venture Partners, a third client-facing business unit alongside advisory and funds management. Its first product, SPV 1, brings together five Australian companies working in what Powerhouse calls the physical layer of AI, with a focus on dual-use technologies and strategic capability.

Two companies already held on Powerhouse’s treasury balance sheet are included in SPV 1. That structure is intended to begin converting existing balance-sheet exposure into annuity-style revenue, although the release does not disclose the product’s funds raised or expected fee income. The venture platform is designed around a three-to-five-year investment horizon and active support for commercialisation.

Aliwa fund holds ground in a hostile microcap quarter

The listed Aliwa Alpha Fund returned 1.5% net in the September quarter, broadly matching its benchmark after gaining 4.99% in August and giving back 2.7% in September. That followed a 34.73% net return for FY26, which Powerhouse said placed the fund second among 100 funds in FundMonitors.com’s Australian small and mid-cap equity peer group.

Powerhouse is now raising capital for Aliwa from wholesale and sophisticated investors after completing the fund’s restructure. Its own balance sheet stood at A$20.9 million of net tangible assets at 30 September, up 8% year on year, while NTA per share remained unchanged at 12.3 cents. Liquid treasury assets of A$7.15 million included A$1.40 million in cash and A$5.75 million in ASX-listed securities, an asset base that had previously been reported as A$6.14 million during the market downturn in April asset-base update.

The next test is recurring revenue, not just transaction flow

Powerhouse says its pipeline includes further ASX-listed mandates and pre-IPO raisings, but those opportunities remain subject to market conditions and completion. The more consequential test may be whether SPV 1 attracts capital and develops into a repeatable product rather than remaining a one-off repackaging of existing investments.

The group has liquidity to pursue that strategy, but its quarterly cash flow still depends on advisory receipts, investment realisations and portfolio performance. The next updates should reveal whether new venture-product income begins to supplement transaction fees, and whether the six-quarter funding estimate changes as Powerhouse commits more capital to its merchant-investing model.