$0.80 million profit and $2.738 billion FUMA mark Clime’s FY26 update

Profit Growth Meets an Unfinished Audit Process

Clime Investment Management Limited (ASX:CIW) has paired a stronger FY26 profit result with a less comfortable disclosure: payment of its performance fee has been deferred while the company completes a board-led review into valuation evidence for private credit and unlisted assets.

Net profit after tax rose 57% to $0.80 million, while profit before tax from continuing operations increased 47% to $1.40 million. The improvement came despite total operating revenue falling 17% to $7.57 million, reflecting restructuring, divested or closed fund structures and a sharp reduction in corporate advisory fees to $0.5 million from $2.5 million.

The result included $3.94 million of other income from strategic transactions, including the divestment of the Clime International and All Cap Funds and the reduction of Clime’s equity stake in James Street Wealth. Performance fees also contributed $2.29 million, although the company has not yet paid the FY26 fee to itself. Its release says payment will wait until the board review is complete.

Private Credit Valuations Drive Review

Clime said increased regulatory scrutiny of private credit and unlisted asset valuations led its auditor to request additional independent valuation evidence relating specifically to Clime Capital Limited (ASX:CAM). That evidence was not available before the 30 September reporting deadline, prompting the audit delay and the appointment of independent consultants and valuers.

The issue is directly connected to the concerns outlined in the earlier CAM valuation review, which reported that KPMG had qualified its audit opinion over evidence supporting CAM-related revenue and receivables. The current filing gives no timetable for completing the board review, nor does it quantify any potential valuation adjustment.

Funds Under Advice Rebound as Clime Narrows Its Focus

Clime entered FY27 with total funds under management and advice of $2.738 billion, up $236 million or 9.4% during the September quarter. The figure includes $829 million directly managed by Clime and $1.9 billion managed or advised through strategic investments in advisory groups.

The company said direct investment management and asset consulting are now preferred to separately managed accounts distributed through third-party platforms. SMA FUM fell 17.2% during the quarter, while the filing’s table shows growth in IMAs and direct FUM&A and a larger increase in asset consulting and mandates. Clime said direct relationships offer greater flexibility, client engagement and margin sustainability, although those advantages remain a stated strategic preference rather than a reported financial outcome.

Dividend Intention Depends on Review Outcome

Clime still intends to declare a fully franked final dividend of 0.50 cents per share, but has made that intention subject to the board review. Net tangible assets stood at $17.51 million, or 21.3 cents per share, at the end of FY26.

Investment performance provides a more favourable counterpoint to the audit uncertainty. CAM’s gross portfolio return was 17.7% in FY26 before fees, compared with 5.7% for the S&P/ASX All Ordinaries Index. Clime said the outperformance reflected a more disciplined application of its intrinsic value approach and investment in its multi-asset team.

The next test is whether the review converts those operational gains into clean, finalised accounts and distributable cash. Until the valuation work is resolved, the proposed dividend and deferred performance fee remain intentions rather than settled shareholder returns.