Infotrust completes strategic pivot with $50 million Nexgen sale
Infotrust Ltd (ASX: ITS) has concluded its restructure programme with the Infotrust Nexgen Sale Aussie Broadband transaction, divesting its Cloud & Communications segment for up to $50 million. The deal values Nexgen at 7x EBITDA based on FY25 results, positioning the company as a pure-play cyber security and secure managed technology provider on the ASX.
The transaction structure provides $44.1 million on completion (expected around 1 April 2026), with a further $5.9 million contingent on achieving performance targets in FY26 and FY27. Management characterised the outcome as the completion of a strategic repositioning rather than a distressed asset sale, with the premium multiple validating underlying asset quality.
Strategic Repositioning
“Infotrust rebranded and focused on cyber and secure managed technology.”
The disposal enables immediate balance sheet deleveraging, with the $44.1 million cash injection set to substantially reduce net debt. Following completion, the company will consolidate operations into a single business unit and report under a unified Cyber Security segment, positioning itself as the largest sovereign pure cyber and secure managed technology organisation listed on the ASX.
Join thousands of readers who start here
Our best articles, sent straight to your inbox. You can unsubscribe anytime.
What does a pure-play cyber pivot mean for shareholders?
The divestment of Nexgen represents a fundamental shift in corporate strategy, moving from a diversified technology services provider to a focused cyber security specialist. Companies typically divest non-core assets to simplify their business models, allowing management to concentrate resources on areas with the strongest competitive positioning and growth potential.
A pure-play structure (single sector focus) often attracts specialist investors and commands higher valuation multiples compared to conglomerate businesses. This occurs because investors can more easily assess growth trajectories, competitive positioning, and capital allocation priorities when analysing a focused operation rather than multiple unrelated business lines.
For Infotrust, the sovereign cyber security focus aligns with escalating demand from Australian government and critical infrastructure operators. Regulatory frameworks increasingly mandate local security operations centres (SOCs) and incident response capabilities, particularly for organisations managing sensitive data or essential services. The company’s consolidated national footprint positions it to capture procurement spend tied to these sovereign security requirements.
H1 FY26 financial snapshot shows improving trajectory
The H1 FY26 results require careful interpretation due to accounting treatments under AASB 5, which governs assets held for sale. The standard mandates separation of continuing and discontinued operations, alongside recognition of a $15.6 million non-cash goodwill impairment related to the Nexgen disposal. This impairment reflects accounting treatment rather than operational cash outflow.
Stripping away the impairment reveals underlying business improvements across key metrics. Revenue from continuing operations reached $31.1 million, up 9% from $28.4 million in the prior corresponding period. Underlying EBITDA (uEBITDA) across continuing and discontinued operations improved 7% to $4.1 million from $3.9 million. The loss before impairment narrowed 45% to ($0.9 million), demonstrating operational momentum despite capital constraints that limited growth initiatives during the half.
| Metric | H1 FY26 | H1 FY25 | Change |
|---|---|---|---|
| Revenue (continuing operations) | $31.1m | $28.4m | +9% |
| uEBITDA (all operations) | $4.1m | $3.9m | +7% |
| Loss before impairment | ($0.9m) | ($1.7m) | +45% |
| Non-cash impairment | ($15.6m) | – | – |
| Reported loss | ($16.5m) | ($1.7m) | – |
Management noted that H1 growth was constrained by limited cash availability, restricting the company’s ability to pursue expansion initiatives and strategic acquisitions. This constraint is set to be removed following the Nexgen transaction completion, with the $44.1 million cash injection providing capital for both organic growth acceleration and inorganic expansion through targeted acquisitions.
Balance sheet transformation post-completion
As at 31 December 2025, Infotrust carried net debt of $26.4 million, comprising approximately $27 million in bank borrowings and $3.9 million in deferred consideration liabilities, partially offset by $4.6 million in cash holdings. The capital structure reflects the funding constraints that limited H1 operational flexibility.
The anticipated $44.1 million cash inflow on or around 1 April 2026 transforms this position, converting the company from a net debt to a net cash stance. This recapitalisation provides immediate acquisition firepower without requiring equity dilution, enabling management to action a pipeline of cyber security and secure managed technology acquisitions. Funding for these transactions will be sourced from sale proceeds and existing debt facilities, providing flexibility to pursue opportunities across targeted geographies and capability areas.
Growth strategy centres on four pillars
Management outlined a structured growth strategy built on four strategic pillars, each designed to expand market share and accelerate profitability within the cyber security and secure managed technology sectors.
- Customer Growth: Cross-selling and up-selling to existing clients, winning new customers through geographic expansion (WA, SA, Northern QLD), and sector-specific campaigns.
- Partnerships: Strengthening enterprise relationships, expanding technology provider alliances, and growing channel partnerships to extend reach.
- Expanded Offerings: Developing intellectual property to accelerate project delivery, launching new services including Secure Networking Solutions and SMB1001 Secure Workplace.
- Inorganic Growth: Targeted M&A in cyber security and secure managed technology to broaden capabilities and strengthen market positioning.
The company signed 41 new logos during H1, with 89% of sales recurring in nature, providing earnings visibility. The SOC operation delivered the fastest customer acquisition growth over the past three years, whilst the Managed Technology division is expected to double uEBITDA year-on-year. Management targets 15-20% organic growth across the Cyber division for the full FY26.
Geographic expansion focuses on establishing sales offices in WA, SA, and Northern QLD to build a comprehensive national footprint. Service capability expansion targets high-growth areas including Data Security, SOC, Assurance, Identity, Governance Risk and Compliance (GRC), and Incident Response. These capabilities are positioned to scale significantly in FY27 as internally developed products and services gain market traction.
FY26 outlook and guidance
Management provided H2 FY26 uEBITDA guidance of greater than $3 million from continuing operations, excluding any earnings contribution from pipeline acquisitions. This guidance establishes a profitability floor whilst providing upside optionality should acquisition opportunities be executed during the half.
The removal of cash constraints following the Nexgen disposal enables acceleration of growth initiatives that were delayed during H1. Margin accretion opportunities exist through expanded offerings and scale, with particular focus on products and services developed internally rather than third-party solutions. Management signalled confidence in the organic growth trajectory, with FY27 positioned as a scale-up year for new service lines.
Growth Outlook
“Infotrust to pursue both organic and inorganic growth as it strengthens its position as one of Australia’s leading providers of cyber security and secure managed technology solutions.”
High-growth focus areas include Data Security, SOC operations, Assurance services, Identity management, GRC advisory, and Incident Response capabilities. These service lines benefit from strong market tailwinds as Australian organisations prioritise cyber resilience in response to escalating threat environments and tightening regulatory frameworks around critical infrastructure protection.
Enjoyed this article?
We publish high-impact stories like this a few times a week. No spam.
Key investment considerations
The company’s investment thesis centres on five pillars that differentiate its positioning within the Australian cyber security market:
- National footprint with comprehensive SOC and incident response capabilities provides strong barriers to entry as a leading sovereign provider
- Strong market tailwinds across cyber security, cloud communications, and secure managed technology sectors
- Dual growth strategy combining organic expansion (geographic reach, new customer wins, cross-sell/up-sell) with acquisition-led capability enhancement
- Experienced board and executive team with deep expertise in managed services, technology consulting, and cyber security
- Streamlined and refocused solutions portfolio, with all business segments expected to accelerate profitability in H2 FY26
The sovereign positioning carries increasing strategic value as critical infrastructure regulations tighten and government procurement prioritises local capability. Scale advantages compound as cyber threat sophistication escalates, with larger providers better positioned to maintain 24/7 SOC operations, invest in threat intelligence, and respond rapidly to incidents across multiple client sites simultaneously.
The board comprises experienced technology executives who have led successful Australian technology companies, whilst the executive team brings sector-specific expertise across cyber security operations and secure managed technology delivery. This combination of governance oversight and operational capability positions the company to execute on both organic growth initiatives and targeted acquisitions as the balance sheet strengthens post-completion.
Want the Next Tech Security Play in Your Inbox?
Join 20,000+ investors getting FREE breaking ASX news delivered within minutes of release, complete with in-depth analysis. Click the “Free Alerts” button at Big News Blast to start receiving alerts the moment market-moving announcements hit the ASX across Tech, Healthcare, Finance, and beyond.