ProsperCap Corporation Limited (FY2025): Financial Analysis and Investor Insights

ProsperCap Corporation Limited (the “Group”) released its unaudited condensed interim financial statements for the six months and full year ended 31 December 2025. This report delivers a comprehensive review of the Group’s earnings, performance trends, key financial metrics, and material events impacting its outlook.

Key Financial Metrics: FY2025 Performance Overview

*1H FY25 is inferred as FY25 full year minus 2H FY25, for comparative purposes.

Historical Performance and Trends

• Revenue: The Group achieved revenue of S\$256.9 million for FY2025, up 4.1% YoY, driven primarily by higher contributions from refurbished hotels and strong market demand in select cities.
• Net Loss: Net loss narrowed to S\$29.9 million in FY2025 from S\$47.1 million in FY2024 (+36.6% YoY improvement), with similar positive momentum quarter-over-quarter in the second half.
• EPS: Loss per share improved to (1.86) S\$ cents in FY2025, versus (3.12) S\$ cents in FY2024.
• Net Asset Value: NAV/share declined slightly, reflecting accumulated losses but remains positive at S\$183.7 million in equity.
• Dividends: No dividends were declared for FY2025 or the prior year, as the Group is still in an accumulated loss position.

Exceptional and Material Items

• Asset Revaluations & Impairments:
  • Net revaluation gain on property, plant and equipment of S\$5.3 million was recognized in FY2025, compared to a large revaluation loss of S\$39.6 million in FY2024.
  • Impairment losses on land and buildings dropped sharply to S\$13.1 million (FY2024: S\$22.0 million), while reversals of past impairments increased to S\$12.3 million (FY2024: S\$4.2 million), reflecting higher property valuations.
• Insurance Claims:
  • Lower insurance income (S\$4.1 million in FY2025 vs S\$12.5 million in FY2024) was recognized, primarily related to the Crowne Plaza Stratford fire incident.
• One-off Deemed Listing Expenses:
  • In FY2024, S\$10.0 million of one-off listing expenses were recognized related to the reverse takeover (RTO) transaction.

Corporate Actions and Capital Structure

• Reverse Takeover (RTO): The RTO was completed in January 2024 with DTP Infinities becoming the accounting acquirer. This led to a significant change in shareholding structure and a share consolidation (100:1).
• Share Placement: In FY2024, the company issued 210 million new shares (net proceeds S\$66.4 million) to satisfy public float requirements.
• No Share Buybacks or Dilution in FY2025: Share capital remained unchanged during FY2025. There are no outstanding convertibles, treasury shares, or subsidiary holdings at year-end.

Cash Flow and Liquidity

• Operating Cashflow: The Group generated S\$47.9 million in positive operating cashflow for FY2025.
• Capex and Financing: S\$29.7 million was invested in property, plant, and equipment. Net cash used in financing activities was S\$18.4 million, mainly due to interest payments and lease liabilities.
• Liquidity: Cash and cash equivalents at period-end were S\$6.4 million. The Group remains reliant on committed credit facilities from its controlling shareholders, and ongoing financial support is critical to its going concern assumption.

Unusual Transactions & Related Party Dealings

• Significant management fees and expense recharges were paid to related parties (S\$9.4 million and S\$5.4 million, respectively, in FY2025).
• Interest expenses on loans from immediate holding company increased due to further drawdowns and reclassification of payables as loans.

Events with Material Impact

• Fire Incident: The Crowne Plaza Stratford fire in April 2024 led to business interruption, lower revenue in 1H FY25, and substantial insurance claims.
• Macroeconomic Environment: The Group acknowledges that the UK hospitality sector faces heightened cost pressures (inflation, energy, wage increases, tax changes) and subdued growth, making operational efficiency and revenue management priorities for 2026.
• Going Concern: The Group remains dependent on shareholder support and new credit facilities to meet obligations, though the Board believes it can continue as a going concern given the current support structure.

Chairman’s Statement

As global economic and geopolitical uncertainties persist, the UK hospitality industry in 2026 is moving from post-pandemic recovery into a period of consolidation. The sector now faces muted growth and heightened cost pressures, prompting a greater emphasis on operational efficiency. Coupled with sustained inflation, elevated energy prices, tax hikes, and rising manpower costs with intense competition, hotels operating with narrow margins and limited capacity to transfer costs may experience diminished profitability.

While domestic leisure travel remains steady, international arrivals are recovering but still affected by global economic conditions and exchange rates. Business travel growth is expected to stay slow due to restrained corporate spending and hybrid work trends. In the regions where the Group operates, PwC forecasts 2026 RevPAR growth at 1.5% and occupancy growth at 1.12%.

Despite ongoing global economic uncertainties and cost pressures, recent forecasts indicate a stabilising market that offers opportunities for well-positioned operators who embrace flexibility, innovation, and resilience. The Group will continue to innovate and transform its hotels to boost revenue. The recently completed Property Improvement Plans (PIP) at our four Hilton-branded hotels in FY2025 are already showing positive results.

For the next 6-12 months, the Group will continue to monitor and capitalise on contemporary industry trends to push for better revenue growth, while enhancing its operational efficiencies to improve its bottom line.

The Chairman’s statement is cautiously optimistic, noting industry headwinds but highlighting operational improvements and recent investments already contributing to better performance.

Conclusion and Investor Recommendations

Overall Assessment: ProsperCap’s FY2025 results show meaningful recovery in revenue and profitability metrics, with net loss and EPS improving substantially year-over-year. The Group has addressed prior impairments, and recent property investments are beginning to yield results. However, it remains in a net loss and negative operating margin position, with significant dependence on shareholder lending and capital support to meet obligations. The hospitality sector outlook is cautious, with margin pressures expected to persist.

• If you currently hold the stock:
  
  Consider holding for now if you have a medium- or long-term horizon. The company is showing operational improvements and has demonstrated shareholder support, but remains loss-making and subject to macroeconomic and industry risks. Monitor cash flow, capex discipline, and the ability to sustain asset values and occupancy rates.
• If you are not invested in the stock:
  
  Exercise caution before initiating a position. Wait for further evidence of sustained profitability, cash flow improvements, or a reduction in reliance on related-party support. The sector is likely to remain challenging, and the company’s current financial structure and loss history carry above-average risk.

Disclaimer: This analysis is based solely on the information disclosed in ProsperCap Corporation Limited’s FY2025 report. It does not constitute financial advice or a buy/sell recommendation. Investors should consult with a qualified adviser and consider their own risk tolerance and objectives before making investment decisions.

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