London City Equities Ltd (LCE) AI Stock Analysis

• Market Cap: AU$26.98M
• Dividend Yield: 2.94%
• Average Volume (3M): 45.00
• Price to Earnings (P/E): 53.1
• Beta (1Y): 0.05
• Revenue Growth: 38.32%
• EPS Growth: N/A
• Country: AU
• Employees: 2
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): <0.01
• Shares Outstanding: 31,742,298
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 45
• PEG Ratio: >-0.01
• Price to Book (P/B): 1.02
• Price to Sales (P/S): 13.80
• P/FCF Ratio: -2.34
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: AU$0.87 ▲(2.47% Upside)

The score is primarily held back by weak FY2025 cash flow and a high P/E valuation. Offsetting factors include a very conservative, debt-free balance sheet and mixed technicals that show some longer-term support but softer near-term momentum.

Positive Factors

Strong Balance Sheet

A debt-free balance sheet enhances financial flexibility and resilience, enabling the company to withstand economic fluctuations and invest in growth opportunities.

Revenue Growth

Significant revenue growth indicates strong market demand and effective business strategies, supporting long-term competitive positioning and potential profitability.

Capital Gains

Capital gains from the investment portfolio enhance financial strength and provide additional resources for strategic initiatives and shareholder returns.

Negative Factors

Negative Cash Flow

Persistent negative cash flow can strain liquidity and limit the company's ability to fund operations and growth, posing a risk to financial stability.

Volatile Earnings

Earnings volatility undermines predictability and confidence in financial performance, potentially affecting investor trust and valuation stability.

Inconsistent Returns on Equity

Inconsistent ROE suggests challenges in efficiently utilizing equity capital to generate profits, which may impact long-term shareholder value creation.

London City Equities Ltd Business Overview & Revenue Model

Company Description

London City Equities Limited is a publicly owned investment manager. The firm invests in the public equity markets of Australia. London City Equities Limited was founded in 1986 and is based in Sydney, Australia.

How the Company Makes Money

London City Equities Ltd generates revenue primarily through capital gains and dividends from its investment portfolio. The company invests in a diversified range of equities and financial securities, aiming to benefit from market appreciation and income distribution from these investments. LCE's strategy involves selecting undervalued stocks, holding them for long-term growth, and occasionally trading to capitalize on short-term market movements. Additionally, the company may earn revenue from any advisory or management fees if it provides investment consultancy services, although specific details about such services are unavailable. Key factors contributing to its earnings include market conditions, the performance of its investment holdings, and effective portfolio management.

London City Equities Ltd Financial Statement Overview

Summary

London City Equities Ltd demonstrates a mixed financial outlook. The company has strong gross margins and a stable balance sheet with no debt, enhancing its financial stability. However, the negative net profit margin and declining revenue growth rate highlight concerns about profitability and sales trajectory. Cash flow management has improved, though the negative net income remains a challenge. Overall, while the company maintains a stable balance sheet, it faces profitability and growth challenges.

Income Statement

London City Equities Ltd shows volatility in its financial performance. The gross profit margin improved significantly in 2024 with 74.1% compared to 56.4% in 2023, indicating efficient cost management. However, the net profit margin turned negative in 2024 at -0.5%, down from a positive 13.5% in 2023, driven by a net loss. The revenue growth rate is negative at -1.1% in 2024, showing declining sales. While EBIT margin improved to 19.4% in 2024 from 13.5% in 2023, the absence of EBITDA data limits comprehensive margin analysis.

Balance Sheet

The balance sheet reflects strong financial health with no debt and a solid equity base. The equity ratio for 2024 is high at 80.5%, indicating a stable capital structure. Return on Equity (ROE) dropped significantly to -0.03% in 2024 from 0.97% in 2023 due to net losses, suggesting challenges in generating returns on equity. Overall, the company maintains a conservative financial position, enhancing its stability.

Cash Flow

The cash flow statement indicates improving cash flow management. The free cash flow showed significant growth, turning positive in 2024 with $508,262 compared to a negative in 2023. The operating cash flow to net income ratio is strong at -78.4 in 2024, indicating robust cash generation relative to income. Despite positive trends in cash flow growth, the negative net income poses a risk.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.81M	1.81M	1.25M	1.27M	2.41M	558.89K
Gross Profit	1.07M	1.28M	923.61K	722.93K	2.16M	534.89K
EBITDA	379.81K	0.00	-6.48K	169.63K	1.81M	166.55K
Net Income	499.91K	499.91K	-6.48K	169.63K	1.81M	-29.17K
Balance Sheet
Total Assets	27.11M	27.11M	26.61M	20.61M	22.97M	19.61M
Cash, Cash Equivalents and Short-Term Investments	11.37M	11.37M	19.76K	293.36K	1.55M	1.35M
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	2.49M	2.49M	5.18M	3.15M	3.85M	3.37M
Stockholders Equity	24.62M	24.62M	21.44M	17.46M	19.12M	16.24M
Cash Flow
Free Cash Flow	-10.72M	-10.72M	508.26K	-48.00K	1.92M	13.06K
Operating Cash Flow	-10.72M	-10.72M	508.26K	-48.00K	1.92M	13.06K
Investing Cash Flow	11.82M	11.82M	-138.63K	-1.30M	-1.47M	-418.84K
Financing Cash Flow	-1.08M	-1.08M	-367.46K	-189.39K	-251.43K	1.76M

London City Equities Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.85
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:LCE, the sentiment is Positive. The current price of 0.85 is below the 20-day moving average (MA) of 0.86, below the 50-day MA of 0.85, and above the 200-day MA of 0.82, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 42.36 is Neutral, neither overbought nor oversold. The STOCH value of 0.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:LCE.

London City Equities Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MAM	72 Outperform	AU$78.39M	10.99	32.22%	6.39%	22.67%	19.47%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
TIP	65 Neutral	AU$42.91M	21.24	2.40%	1.79%	-5.10%	―
SB2	61 Neutral	AU$62.64M	20.78	3.57%	6.89%	30.36%	-31.47%
LCE	55 Neutral	AU$26.98M	53.13	2.17%	2.94%	38.32%	―
CIW	53 Neutral	AU$31.35M	55.88	2.42%	2.03%	18.17%	―
KBC	43 Neutral	AU$9.72M	―	―	―	―	―

London City Equities Ltd Corporate Events

London City Equities Withdraws Legal Action Against Excelsior Capital

London City Equities Limited has reached an agreement with Excelsior Capital Limited to withdraw its legal action in the Federal Court of Australia. This decision aligns with London City’s initial goal of achieving a favorable outcome for shareholders, as Excelsior will now proceed with a company-managed liquidation process. This process includes asset realization, liability payment, and a fully franked dividend payout, culminating in Excelsior’s delisting from the ASX by June 2026. The agreement allows London City to save on legal expenses and focus on its investment portfolio, although the exact financial impact on London City remains uncertain.

London City Equities Reports Capital Gains and AGM Voting Results

London City Equities Ltd reported at its 2025 Annual General Meeting that the company’s investment portfolio has increased its cash and liquid asset levels, resulting in capital gains of $5.6 million. The company is also engaged in ongoing litigation against Excelsior Capital Limited. Additionally, all resolutions, including the re-election of Mr. P.E.J. Murray as a director, were passed during the meeting.

London City Equities Announces Director’s Interest Change

London City Equities Limited announced a change in the director’s interest, specifically involving David G Butel. The change was due to a dividend reinvestment plan, resulting in an increase of 321,730 fully paid ordinary shares held indirectly through Imperial Pacific Limited. This adjustment reflects the company’s ongoing financial strategies and could impact its market positioning by potentially increasing shareholder value.

London City Equities to Quote New Securities on ASX

London City Equities Limited has announced a new application for the quotation of securities on the Australian Securities Exchange (ASX). The company will be issuing 438,007 ordinary fully paid securities under a dividend or distribution plan, with the issue date set for October 31, 2025. This move is likely to impact the company’s market presence by potentially increasing liquidity and shareholder value, as it aligns with their strategic financial initiatives.

London City Equities Sets 2025 DRP Issue Price at 80 Cents

London City Equities Limited has announced the issue price for its Dividend Reinvestment Plan (DRP) for 2025, set at 80.0 cents per new ordinary share. This price was determined based on the company’s DRP rules, considering current share trading levels and net assets, with no discount applied for this year. The new shares are expected to be issued within two weeks and will have equal standing with existing shares, reflecting the company’s stable financial strategy and commitment to shareholder value.