Good morning and thank you for joining us today for the investor presentation for the FY 2025 full-year results for EQT Holdings Ltd. My name is Mick O'Brien, I'm the Managing Director of Equity Trustees , and I'm joined today by our CFO, Johanna Platt. We've got 45 minutes scheduled for this morning, and our agenda is that I'm going to provide a summary of the business's performance. I'll then hand over to Jo, and she'll take you through the financials in detail. I'll then close with an update on our strategy and the outlook, and then we'll open to questions at the end through the chat feature in this meeting. The key points for FY 2025 have been strong financial performance, experiencing record growth in funds under management, administration, and supervision, and strong top-line revenue growth.
We've had a turnaround in expenses as we successfully closed out a three-year strategic projects agenda as we flagged at the half-year. We've successfully delivered on the project agenda by fully completing the integration of AET and delivering the new technology platforms, and finally exiting the discontinued corporate trustee services business segment in the UK and Ireland. Lastly, I'm pleased to say we realized more than the planned synergies with our integration of the AET acquisition. Now, this page shows the key highlights of the year. I'm pleased to say the results reflect an improvement in both the statutory and the underlying profit measures. The key financial metrics for FY 2025 are that we had a very strong uplift in net profit after tax due to the completion of the three-year strategic project spend and the continued growth of the business. Net profit after tax increased by 60% to $33.2 million.
Funds under management, administration, and supervision, or FUMAS as we call it, grew to $254 billion, up 28% on the prior year, driven by the growth in CSTS through a combination of new appointments and growth in size of the existing portfolio of schemes and superannuation funds. Revenue grew by 7% to $182.5 million. The underlying net profit before tax was $53.7 million, an increase of 4% on the prior year, primarily driven by CSTS as a profit growth. Earnings per share grew by 60% to reach $124.26 per share, and the board has declared a second half dividend of $0.56, bringing the total dividend for the year to $1.11, an increase of 7% on the prior year. Finally, the total shareholder return to 30th of June was 9.7%.
FY 2025 represents the end of a three-year journey for us, a position with Equity Trustees as Australia's leading trustee company. Let me go through our major objectives and the delivered outcomes. Trustee and Wealth Services , following the acquisition of AET, has positioned itself as the leader in almost every state in Australia and each sector of trusteeship, strongly granting its health and personal injury role throughout the year. Our second objective was to drive growth in Corporate Trustee Services. This business has great momentum. There's been 126 new schemes over the last three years, of which there were more than 50 new appointments in FY 2025. The portfolio of listed vehicles has continued to expand with a portfolio of 27 active ETFs and listed investment trusts now in place, and more coming on as we speak.
We proudly took on the responsible entity roles for the largest IPO in Australia last calendar year and also the largest IPO in Australia in this calendar year so far. We completed the protracted process of exiting the UK business, and it's now in the final stages of liquidation with no more expense to come. Finally, our investment in the modernization of our core technology platforms has been successfully delivered. With a new trustee platform for Trustee and Wealth Services , called NavOne, we have Workday in place for human capital management, payroll, and financial reporting. We've migrated our technology infrastructure to the cloud whilst upgrading our cybersecurity systems. Whilst technology investment will remain a key for the business going forward, the breadth of the agenda will be more focused, and it will be focused on CSTS in FY 2026. This slide shows revenue and margins over each of the last six halves.
You can see revenue growth in the last half has been 4%. Compound revenue growth over the last three years has been 15% per annum. Importantly, you can see the margin improvement. We now had a reversion of our statutory result to our underlying result as we forecast. The underlying EBITDA margin has increased from 26.6% to 34.4% in the half, and the statutory EBITDA margin from 31.3% to 35.2%. Going forward, you'll only see statutory results without any underlying measures. We continue to track against our strategic T4 targets, client satisfaction, employee engagement, shareholder value, and our impact on the community. We've seen a slight decline in client satisfaction, although we still maintain healthier results with positive net promoter and net worker scores.
Declines have been attributed to the significant client transitions we did to the new NavOne platform throughout the year, and we expect those results to improve in FY 2026 with the sale of the platform. T2 employee engagement's held steady at 72%. Our shareholder value continues to grow, the statutory EPS up 60% as I mentioned before. Our community impact is high again in FY 2025 with $170 million of charitable grants made throughout the course of the year. It's down on FY 2024 off the back of lower dividend income in the Australian equity market coming into our relevant trusts. Now, the impact on the business of regulatory developments continues to be significant. The team managed an extraordinary volume of regulatory change and other regulatory woes throughout the course of the year.
The most significant developments were the introduction of the Financial Accountability Regime in March and the introduction of a significantly strengthened supervision and indenture standard CPS 230, starting at 30th of June relating to operational risk management. There are a raft of other changes that were implemented during the year and more in trend currently. I note there have been two well-documented issues that I'll comment on. The first relates to a native title trust for the Luna community in Perth, following the WA Ombudsman's failing of a report in the Western Australian Parliament last week regarding the purchase of a property intended to address homelessness in the community. We released an ASIC statement stating that we disagree with the finding of the WA Ombudsman, and we consider we have fulfilled our responsibilities as trustees and will respond to that report in due course.
We remain deeply committed to the purpose of that trust and the intent of that trust as we always have. We note that the Australian Charities and Not-for-Profits Commission, ACNC, did not reach the same conclusions as the WA Ombudsman. The second relates to the Shield and First Guardian Master Funds. I want to start by acknowledging the deeply difficult circumstances for individuals that have been affected by these events relating to the Shield and First Guardian Master Funds. We're engaging with the regulators and the broader industry and are committed to collective industry action that further protects investors' interests. One of our two superannuation trustees had exposure to two of those schemes. The exposure was within two of our superannuation funds.
The amount of funds invested in the two schemes under our superannuation trusteeship was less than a quarter of the reported $1.1 billion total investments in those two schemes. Importantly, Equity Trustees was not the responsible entity of either of those schemes and has no relationship with other parties involved: financial advisors, dealer groups, lead generators, responsible entities, fund managers, and property developers. Equity Trustees' governance program identified irregularities in some applications made by Venture Egg advisors in late 2023.
We promptly ceased accepting applications from those advisors and we reported Venture Egg to ASIC as we were required to do under an AFSL, when we believe another AFSL holder is potentially breaching its license conditions. Equity Trustees is extremely disappointed that members' benefits are likely to be negatively impacted and will be taking every action possible to keep members informed, engage with the regulators, and achieve the best possible member outcomes. We do expect a distribution from the Shield Master Fund within the next three months. Equity Trustees is cooperating fully with any inquiries or investigations being undertaken by ASIC and APRA. Equity Trustees Superannuation Limited, the trustee entity, has received and responded to multiple notices from ASIC requesting information. ASIC has not alleged any breach of law by Equity Trustees Superannuation Limited.
We continue to work collaboratively with all the stakeholders to deliver an industry-wide improvement to support a robust and resilient financial services system. Now, let me move to Trustee and Wealth Services' results. Trustee and Wealth Services has continued to grow revenue and FUMAS in FY 2025 at a steady pace. Revenue has doubled over the last three years, aided by the acquisition of AET, and importantly and pleasingly, we achieved almost $7 million in synergies from that acquisition. You can also see on this slide that we're now showing the split of revenue between asset-based and non-asset-based fees. The growth rate of revenue in FY 2025 was just over 3%, and that reflects the exit of the AET platform business and also some one-offs in FY 2025, which Jo will walk you through later. As CSTS, the corporate side continued to go from strength to strength in FY 2025.
We established 53 new schemes or took on other trustee appointments in FY 2025, including, as I said, the largest IPOs of last calendar year and so far this calendar year, showing we are the trusted partner in this market. The client growth in driving the year-on-year revenue growth, we've recommended a strong performance from FY25 continuing on across all the subsegments of fund services, custody, and debt and securitization services. The split of market-related and non-market-related revenue is really important for this business because it can distort the results. Typically, non-market-related fee arrangements are at a lower level, and often because they may involve directed type roles or the scale of funding is so significant. You can see the $33 billion in FUMAS growth that occurred, about half was attributable to market-related fee arrangements and half to non-market-related fee arrangements. The pipeline remains really strong for the start of FY 2026.
In the superannuation business, we're the leading independent superannuation trustee in the Australian market. The recent regulatory activity that is driving higher compliance demands and heightened risk is reinforcing our essential role in the financial ecosystem. During the year, we onboarded four new funds for $6.7 billion of FUMAS. We also had to merge three other funds, which resulted in reduced revenue. Nevertheless, overall revenue increased by 8% in superannuation during the year. We also manage operational risk financial reserves for some of the superannuation clients, and they flow through our balance sheet. This results in interest costs and offsetting interest revenue, which is effectively neutral to profit. The growth in those holdings in FY 25 contributed about $1 million of the revenue growth of the year. Now, this table shows investment performance in alpha terms across the key portfolios. Our asset management team currently manages $6.4 billion of funds.
You can see that recent performance in Australian equities, one of our global equity strategies, has been challenged, but generally we've got very positive alpha generation across each of these asset classes over most of these time periods. Now let me hand over to Jo, to take you through the results in some detail.
Thank you, Mick, and good morning to everyone, and I'm pleased to present to you today the financial results for EQT for FY 2025. Firstly, to review the key lines of the P&L. As previously mentioned, revenue for FY 2025 was $182.5 million, up 7% or $12 million. CSTS revenue growth contributed $8.5 million of this increase, driven by $3 million of new business and net inflows into existing schemes, $3 million due to the impact of positive investment markets, and $1 million of incremental AUFR-related revenues, and a further $1 million of regulatory-related project revenue. TWS revenue increased by $3 million, the net impact of the benefit of AET' s synergies of $2 million, new business and net flows of $2 million, and the impact of positive investment markets of $4 million.
This was, however, offset by the impact of the exit of the AET platform business at $1.5 million and non-recurring and lost business revenue of $2 million. Operating expenses increased by 8.3%, and whilst this was above the revenue growth rate, there were a number of transition issues that contributed to this outcome, which I will talk to further in an upcoming slide. Underlying net profit before tax was up 4.1% to $53.7 million, and margins softened slightly by 80 bps to 29.5%. Importantly, non-operating expenses declined by $6.6 million to $4.9 million in FY 2025 due to the wind-down of the AET integration and technology deployment activity. The after-tax profit impact of the discontinued CTS EU business was $0.7 million, as the UK business was deregistered by the regulator in December and is now in the final stages of liquidation.
Therefore, NPAT increased by just over 60% to reach $33.2 million, driven by the growth in underlying profit and the reduction in non-operating expenses and the progressive exit of the discontinued business. Given that FY 2025 was a story of two halves, it's useful to walk through the result on a half-over-half basis. In the second half of 2025, revenues increased by $3.7 million, driven by CTS and the impact of new business and growth of FUMAS in existing schemes. Operating expenses declined by $1.5 million in the second half due to the $2.7 million reduction in people costs resulting from the restructure that occurred in the first half, offset by increased administrative and marketing costs of around $1.2 million, approximately half of which are one-off in nature.
Net profit before tax margins improved by 4.5% to reach 31.6% in the second half, reflecting the reduced cost base of the unified operating model of TWS. Non-operating expenses further declined by $3.5 million to $0.7 million in the second half, as I've mentioned before, relating to the closeout of the strategic project activity. Therefore, NPAT increased by nearly $8 million, half over half, reflecting $5 million reduction in expenses and $3.7 million uplift in revenue. Turning to the reconciliation between underlying net profit before tax and NPAT, and as Mick mentioned, hopefully the last time we share this slide, the number and value of adjusting items reduced significantly in FY 2025. Non-operating expenses were $4.9 million, and the impact of the discontinued CTS EU business was a loss of $0.7 million on an after-tax basis.
To note, the effective tax rate in FY 2025 was 30.4%, a reduction from 32% in FY 2024 due to the decline in EU losses and non-deductible project costs. This page sets out the movements in operating expenses from FY 2024- 2025. As previously noted, they increased by 8.3% or $9.8 million. There was a net increase in people costs of $2.9 million. It's the net effect of a $4.2 million increase relating to additional resources to support growth in CSTS, a $1.9 million impact due to our annual remuneration review, and a $3.4 million reduction in TWS staff costs due to the integration of AET. Technology operating costs increased by $2 million due to the impact of moving to a cloud -based data service and the annualized impact of licenses for Workday, Salesforce, and NavOne, and additional cybersecurity services.
Finance costs increased by $1 million due to the increased value of the AUFR facility, which is recovered via revenue. Outsourcing costs increased by $2.9 million as the transition of custody and fund administration services to HUB24 was completed. Other expenses increased by $1 million relating to the launch of our new website and the costs for our first digital active philanthropy campaign. Given that people-related costs make up, sorry, we're doing a second half, sorry, focusing on the change in operating expenses half over half, this slide bridges from first half to second half. Operating expenses decreased by $1.5 million over this time, driven by a $2.7 million reduction in people costs relating to TWS.
There were minor changes in technology, finance, and legal costs, and mostly driven by elevated regulatory activity, and other expenses increased by $1.4 million, as I mentioned before, relating to marketing and marketing and digital marketing campaign costs. Given that people costs make up 2/3 of our expenses, we wanted to share a high-level view of our employee count across FY 2025. This graph shows the count of employees at June 2024, December 2024, and now at June 2025 for TWS , CSTS , and corporate functions. As you can see, TWS employee count reduced by 53 over the first half of FY 2025, a decrease of 20% as a result of the change to a single operating environment supported by NavOne.
The number of employees in CSTS increased by 13 to support the growth in our portfolio, whilst the headcount in technology and risk reflected the reduction in technology activity and some open roles in risk, which have subsequently been filled. The vacancy rate at June 30, 2025 was 3.9%, a slight increase on our prior year measure of 2.6%. However, we considered this within normal range. Turning to segment performance, here's a short-form P&L and waterfall of net profit before tax for TWS . Whilst reported revenue grew by $3.1 million or 3.1%, this was the net result of a $3.5 million reduction in prior year non-recurring revenue relating to the Australian Executor Trustees platform exit and one-off estate management and trustee fees.
This was offset by $6.6 million of revenue growth relating to AET synergies, new business of $2.3 million, $4.6 million impact of investment market improvements, and an offset of lost business of $2.1 million. Operating expenses increased by 5.3% or $3.7 million. The main driver here was the impact of the HUB24 custody fees increases of $2.7 million and people costs reduced by 1.7%. The net effect of the restructure that occurred, offset by annual revenue reviews. Increased technology costs of $1.0 million were incurred in part due to NavOne licenses and the flow-on of the corporate expense increase relating to technology that I referred to earlier.
The impact of transitioning the business to a single operating model resulted in some carriage of duplicate costs in the first half, and this resulted in a decline in profit over prior year of $0.6 million and a slight compression of margins by 1.5%. Given the change in TWS business over FY 2025, it's important to explain the progression in profit and margins half over half, which I'll cover in this page. This waterfall bridges from second half net profit before tax in 2024 through to second half 2025 for TWS . Over this time, net profit before tax has increased by $1.4 million, driven by revenue on essentially a flat cost base. Profit margins increased to be 30.8% in the second half of 2025, 3.9% higher than the first half.
Turning to CSTS , strong revenue growth, as we've mentioned previously, of $8.5 million or 11.9%. $1.1 million of this growth related to the $15 million increase in the value of AUFR facilities, as we previously noted, and the balance was the result of $7 million of new business or additional FUMAS into existing schemes, plus the additional $3 million market impact and $1 million of super regulatory project revenue. This was offset by $3 million decline due to either closed or lost scheme appointments. Expenses increased by 12.4% or $6.2 million. This was driven by people costs, as we've previously noted, additional headcount and employees deployed into this business. The increase in AUFR financing costs, as we've previously noted, is offset by revenue and an allocation of the increased corporate technology costs to this business.
Margins softened slightly by 40 bps to 30%, and FUMAS growth was around 30% for both subproducts. As Mick noted, the board declared a $0.56 per share dividend for the second half, bringing the total to the year for $1.11, a 6.7% decrease. The payout ratio on NPAT was 89% at the top end of the board-approved target range, and as you can see, there is a clear progression of increased dividends aligned with underlying and now statutory earnings growth over the last four years. Turning to share a summary of cash and cash flow. Total cash and cash equivalents increased by nearly $18 million in FY 2025. Operating cash flows of $40 million were broadly flat year over year. However, this included nearly $4 million of restructured payments relating to the integration of AET .
Net cash relating to investing activities was $3 million due to reduced capital expenditure in FY 2025. Cash outflows relating to corporate movements increased by $21 million to total $40 million. This included a $5 million increase in dividend payments and a $5 million repayment of a $10 million facility drawn down in FY 2024, which was put in place to support the integration of AET . Finally, closing on balance sheet. Our balance sheet remains investment-grade with total equity increasing nearly $5 million to $404 million, a year-end reducing to 10.4%. In explaining the balance sheet, it is important to note the accounting of the AUFR facilities, which are represented as an equal and offsetting asset, cash and liability loan. These increased by $15 million in FY 2025, and we project this will increase by a further $50 million in FY 2026.
Pleasingly, trade receivables and accrued income reduced by nearly $4 million due to improvements in invoice processes and collections activity. As I mentioned previously, corporate borrowing was reduced by $5 million due to a tight repayment of a facility, and we will be conducting a capital review of our allocation in the first half of 2026. Thank you, and I'll now hand back to Mick to close our presentation with an update on our strategy and FY 2026 outlook.
Fabulous, thank you, Jo. As we're continuing our journey to be Australia's leading trustee business, it's timely to reflect upon the strengths of the business. Firstly, our model, the independent trustee model, is increasingly favored by the market, and our market leadership has us well positioned to capitalize upon that trend. Secondly, the growth of the investment markets is set to continue. It's underpinned by the growth in the superannuation sector and also the growth of intergenerational wealth transfer, and we're well positioned to capture that in all of our business segments. Thirdly, the enduring income profile of our business is attractive. Trustee appointments are generally very long-term in nature, and revenue is positively correlated to market movements. EQT continues to have a strong balance sheet, as Jo mentioned, with low gearing. We have an experienced leadership team with a proven track record of M&A and integration success.
After a period of being internally focused while the introduction of AET's continued, we're now actively engaging in inorganic opportunities. Finally, our assets are highly engaged with capable people, our culture, and now we have a refreshed technology stack, meaning we're well positioned to enhance our operation processes and deliver greater service to our clients. Our strategic priorities in FY 2026 are to continue to leverage our market lead positions in each business to capture ongoing growth, particularly in CTS , design and deploy digital solutions to enhance the client experience and safety and to automate activities, and leverage our expertise to meet high regulatory demands and actively engage in conversations to shape future regulation. Let me finish with the outlook for FY 2026. Firstly, we need to note that the economy continues to face geopolitical uncertainty, which we're exposed to most directly through movements in investment markets.
Based upon our business plans and pipeline of new business, particularly in CTS , where we provide the responsible entity services for fund managers, we expect a really positive outlook for FY 2026. We expect more moderate levels of growth in Trustee and Wealth Services, and we expect the new technology solutions to boost efficiency and service levels for those clients. I'm pleased to confirm that going forward, our statutory profit performance will be the focus, and the statutory result is now reverted to the underlying result. Our operating expenses for technology are forecast to now run at a more normal level of $2 million in FY 2026, with the majority of projects being focused upon CTS and the rollout of enhanced workflow and data automation and monitoring tools in that business.
We also want to acknowledge that this landscape and expect the standards of the regulators to continue to increase, and this will continue. We will continue to invest as appropriate to ensure we meet those standards and expectations, and we're well positioned to do this, and we think we can manage this at this stage while maintaining our margins. That brings us to the end of the presentation, and now happy to take questions. They are in the chat function. We've had some that have been provided to us, so I'm going to start with those first. Firstly, where do you think the blame lies in the Shield Master Trust failure? Does EQT need to alter any of its processes in response? It's not for us to direct blame.
We're confident the matter is being thoroughly investigated by the regulators, and they are making good inroads, and we are engaging with them actively, and that is our focus. The next question that came in was, and I'll read it verbatim, "We've lost money on the UK, Ireland, on Goodle for years. Then we had the merger. Can management just focus on executing, please?" Look, we're pleased that we've successfully completed the three-year restructure program, and we've exited the loss-making European business. Really pleased with realizing the significant synergy benefits following the AET acquisition. The uplift in net profit after FY 2025 and increased dividend demonstrate the improvement in performance across because of these changes. Our future strategy is to continue the growth momentum in the business and execute upon the technology initiatives that enable this growth.
I have another question that came in earlier, which was, "What was EQT's role in the Shield First Guardian matters? How is the company associated or exposed to the Shield Master Fund?" I think I've covered that issue earlier in some detail, and at this stage, I'll add to that detail. Other than we are assisting the regulators where we can and ensuring members are as informed and supported as they can at this digital time. The next question is, "Mick, Jo, great results. Can you provide some further detail on the Shield, First Guardian, and non-charitable trust situations, recognizing ASIC's investigations ongoing? Does EQT believe that they've done anything out of line, CIS Act, and other requirements? Look, there are two key acts, the CIS Act and also the Corporations Act, and we believe we've abided by all the requirements of those two acts. Price increases on superannuation.
Is that something you'll look at this year, given the increasing regulatory burden faced in prior years that you've had to absorb and manage? Look, we are continually looking at the pricing of our services, particularly in superannuation and in Corporate Trustee Services, and we've made some changes and will continue to progressively make some changes to ensure that our margins are maintained in those businesses or improved if that can be possible.
Joe, this one's for you.
Yeah. Regarding tax in FY 2026 and beyond, is the lower tax rate seen in the second half consistent with what we should be expecting going forward with EU now gone, or was it a one-off impact? To answer that, we expect around the 30% to be our go-forward position. As we noted, there were impacts in prior years from the overseas entities and also just the quantum of restructure costs. You've also asked about the capital review. Our current regulatory capital requirement, we've talked about this before, is around $70 million in capital review. We're obviously just taking the time after we enter a new three to five-year strategic plan horizon around the best use of capital and our leverage position. We'll provide a further update at the half year.
Take that one .
Yeah, expectations for headcount in FY 2026. Good question. We obviously are seeing continued growth in CSTS, and we expect that we will be allocating resources to support that business to manage that growth effectively and also to manage the regulatory and change agenda. We expect to see headcount increases in that business in particular.
The next question I'll take. Corporate and Superannuation Trustee Services achieved solid new responsible entity and custody appointments. Was there a higher than normal level of opportunities in FY 2025, or could FY 2026 see a similar level of activity? Good question. Of course, the other questions were good too. Look, the new business activity has continued in the early months of FY 2026. I think Equity Trustees has always been the leader in provision of responsible entity services in the market. I think that position has just been strengthened in more recent times, particularly with the roles we're taking on in listing schemes. That is a significant trend that is going on for fund managers to access a broader market.
I can't say that the activity will be exactly the same as FY 2025, but there hasn't been really any let up in the first couple of months, and we've got a solid pipeline that we're working on developing new schemes at the moment. That brings us to the end of the questions. We've got one more that's just come in. I think I might hand the first one to you, Jo, if you're good with it.
Yes. We see, as we've mentioned before in our commentary around CSTS and TWS , the momentum. We've given some commentary there around where we see growth to continue to be above average in CSTS and TWS moderating as it's now fully onboarded and embedded the AET revenue line into its result.
Thank you. Next question is, has the company undertaken a review of the process undertaken prior to the purchase of the El Caballo property? If so, what did it find? Was there a process that followed with regards to due diligence? I can say our processes were followed, and we were effectively acting at the request of SWALS, and we've looked at those processes multiple times over the course of the last four or five years and are comfortable with the process that was undertaken. Next question is, how much of a risk does the compensation now being sought by the Southwest Aboriginal Land and Sea Council present for the company moving forward? I understand the Southwest Aboriginal Land and Sea Council issued a media release last week. I can say they have not made that demand to Equity Trustees , to be clear.
I think we've got to the end of the roll of questions. If there's no further questions, I just want to thank everyone for getting on the call this morning. We appreciate that. We're delighted with this set of results, and we're looking forward over the next week and a half or so coming out to see shareholders directly and walking through them in more detail. Thank you very much for your attendance, and thank you, Jo, for putting this together. Thank you.