L1 Long Short Fund (LSF) H1 2025 earnings summary

Executive summary

• Reported a net loss after tax of $74.97 million for the half-year ended 31 December 2024, compared to a profit of $55.70 million in the same period last year.

• The loss was attributed to challenging market conditions, with gains in global leaders and gold equities offset by underperformance in value stocks, short positions in domestic banks, lower energy prices, and stock-specific detractors.

• No significant changes in the company's principal activities occurred during the period.

• Investment team maintains high conviction in "quality value" stocks with expected catalysts over the next 2-3 years.

Financial highlights

• Operating loss before tax was $111.53 million, compared to a profit of $73.01 million in the prior year period.

• Net tangible asset (NTA) backing before tax was $2.9417 per share as of 31 December 2024, down from $3.0408 per share a year earlier.

• No performance fee was paid to the investment manager as the high watermark was not exceeded (prior year: $18.75 million paid).

• Fully franked final dividend of 6.00 cents per share paid in October 2024; interim dividend of 6.25 cents per share declared for April 2025.

• Cash and cash equivalents at period end were $1,009.1 million, down from $1,332.7 million at 30 June 2024.

Outlook and guidance

• The company continues to focus on delivering positive absolute returns and capital preservation over the long term.

• The on-market share buy-back program of up to 10% of shares remains in place until 30 May 2025, with no shares bought back during the half-year.

• Investment manager remains committed to value and contrarian strategies, expecting positive catalysts for portfolio holdings in the next 2-3 years.