Morphic Ethical Equities Fund Expands Share Buyback Program with Increased Shareholder-Approved Capacity

Shareholder Approval Increases Buyback Capacity and Extends Program Duration

At its Annual General Meeting on 20 November 2025, Morphic Ethical Equities Fund Limited secured shareholder approval to raise its buyback capacity to 20% of shares on issue, equating to a maximum repurchase of 6,475,300 shares. This enhancement, detailed in the Notice of Meeting, significantly boosts the fund’s capital management flexibility, allowing management to repurchase shares opportunistically to maximize shareholder value.

Simultaneously, shareholders endorsed a 12-month extension of the buyback period, setting a new end date of 19 November 2026. The program, which began on 20 November 2025, now provides a full year for executing repurchases within the approved limits. This extended timeframe enables a strategic and measured approach to share acquisitions, optimizing pricing and execution amid varying market conditions.

Recent Buyback Activity and Execution Details

On 16 July 2026, MEC acquired 1,489 ordinary fully paid shares at AUD 1.25 each, marking the latest daily buyback under the scheme. The total consideration was AUD 1,861.25, with the purchase price well within the ASX Listing Rule 7.33 maximum allowable price of AUD 1.3436 on the prior trading day. This disciplined pricing reflects adherence to regulatory limits and prudent capital deployment.

Since inception, share repurchase prices have ranged from AUD 0.92 (lowest on 10 November 2023) to AUD 1.355 (highest on 25 June 2026), illustrating responsiveness to market conditions. Taylor Collison Limited acts as the fund’s broker, executing purchases in line with agreed parameters.

Buyback Progress and Remaining Capacity

To date, MEC has cumulatively repurchased 1,663,864 shares prior to 16 July 2026, plus the 1,489 shares acquired on that day. This totals significant progress toward the authorized maximum of 6,475,300 shares. As of 16 July 2026, 4,809,947 shares remain available for repurchase, representing approximately 74% of the approved capacity.

This remaining capacity offers substantial flexibility for continued disciplined capital management during the remaining four months of the authorization period. The fund’s measured acquisition pace suggests a strategic approach focused on optimizing shareholder returns while preserving optionality for alternative capital uses.

On-Market Buyback Structure and Compliance

Morphic Ethical Equities Fund Limited conducts its buyback through on-market transactions, purchasing shares via ordinary market mechanisms rather than schemes of arrangement or equal access offers. The company complies with ASX Listing Rule 3.8A by providing daily notifications to the ASX following each day of repurchase activity. The latest notification, submitted on 17 July 2026, covers purchases from the previous trading day, ensuring transparent and timely disclosure.

Individual transaction approvals are not required since shareholder authorization was granted at the 20 November 2025 AGM. The on-market approach guarantees purchases occur at genuine market prices, promoting fairness among shareholders. Taylor Collison Limited serves as the appointed broker, executing transactions under ASX Listing Rules and the Corporations Act.

Company Overview and Ethical Investment Focus

Morphic Ethical Equities Fund Limited specializes in managing a portfolio selected based on ethical, environmental, social, and governance criteria. It excludes companies involved in fossil fuels, weapons manufacturing, and other sectors inconsistent with its sustainability values. This investment philosophy appeals to investors seeking capital growth aligned with ethical and sustainable principles.

The buyback program complements this mandate by serving as a capital management tool that can enhance earnings per share by reducing outstanding shares, assuming earnings remain stable or increase. Prior to the current buyback authorization, MEC had 31,954,684 ordinary fully paid shares on issue, representing a broad shareholder base.

ASX Listing and Market Trading Context

Morphic Ethical Equities Fund Limited is listed on the Australian Securities Exchange under the ticker MEC, with ordinary fully paid shares providing investors ownership rights and voting privileges. MEC shares trade daily on the ASX, and the buyback program operates through the same market channels as regular investor transactions.

Daily buyback disclosures enhance market transparency by informing all participants of share count changes and capital management activities. This transparency supports efficient price discovery and informed investment decisions. MEC’s commitment to regular buyback reporting demonstrates strong corporate governance and accountability.

Capital Management Strategy and Shareholder Value Enhancement

The buyback reflects MEC’s strategic focus on optimizing its capital structure and increasing shareholder value. By repurchasing shares at market prices, the fund can reduce its capital base and potentially improve metrics such as earnings per share and return on equity. The board’s decision to expand buyback capacity to 20% at the November 2025 AGM indicates confidence in share repurchases as an effective capital use in the current market.

Buybacks offer flexibility to return capital when alternative investments or dividends are limited. The 12-month extension through November 2026 provides sufficient time for a considered capital return strategy without undue pressure. The consistent adherence to regulatory pricing limits evidences careful stewardship of shareholder funds.

Regulatory Compliance and Disclosure Under ASX Listing Rules

MEC strictly complies with ASX Listing Rules governing on-market buybacks. The daily notification filed on 17 July 2026 meets Listing Rule 3.8A, requiring submissions at least 30 minutes before market open on the day following repurchases. This ensures timely disclosure and prevents information asymmetry.

Broker Taylor Collison Limited operates within price limits set by Listing Rule 7.33, which caps the maximum price payable at the highest closing price of the preceding five trading days. On 16 July 2026, the maximum permitted price was AUD 1.3436, with the actual purchase price of AUD 1.25 well within this threshold. These controls foster market confidence that buybacks are executed fairly and transparently to protect shareholder interests.

Remaining Buyback Period and Future Execution Outlook

The buyback authorization runs from 20 November 2025 to 19 November 2026, providing a 12-month window for repurchase activity. As of 16 July 2026, the program is about halfway through this period, with four months remaining before expiration. With 4,809,947 shares still available for repurchase and a moderate acquisition pace, MEC appears positioned to continue executing buybacks prudently in line with market conditions and shareholder value goals.

The remaining timeframe offers management flexibility to adjust buyback activity in response to share price fluctuations, market volatility, and company developments. The authorization does not obligate continued purchases beyond the end date, allowing the board to accelerate, slow, or suspend buybacks as appropriate to optimize capital management and shareholder returns.