Assets down 38% to $118m as Asset Plus repays all debt and pays 5cps special

Total assets fell 38.0% to $118.0m from $190.3m, and gross borrowings cleared from $33.0m to nil following the 35 Graham Street sale. Total equity declined 16.9% to $117.4m, reflecting the 5 cents per share special dividend paid during the year alongside continued statutory losses. The supplied historical baseline classifies total assets as below normal range, versus a 3-period mean of $214.8m and a prior range of $190.3m–$229.5m, confirming this is a step-change rather than a normal swing.

Rental revenue rose 27.9% to $6.8m from $5.3m, but the statutory net loss widened 7.5% to $5.7m. Operating cash flow turned negative at -$0.1m versus +$0.4m, while cash on balance climbed to $10.9m from $3.7m. NTA per share sits at $0.324 and the announced final dividend is only 0.2 cents.

With total assets at $118.0m against a 3-period historical mean of $214.8m, and $33.0m of bank debt fully repaid, Asset Plus is now materially smaller and unlevered. The implication is that prior-period comparisons for revenue, NPAT and ROE increasingly describe a different portfolio rather than like-for-like operating performance, so headline growth and margin moves should not be read as recurring trends.

AFFO turned positive even as statutory results deteriorated. Management cites AFFO profit of $0.5m versus a $0.7m loss in FY24, against canonical PBT growth of -7.5% and NPAT growth of -7.5%. The gap reflects revaluation, finance and other non-cash effects that flow through statutory profit but not the property-cash measure. AFFO is currently the cleaner read on recurring property cash earnings, but the divergence needs to narrow once the portfolio settles before statutory numbers can be relied on.

Cash quality deteriorated against an unusual backdrop. OCF moved to -$0.1m from +$0.4m, while pre-lease FCF improved to -$0.3m only because capex collapsed 97.9% to $0.1m, leaving capex at 2.0% of revenue. The supplied baseline marks pre-lease FCF as above normal range against a 3-period mean of -$33.2m, but that improvement is the absence of development spend, not recurring earnings power.

The HY25 split shows revenue 47.5% first-half weighted ($3.2m of $6.8m), and the implied H2 NPAT of -$8.0m versus +$2.3m at the half largely reflects the timing of asset-sale accounting rather than a deteriorating run-rate. The 5cps special dividend has already been paid, and the announced final dividend is 0.2 cents.

With debt fully repaid and $10.9m cash on hand, capital flexibility is restored, but the release does not specify how that will be redeployed. This matters because, absent a stated growth or recycling target, current revenue and earnings are now the run-rate for a much smaller property base.

Revenue growth of 27.9% sits well above the 3-period mean of -25.7%, but is measured off a depleted FY24 portfolio and does not yet reflect the exit of 35 Graham Street. The figure is real but flatters underlying performance.

Pre-lease FCF improved to -$0.3m from -$6.1m, versus a historical mean of -$33.2m, yet almost all of that improvement is the absence of capex rather than stronger operating cash earnings: OCF itself turned negative and FCF-to-NPAT was just 4.8%. The current effective tax rate of 0.0% is within the historical range, so there is no tax distortion masking the operating read. ROE moved to -4.9% from -3.7%, within the supplied normal range but weaker. The economic read is that FY25 reflects a transitional balance sheet, and durable cash earnings remain to be demonstrated by the post-divestment portfolio.

This briefing cannot assess forward portfolio composition, leasing reversions, weighted average lease term, or the scale of any pipeline development without disclosed forward-work data.