Excelsior Capital Reports $1 Million Profit, Declares 4c Dividend Amid Transition

Financial Results Reflect Transition Post-CMI Sale

Excelsior Capital Limited (ASX – ECL) has released its audited preliminary final report for the year ended 30 June 2025, revealing a dramatic decline in profit after tax to $1.0 million, a 98% decrease from the previous year’s $50.4 million. This sharp fall is primarily attributable to the absence of the $47.2 million gain recorded in FY24 from the sale of its wholly owned subsidiary, CMI Operations Pty Ltd (CMI Electrical), which was divested in January 2024.

Revenue from continuing investment activities, however, showed a robust 73% increase to $5.9 million, reflecting the company’s ongoing focus on managing a diversified investment portfolio following the exit from its operating business. The investment portfolio remains Excelsior’s sole business division, emphasizing a non-market correlated strategy aimed at delivering positive absolute returns with low volatility.

Dividend Maintained Amid Profit Decline

Despite the significant profit contraction, the board declared a fully franked final dividend of 4.0 cents per share, consistent with the interim dividend paid earlier in the year. This dividend policy underscores the company’s commitment to returning value to shareholders even as it navigates the post-sale transition period. The franking credit balance remains healthy at $38.9 million, supporting future dividend payments.

Strong Balance Sheet and Cash Position

Excelsior’s financial position remains solid, with net assets of $113.7 million and cash and cash equivalents of $64.7 million at year-end. The company’s capital management strategy continues to focus on maximising shareholder value through a balanced approach to capital allocation, including dividend payments and potential future investments. Operating cash flows were negative $6.3 million, reflecting ongoing investment activity, while investing cash outflows totalled $15.3 million as the portfolio was actively deployed into new opportunities.

Governance and Legal Challenges

The year also saw a notable governance challenge with a Federal Court application lodged by shareholder London City Equities Limited seeking to wind up Excelsior Capital on grounds of alleged unfair conduct. The application also includes a request for an order compelling a board member to acquire LCE’s shares at a premium. The outcome of this legal action remains uncertain and represents a material risk factor for investors.

The board composition remained stable during the year, with Leanne Catelan transitioning from Executive to Non-Executive Director in May 2025. Chairman Danny Herceg continues to lead the company, bringing extensive corporate and legal expertise to the governance framework.

Outlook and Strategic Focus

Looking ahead, Excelsior Capital is focused on leveraging its investment portfolio to generate sustainable long-term returns. The company’s strategy emphasises diversification across asset classes and geographies, with a cautious approach to risk management. Executive remuneration remains aligned with performance, although no short-term or long-term incentives were paid during FY25, reflecting the company’s conservative stance amid market uncertainties.

Auditors Hall Chadwick issued an unqualified opinion on the financial statements, affirming the integrity of the reported results and disclosures. Investors will be watching closely how Excelsior navigates the legal proceedings and capitalises on its investment opportunities in the coming year.