EQT (ASX:EQT) reported a strong first-half FY2026 result, with management emphasizing continued momentum in its core trustee operations alongside heightened regulatory and litigation-related costs in its superannuation business. On the call, executives said net profit after tax rose to AUD 20.5 million, up 67%, supported by revenue growth and improved performance in key operating segments.
Business mix and operating context
Management reiterated the group’s structure across two primary revenue-generating segments: Trustee Wealth Services (TWS) and Corporate and Superannuation Trustee Services (CSTS). TWS remains the company’s largest business, contributing over 50% of group revenue and spanning health and personal injury trusts, community and native title trusts, charitable vehicles, and estate management, alongside related advisory services.
Management noted that superannuation represents around 19% of revenue but was described as the group’s lowest-margin business, contributing “just over 5% of earnings” in the half.
First-half FY2026 financial performance
For the half, the company reported:
- Revenue up 11.8% to AUD 100 million, marking the first time EQT reached AUD 100 million in revenue over a half-year period.
- NPAT of AUD 20.5 million, up 67%, which management said continued a recent trend of strong outcomes and demonstrated resilience in the business model.
- FUMAS (funds under management, administration, and supervision) up 28% to AUD 284 billion, driven mainly by CSTS through new appointments and growth in existing schemes and superannuation funds.
- An interim dividend of AUD 0.56, up AUD 0.01 from the prior corresponding period and equal to the FY2025 final dividend, with management citing a 73% payout ratio that sits within the board’s 70%–90% target range.
Executives said EBITDA margin remained resilient at just under 33%, noting this margin excludes the earnings-neutral flow-through impact of ORFR financing (operational risk financial requirement reserves used for superannuation funds). They also highlighted a temporary margin headwind of roughly 2 percentage points from litigation, defense, and regulator-driven activity; excluding those costs, management said margin would have been over 35%.
Operating expenses were reported at AUD 69.7 million, up 7.1%. Management attributed cost increases to ORFR-related expenses (AUD 1.8 million), Shield litigation support (AUD 1.0 million), and advisor/consultancy costs (AUD 1.1 million) tied to regulatory and governance uplift programs and license undertakings. The company said it expects these costs to continue into the second half.
Segment highlights: TWS strength, CTS momentum, and superannuation pressure
Trustee Wealth Services delivered revenue of AUD 55.9 million, up 9.8%. Management said margins improved largely due to new business in health and personal injury and improved processes in estate management. The company also flagged a one-off benefit in first-half FY2026 from accelerating time to probate in estate management processes, which management said benefited clients and also pulled forward revenue recognition milestones. TWS profit before tax was cited at AUD 19.1 million, up nearly 40%, with margins of 34.2%.
Corporate Trustee Services revenue rose to AUD 44.1 million, up 15.1%, supported by new responsible entity and custody appointments. EQT said it onboarded 77 new funds during the half, including five additional listed schemes. Management said the company now has a portfolio of 28 listed schemes with over AUD 20 billion in funds under supervision in that category. Executives cautioned that FUMAS growth can outpace revenue growth because fee structures vary between market-linked and non-market arrangements.
Looking forward, management described the CTS pipeline as strong, with around 30 new schemes and custody appointments in establishment. Executives also pointed to an ongoing trend of fund managers listing vehicles and a continued influx of global fund managers into Australia, which they linked to the growth of Australia’s superannuation assets.
Superannuation Trustee Services posted underlying revenue growth of 7.6%, benefiting from new funds onboarded late in FY2025. However, management described the period as challenging due to intensifying regulatory and litigation costs, prompting increased engagement and governance uplift activity.
Regulatory matters and strategic review of superannuation
Management provided detail on ASIC’s Federal Court proceedings against subsidiary Equity Trustees Superannuation Limited (ETSL) relating to the Shield Master Fund. The company said ASIC’s claims allege breaches of ETSL’s due diligence obligations when onboarding Shield onto two superannuation platforms, and that ASIC is seeking civil penalties, compensation for members, declarations of contraventions of the Corporations Act, and costs. ETSL filed its defense in December 2025, and management said it is available on the company’s website.
On the call, management reiterated previously disclosed potential ETSL exposure for Shield of AUD 73 million, based on the liquidator’s last estimate of recoveries. The company also said the group has customer insurances in place, with “substantive” coverage for compensation and limited coverage for civil penalties, adding that legal costs are covered and insurance has “kicked in” as of the current period.
Management also discussed ASIC’s ongoing investigations in relation to First Guardian Master Fund, stating that to date ASIC has not initiated action against ETSL. Member losses from First Guardian through the funds where ETSL is trustee were stated to total AUD 70 million (net and gross).
Separately, EQT said the board has initiated a strategic review of the Superannuation Trustee Services business, citing elevated legislative change and regulator activity that has created uncertainty over the cost base and increased risk. Management said the review is focused on optimizing capital allocation across the group and may take 6–12 months, with updates to be provided as the review progresses. Executives said ETSL will continue to meet trustee obligations and maintain service quality and governance standards during the process, and that all options are on the table, including potential consideration for fund appointments if trusteeships were to change.
In Q&A, management confirmed that EQT Holdings Limited does not guarantee any of the trustee entities it owns (while guaranteeing the services company that provides employment and other contracts). Management also said the interim dividend should be viewed as reflecting earnings and cash generation, rather than signaling confidence about outcomes in the Shield or First Guardian matters.
Outlook and focus areas for the second half
Looking ahead, management said it remains positive on structural demand for independent trustee and fiduciary services. Corporate Trustee Services top-line momentum is expected to continue, while growth in Trustee Wealth Services is expected to moderate from a first half that included one-offs but remain “very strong.” The company expects litigation and regulatory costs to stay elevated through the second half, with easing over FY2027 as matters progress. Management also highlighted ongoing priorities including investing in the CTS operating model and technology and driving productivity through digital workflows and data automation.
About EQT (ASX:EQT)
EQT Holdings Limited, together with its subsidiaries, provides philanthropic, trust executor, and investment services in Australia, the United Kingdom, and Ireland. It operates through three segments: Trustee and Wealth Services, Superannuation Trustee Services, and Corporate Trustee Services. The company offers estate planning and management; charitable, compensation, community, and personal trust services; and asset and wealth management, and advisory services. It also provides trustee, custody, and investment management services for superannuation funds; and legal and financial services.
