Spheria Emerging Companies Limited Announces Estimated Pre-Tax NTA of $2.248 Per Share Ahead of 31 July Dividend

NTA Calculation Process and Portfolio Valuation

Spheria Emerging Companies Limited detailed its method for estimating the net tangible asset per share. The $2.248 pre-tax NTA as at 22 July 2026 is derived from the daily valuation of the company's investment portfolio and cash holdings, adjusted for management fees, applicable performance fees, and estimated changes in operating costs and income taxes. This calculation is based on the most recent weekly or monthly NTA data, with adjustments for the intervening period.

The pre-tax NTA calculation includes tax on realised gains, losses, and other earnings but excludes provisions for tax on unrealised gains or losses. Deferred tax assets related to capitalised issue costs and income tax losses are also excluded. Additionally, the company's franking account balance is not factored into the reported NTA. This approach offers investors a pre-tax view of net assets, while emphasizing that the figure is unaudited and approximate, reflecting the dynamic nature of daily portfolio valuations.

Dividend Details and Ex-Dividend Date for Emerging Companies Fund

Spheria Emerging Companies Limited declared a dividend of 1.1 cents per share payable on 31 July 2026. The ex-dividend date is 24 July 2026, meaning shareholders must hold shares before this date to qualify for the dividend. This distribution provides shareholders with a capital return as the fund continues managing its emerging companies portfolio.

The dividend announcement aligns with the company's capital management and distribution policies. Shareholders should note the ex-dividend date to confirm eligibility for the upcoming dividend. The payment on 31 July 2026 ensures eligible investors receive dividends in late July, enhancing liquidity for security holders.

Adjustments for Management Fees and Operating Costs in Pre-Tax NTA

The estimated NTA per share of $2.248 incorporates deductions for management and performance fees from the gross asset value to reflect the net value available to shareholders. These fees cover the costs of managing the emerging companies investment portfolio. This adjustment ensures the reported NTA accurately represents the economic value attributable to shareholders after fees.

In addition to fees, the NTA estimate accounts for estimated movements in operating expenses and income taxes. This comprehensive adjustment means the $2.248 per share figure reflects both the value of the underlying investments and the expected impact of operational costs and tax obligations, providing shareholders with a current and realistic assessment of per-share value.

Focus on Emerging Companies and Portfolio Strategy

Spheria Emerging Companies Limited focuses on investing in emerging Australian companies. Its portfolio strategy targets smaller, developing enterprises with growth potential. As an emerging companies fund, SEC invests in firms earlier in their lifecycle compared to large-cap stocks, offering distinct risk and return profiles for investors seeking exposure to this market segment.

The fund holds a diversified portfolio of emerging company securities, giving investors access to a basket of smaller listed companies managed professionally. This structure offers diversification within the emerging companies sector alongside daily NTA reporting.

Unaudited and Approximate Nature of the NTA Estimate

The company clarified that the $2.248 per share NTA figure is unaudited and approximate. This means the estimate is based on daily portfolio valuations rather than a final audited figure. The unaudited status reflects the need to provide frequent NTA updates using estimated values between formal audits.

The estimate is calculated by adjusting the latest weekly or monthly NTA for changes in fees, operating costs, and taxes, which themselves are estimates. Actual audited figures may differ. Investors should view the $2.248 figure as a reliable but non-definitive estimate of the fund’s per-share value on the reporting date, with final audited numbers to follow.

Tax Treatment and Exclusion of Franking Credits in NTA

The NTA calculation includes tax on realised gains, losses, and earnings but excludes any tax provisions on unrealised gains or losses, an important distinction for investors assessing underlying value.

The franking account balance, which represents potential future franking credit benefits to shareholders, is excluded from the NTA calculation. This conservative approach means the reported $2.248 per share may understate the economic value available when considering franking credits.

Exclusion of Deferred Tax Assets and Capitalised Issue Costs

The NTA calculation excludes deferred tax assets related to capitalised issue costs and income tax losses. Deferred tax assets arise from carry-forward losses or other items that may reduce future tax liabilities. By excluding these, the company adopts a conservative stance, including only realised or near-certain economic values in its per-share estimate.

Capitalised issue costs, often incurred when issuing new securities, are amortised over time and create deferred tax assets. Their exclusion from the NTA figure ensures the estimate does not incorporate potential tax benefits from these accounting treatments, providing a prudent view of net tangible assets.

Investor Insights and Importance of NTA Monitoring

The $2.248 per share NTA serves as a key benchmark for investors to evaluate whether SEC shares trade at a premium or discount to net asset value. Shares trading below NTA may present value opportunities, while a premium could indicate market optimism or scarcity.

Regular estimated NTA disclosures enable investors to track the fund’s per-share value changes over time. Monitoring NTA alongside share price helps assess fund performance, fee impacts, and shifts in market sentiment toward emerging companies. Publishing this estimate ahead of the dividend also aids investors in understanding share value before and after the capital return, supporting informed investment decisions.

Regulatory Compliance and Disclosure Standards for ASX-Listed Funds

This update from Spheria Emerging Companies Limited complies with Australian Securities Exchange requirements for listed investment companies to provide regular NTA disclosures. The 22 July 2026 estimate, accompanied by detailed methodology and exclusion notes, aligns with market disclosure standards and investor protection principles.

Authorized by Company Secretary Terence Kwong, the announcement offers an official NTA estimate investors can rely on. The transparent explanation of calculation methods, unaudited status, and specific exclusions exemplifies best practice in fund reporting, allowing investors to clearly understand the components of the reported NTA and compare it with other funds or direct equity investments.