PAC caps FY26 with a debt-free balance sheet, a 12% dividend lift and a strategic review
In its Full Year FY26 results presentation, delivered on 27 August 2026 by Managing Director Michael Clarke and Chief Financial Officer Ron Patel, Pacific Current Group reported underlying net profit after tax (NPAT) of A$14.8m on a deliberately smaller earnings base following boutique exits and capital returns.
Three headline hooks framed the update. Dividends rose 12% to A$0.48 per share (partially franked), financial debt was fully eliminated, and a strategic review is underway following a non-binding indicative proposal from River Capital.
Management was explicit that the 43% decline in underlying NPAT (from A$26.0m in FY25) is a planned consequence of realisations, reflecting a reshaped earnings base rather than any deterioration in the business.
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FY26 results: a smaller, cleaner, debt-free base
The underlying result showed the cushioning effect of capital returns on per-share earnings. Underlying earnings per share fell only to 50.2 cents, from 55.8 cents in FY25, a lesser decline than headline NPAT. This was supported by a 36.8% reduction in weighted average shares on issue from PAC’s on-market buy-backs.
The income mix has shifted decisively toward yield. Interest income of A$16.8m now represents 67% of underlying income and covers corporate overheads 3.1x. Total overheads were cut 41% to A$9.4m, reflecting continued disciplined cost management.
The balance sheet transformation was the standout structural change. The A$62.2m senior secured facility with Washington H. Soul Pattinson (WHSP) was fully repaid in October 2025, removing approximately A$4.0m of net interest expense and eliminating financial debt.
Fair value NAV rose 4% to A$16.18 per share, with cash and financial assets of A$258.0m at year end.
| Metric | FY26 | FY25 | Change | Why it matters |
|---|---|---|---|---|
| Underlying NPAT | A$14.8m | A$26.0m | −43% | Planned decline from realisations, not deterioration |
| Underlying EPS | 50.2c | 55.8c | Lesser decline | Buy-backs cushioned the per-share impact |
| Dividend per share | A$0.48 | A$0.43 | +12% | Higher return despite smaller earnings base |
| Total overheads | A$9.4m | A$15.9m | −41% | Cost discipline improves cash conversion |
| Fair value NAV per share | A$16.18 | A$15.51 | +4% | Portfolio value supported despite exits |
Understanding PAC’s fair value NAV
PAC reports two net asset value figures, and the distinction matters for investors. International accounting standards (IFRS) require a mixed measurement basis: some investments are carried at fair value, while others are held at cost and can be written down but never up.
Statutory NAV therefore understates portfolio value. At 30 June 2026, fair value NAV of A$16.18 exceeded statutory NAV of A$13.96, a A$2.22 (16%) uplift.
Why does this matter? According to the presentation, corporate transactions at portfolio companies could crystallise further upside to these fair value estimates. Management also noted that comparisons of fair value estimates over time can be significantly affected by currency movements.
Portfolio reshaped through A$35.8m of realisations
The year’s transactions were presented as a deliberate simplification of the portfolio, with total strategic realisations of A$35.8m. Key movements included:
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Partial sale of Victory Park Capital (Sep 2025): 2% equity plus 0.8% of Holdco future carry sold to CNO Financial Group for US$5.5m (A$8.1m), with A$7.7m net received.
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Full exit from Janus Henderson Group (Nov 2025): entire holding sold for US$9.4m (A$13.9m).
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Partial exit from Abacus Global Management shares (FY26): A$11.4m.
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Exit from Aether (Jun 2026): entire revenue share and GP stake sold for US$1.8m (A$2.6m).
The Aether exit, completed in June 2026, removed A$2.3b from the portfolio and drove a headline decline in total FUM, though the Q4 FY26 FUM update confirmed that continuing boutiques grew 1.8% over the same period, with five boutiques contributing positively to the result.
- WHSP senior debt fully repaid (Oct 2025): US$42.1m (A$62.2m), including a US$0.8m early-repayment premium.
Capital was recycled into yield-generating secured lending to PAC’s own boutiques. Three new secured loan facilities, with a Roc affiliate (A$2m), NLAA (US$2.1m) and IFP (US$25.1m), total A$42.1m committed at 10–11% per annum, with A$14.6m drawn at 30 June 2026.
IFP facility gaining momentum
The Independent Financial Partners (IFP) facility was highlighted as a standout growth story. As at 30 June 2026, US$8.2m of the US$25.1m facility was drawn (approximately 33%), carrying a circa 10% base rate, a four-year bullet maturity and first-ranking security.
IFP’s Funds Under Advice has grown to circa US$21b, up from US$16b when the facility was announced. Management noted that in the first half of CY26, IFP recruited the same amount of revenue as in all of CY25. A leadership transition saw Chris Hamm appointed CEO, with Bill Hamm becoming Executive Chair. The facility supports PAC’s contractual yield and 44.9% economic interest.
The facility was structured to support IFP’s IFP advisor acquisition strategy, with a progressive drawdown mechanism requiring lender approval at each stage, giving PAC direct oversight of how capital is deployed into the US advisor market.
Strategic review: River Capital proposal on the table
Separately announced on the same day, PAC disclosed a comprehensive, formal strategic review to explore options to optimise value for all shareholders. The presentation was careful to note that no decision has been made and there is no certainty any transaction will proceed.
The review follows a non-binding indicative proposal from River Capital Pty Ltd, an established Australian investment manager with circa $1b of AUM. Under the proposal, PAC would acquire River Capital for circa A$80m, satisfied by circa 6.3m PAC shares implying a value of A$13.00 per share, subject to a two-year escrow.
The proposal also contemplates a bookbuild: funds managed by River Capital hold circa 10m PAC shares, proposed to be sold down via a managed bookbuild at no less than A$13.00 per share, broadening the free float. The presentation noted that the A$13.00 per share value is reduced by the cash amount of any dividend or distribution declared or paid after 30 June 2026 and prior to completion.
Three options are under review:
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Progress the River Capital proposal.
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Sale of PAC.
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Delist from the ASX and undertake an orderly realisation of holdings.
Any transaction would be subject to satisfactory due diligence, shareholder approval, an independent expert report, the bookbuild selldown and regulatory approvals. Flagstaff Partners has been appointed as financial adviser and Ashurst Perkins Coie as legal adviser, with an update anticipated at or before the Annual General Meeting.
Total shareholder returns and FY27 priorities
PAC delivered a total shareholder return of 10.4% in FY26 and 18.4% per annum over the five years to 30 June 2026, well ahead of the S&P/ASX 200 Accumulation Index at 6.1% and 7.8% per annum respectively.
Looking ahead, management outlined FY27 priorities, all subject to the outcome of the strategic review:
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Preserve capital optionality by maintaining balance sheet strength, with deployment opportunities assessed in light of the review.
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Return capital to shareholders, funding dividends from underlying cash earnings, with the buy-back and further returns assessed alongside the review.
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Continued expense reduction, with corporate expenses expected to decline materially in FY27 as interest costs and investment management fees roll off.
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Sharpen the operating model by embedding the governance and structural changes now in place.
FY26 delivered several proof points underpinning this position:
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A$62.2m senior debt repaid.
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A$158m cash at 30 June 2026.
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2.2m shares bought back.
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A$35.8m realisation proceeds.
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