ZICO Holdings Inc. FY2025 Financial Results: A Return to Profitability and Strategic Transformation

ZICO Holdings Inc. (“the Group”), a multidisciplinary professional services provider listed on the Singapore Exchange (Catalist), has released its unaudited condensed interim financial statements for the financial year ended 31 December 2025. The Group’s results mark a notable turnaround from the previous year’s losses, driven by strategic divestments and a renewed focus on growth sectors such as wealth and fund management, trust advisory, and capital markets.

Key Financial Metrics and Performance Overview

*Derived from profit/(loss) after tax, divided by weighted average shares for the period.

Historical Performance and Exceptional Items

• Return to Profitability: The Group swung from a net loss of SGD5.6 million in FY2024 to a net profit of SGD0.9 million in FY2025, driven by a one-off gain from the disposal of its entire corporate secretarial services business.
• Revenue: Revenue from continuing operations grew modestly by 2.1% year-over-year, despite the divestment, reflecting resilience in core advisory and transactional services.
• Non-Recurring Gains: The Group recognized a significant one-time gain of SGD5.5 million from divestments, which was the primary driver of its return to profit.
• Profitability Recovery: Excluding the divestment gain, underlying profit would have remained challenged, as operating profit from core activities was still under pressure from higher provisions and write-offs.

Segmental and Geographic Highlights

• Advisory and Transactional Services (ATS): Remained the sole revenue contributor post-divestment, with revenue of SGD14.3 million in FY2025.
• Geographic Mix: Singapore contributed 58% of revenue, followed by Malaysia at 24%.
• Discontinued Operations: The divested corporate secretarial services contributed SGD2.0 million in revenue before disposal in 2025.

Cash Flow and Balance Sheet Developments

• Cash & Equivalents: Increased by SGD0.4 million to SGD3.8 million, reflecting proceeds from divestments and new convertible loans.
• Net Asset Value (NAV): Rose to SGD7.08 cents per share, up from 6.00 cents, reflecting improved equity position due to profits and fair value adjustments.
• Gearing: The Group used part of its divestment proceeds and a SGD2 million convertible loan to reduce debt and support working capital.

Corporate Actions and Capital Management

• Convertible Loan: The company raised SGD2 million via a convertible loan in 2025, with up to 49.3 million new shares potentially issuable upon conversion. This could increase dilution risk if exercised.
• Share Capital: 801,451 new shares were issued to employees under the performance share plan in September 2025. No share buybacks or treasury shares were reported.
• Dividends: No dividends were declared for FY2025, as management prioritizes cash retention for business growth and strategic investments.

Divestments and Strategic Pivot

• Major Disposal: The Group completed the sale of its corporate secretarial, trust, and related services subsidiaries in August 2025. This disposal has improved the Group’s liquidity and allowed strategic reallocation of resources.
• Strategic Refocus: The Group is now pivoting to wealth and fund management, trust advisory, and capital markets—sectors with promising growth potential in ASEAN. In FY2025, the Group’s capital markets arm, ZICO Capital, acted as the issue manager for two successful Singapore IPOs and is building a robust pipeline in line with efforts to rejuvenate the SGX market.

Unusual Items and Related-Party Transactions

• Exceptional Gains: The return to profit was largely due to the one-off gain from the disposal of subsidiaries. Without this, underlying performance would have remained modest.
• Related-Party Transactions: Dividend income and interest from associated companies were reported, alongside repayments and advances; all were conducted on normal commercial terms. No interested person transactions exceeded SGD100,000.
• No Share Buybacks or Mandates: The company did not perform share buybacks and did not seek a general mandate for recurrent interested person transactions.

Outlook and Strategic Commentary

Management’s tone is cautiously optimistic. The Group’s strategic shift is expected to strengthen its earnings base, with a focus on regulated trust and capital markets activities in Singapore and Malaysia. Recent management changes and Board strengthening are intended to support this transformation. However, the Group remains vigilant about economic and regulatory challenges in its core markets.

Chairman’s Statement

“Following the completion of the Disposal, the Group has strengthened its balance sheet, providing it with greater flexibility to embark on a strategic shift and pivot towards wealth and fund management, trust advisory and capital markets… The Group intends to build upon its existing assets and capabilities in regulated markets in Singapore and Malaysia. These services include private/family/corporate trusts, providing a range of onshore and offshore trust services, custodian services, fund administration and escrow services. The Group sees promising growth opportunities for these services in Malaysia, Singapore and the ASEAN region amid growing awareness of the relevance of these services.”

Tone: Positive and forward-looking, with an emphasis on growth opportunities and financial flexibility following the divestment and capital injection.

Conclusion and Investment Recommendations

Overall Assessment: ZICO Holdings has returned to profitability mainly due to a one-off gain from its strategic divestment. Underlying core business profitability remains subdued, but the strengthened balance sheet and clear strategic pivot to trust, capital markets, and wealth management create a platform for future growth. The absence of dividends underlines a commitment to reinvestment rather than immediate shareholder returns.

Investment Recommendations

• If you are currently holding ZICO Holdings stock:
  Consider maintaining your position, but monitor execution of the new strategy and core earnings recovery. The Group’s balance sheet is stronger and its focus on high-growth sectors is promising, but sustained profitability from core operations (ex-divestments) remains to be proven. Be mindful of potential dilution risk from the convertible loan. If you are a long-term investor, the current transformation could offer upside if management delivers on its stated ambitions.
• If you are not holding ZICO Holdings stock:
  Watch for evidence of sustained core earnings improvement and execution in the trust and capital markets segments before initiating a position. The stock may offer value if new growth areas deliver, but the lack of dividends and reliance on one-off gains mean waiting for further proof of recurring profitability is prudent.

Disclaimer: This article is based solely on the information provided in ZICO Holdings Inc.’s FY2025 financial report. It does not constitute investment advice. Please consult a qualified financial adviser before making investment decisions. Past performance is not indicative of future results.

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