ABE Cuts Operating Cash Outflow by More Than Half in Q4 FY25
Australian Bond Exchange Holdings (ASX, ABE) reported a stronger Q4 FY25 with participation in a landmark digital currency pilot and the launch of an innovative AUD-denominated market-linked security, alongside improved cash flow and fresh capital raises.
- Participation in RBA-led Project Acacia exploring CBDCs and tokenised assets
- Launch of CRAFT AUD-denominated market-linked security
- Net operating cash outflow improved to $0.6 million from $1.3 million
- Raised $683,180 equity and secured $0.6 million debt funding
- Transition to growth phase with leaner, cost-efficient business model
Strategic Digital Innovation
Australian Bond Exchange Holdings Limited (ABE) has taken a significant step forward in modernising Australia's fixed income markets by joining Project Acacia, a pioneering pilot led by the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre. This initiative explores the integration of Central Bank Digital Currencies (CBDCs), stablecoins, and deposit tokens into the settlement of tokenised wholesale assets, aiming to enhance transparency, efficiency, and inclusivity in financial markets.
ABE’s CEO, Bradley McCosker, emphasised the importance of this collaboration, highlighting how atomic settlement using CBDCs could reduce risk, lower transaction costs, and shorten settlement cycles. This pilot positions ABE at the forefront of fintech innovation, potentially reshaping how bonds and other fixed income products are traded and settled.
Product Innovation and Market Expansion
In line with its commitment to democratise access to the bond market, ABE launched the CRAFT AUD-denominated market-linked security during the quarter. This new product caters to growing investor demand for tailored, globally aligned investment solutions that were previously difficult for Australian retail investors to access. The launch reinforces ABE’s leadership in providing innovative fixed income products through its proprietary technology platform.
The company’s focus on expanding sales across both private client and institutional channels has contributed to higher trading volumes and increased product demand, supporting its growth ambitions.
Financial Performance and Capital Management
ABE reported a net operating cash outflow of $0.6 million for Q4 FY25, a marked improvement from the $1.3 million outflow in the previous quarter. This positive trend reflects stronger trading performance and the benefits of cost-reduction initiatives implemented over the past year. The company’s disciplined approach to operational restructuring has resulted in a leaner, more efficient business model, now transitioning into a growth phase.
To support its expansion plans, ABE secured $683,180 through an equity capital raise and obtained $0.6 million in debt funding from the Australian Credit Opportunities Fund. The debt facility carries an 8% annual interest rate with a three-year term, providing near-term liquidity to fuel ongoing initiatives.
Outlook and Market Positioning
With a total available funding of approximately $2.5 million and an estimated 4.5 quarters of runway based on current cash flows, ABE is well-positioned to continue its strategic growth trajectory. The company’s dual focus on technological innovation and product diversification aims to break down traditional barriers in the bond market, offering greater access, efficiency, and transparency to a broader investor base.
As the digital asset landscape evolves, ABE’s involvement in Project Acacia and its new market-linked security launch signal a forward-thinking approach that could set new standards in the Australian fixed income sector.
Bottom Line?
ABE’s strategic pilot and product innovation mark a promising pivot toward growth, but market adoption and pilot outcomes remain key to watch.
Questions in the middle?
- How will Project Acacia’s pilot results influence ABE’s future product offerings and market strategy?
- What traction is the CRAFT market-linked security gaining among retail and institutional investors?
- How sustainable is ABE’s improved cash flow amid ongoing investment in innovation and growth?
