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): 38.3
• Beta (1Y): 0.06
• 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: 54 Neutral
• Price Target: AU$0.87 ▲(2.00% Upside)
• Action: Reiterated Date: 03/24/26
• Date: Action: Reiterated 03/24/26

The score is driven primarily by financials: a strong, low-risk (no-debt) balance sheet and improved FY2025 profitability are offset by a major FY2025 cash flow shortfall that weakens confidence in earnings quality. Technicals are neutral-to-soft with limited trend strength and mildly negative momentum. Valuation is a headwind due to the high P/E, only partly supported by a moderate dividend yield.

Positive Factors

Debt-Free Balance Sheet

A zero‑debt balance sheet materially improves long‑term financial flexibility and lowers solvency risk. This durability allows the company to fund opportunistic investments, sustain dividends when earnings fluctuate, and avoid interest burdens that can compress margins in downturns.

Revenue Rebound and Return to Profit

A significant revenue recovery and restoration of net income indicate underlying business or portfolio repositioning that is translating into earnings capacity. Over the medium term this supports reinvestment, dividend policy, and a stronger capacity to absorb shocks versus a prolonged revenue slump.

Stronger Net Assets and Cash Position

Material increases in net assets and cash provide durable optionality: funding new long‑term investments, smoothing dividends, and meeting obligations without leverage. A larger cash buffer improves strategic flexibility and capacity to capitalize on discounted opportunities.

Negative Factors

Weak Cash Conversion

Persistent disconnect between reported profits and cash generation undermines earnings quality and raises risk that profits are not sustainable. Over months this can force asset sales or restrict capital allocation, making dividends and growth dependent on non‑operating sources.

Volatile Margins and Returns

Wide year‑to‑year margin swings and inconsistent ROE reduce predictability of future earnings and complicate long‑term planning. This structural volatility means earnings and shareholder returns may remain uneven over the next several quarters absent a durable, repeatable revenue model.

Reliance on One‑Off Investment Gains

Large capital gains from a single asset sale materially boosted net assets and cash but are non‑recurring. Dependence on such one‑off disposals to bolster balance sheet or support dividends weakens the predictability of future financial performance and limits sustainable earnings growth.

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

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London City Equities Ltd Financial Statement Overview

Summary

Earnings improved in FY2025 with a strong revenue rebound and a return to positive net income, and the balance sheet is very conservative with zero debt. However, operating and free cash flow were deeply negative in FY2025 despite positive earnings, raising concerns about cash conversion and earnings quality.

Income Statement

Revenue rebounded strongly in FY2025 (up ~53% YoY) after a weak FY2023–FY2024 period, and profitability improved meaningfully with positive net income in FY2025 following a small loss in FY2024. Margins are generally high but have been volatile year-to-year (including an exceptionally strong FY2022 and much weaker FY2023–FY2024), which reduces confidence in earnings consistency despite the latest recovery.

Balance Sheet

The balance sheet is conservatively positioned with no debt across the periods provided, giving the company strong financial flexibility and low solvency risk. Equity and total assets are sizable and have generally trended upward, but returns on equity have been modest most years (and negative in FY2021 and FY2024), suggesting the capital base is not being consistently converted into strong shareholder returns.

Cash Flow

Cash generation is the main weak spot: operating and free cash flow were deeply negative in FY2025 despite positive net income, indicating a significant cash outflow that does not match reported profitability for the year. Cash flow performance has also been inconsistent over time (positive in FY2022 and FY2024, negative in FY2023, and near-breakeven in FY2021–FY2020), increasing the risk that earnings may not reliably translate into cash.

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

London City Equities Ltd Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:LCE, the sentiment is Negative. The current price of 0.85 is below the 20-day moving average (MA) of 0.85, above 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 Negative momentum. The RSI at 42.36 is Neutral, neither overbought nor oversold. The STOCH value of 100.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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$61.40M	2.97	35.99%	6.39%	22.67%	19.47%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
TIP	62 Neutral	AU$35.00M	7.12	1.47%	1.79%	-5.10%	―
SB2	61 Neutral	AU$54.44M	19.67	3.43%	6.89%	30.36%	-31.47%
LCE	54 Neutral	AU$26.98M	38.35	1.46%	2.94%	38.32%	―
CIW	53 Neutral	AU$27.20M	46.88	4.11%	2.03%	18.17%	―
KBC	53 Neutral	AU$9.72M	-1.31	91.73%	―	―	―

London City Equities Ltd Corporate Events

London City Equities Director Increases Indirect Shareholding via On‑Market Purchase

London City Equities has disclosed a change in director David G. Butel’s indirect interests, with an associated entity, Imperial Pacific Limited, acquiring 10,000 fully paid ordinary shares on market at 85 cents each. Following the transaction, Butel’s indirect holding through Imperial Pacific rose to 13,168,204 shares, while his superannuation fund position remained unchanged, signalling a modest increase in director-aligned ownership that may be viewed positively by shareholders focused on governance and insider confidence.

The most recent analyst rating on (AU:LCE) stock is a Hold with a A$0.87 price target. To see the full list of analyst forecasts on London City Equities Ltd stock, see the AU:LCE Stock Forecast page.

London City Equities lifts revenue and asset backing but profit falls 40%

London City Equities Limited reported a 38% rise in revenue from ordinary activities to $988,373 for the half year to 31 December 2025, but net profit after tax attributable to members fell 40% to $175,891. Despite the lower profit, the company increased fully franked dividends to 2.50 cents per share, paid in October 2025, up from 1.50 cents a year earlier, while net tangible assets per security improved from 75 cents to 88 cents, and the dividend reinvestment plan remains in operation with no discount applied.

The firm did not declare an interim dividend and reported no changes in control over other entities, no associates or joint ventures, and no audit qualifications for the period. These results suggest London City Equities is strengthening its balance sheet and asset backing while prioritising cash returns to shareholders, even as profitability softened relative to the prior corresponding half year.

The most recent analyst rating on (AU:LCE) stock is a Hold with a A$0.87 price target. To see the full list of analyst forecasts on London City Equities Ltd stock, see the AU:LCE Stock Forecast page.

London City Equities Director Increases Indirect Shareholding via On-Market Trade

London City Equities has disclosed a minor change in director David G. Butel’s indirect shareholding following an on-market purchase. Through entities including the DG Butel Superannuation Fund and Imperial Pacific Limited, Butel acquired 1,184 fully paid ordinary shares at 85 cents each on 30 January 2026, lifting his indirect interest via Imperial Pacific Limited to 13,158,204 shares while his superannuation fund holding remained unchanged at 120,934 shares. The trade was conducted outside a closed period and did not involve any related contracts, indicating routine portfolio adjustment rather than a material change to the company’s capital structure.

The most recent analyst rating on (AU:LCE) stock is a Hold with a A$0.87 price target. To see the full list of analyst forecasts on London City Equities Ltd stock, see the AU:LCE Stock Forecast page.

London City Equities Lifts Net Assets on Portfolio Gains and Fiducian Exit

London City Equities has guided to a strong half-year to 31 December 2025, with net assets rising to $27.9 million from $23.6 million a year earlier and net assets per share increasing to 88 cents from 75 cents, driven by an 18% uplift in investment portfolio values and the profitable exit of its remaining stake in Fiducian Group, which delivered a $5.6 million capital gain. The company’s balance sheet has strengthened markedly, with cash and equivalents more than doubling to $17.1 million as equity holdings were trimmed, while progress in its dispute with Excelsior Capital, which has agreed to an internal managed liquidation in exchange for the withdrawal of litigation, is expected to release further liquid funds and position London City Equities for new long-term investments once the Excelsior wind-up is completed.

The most recent analyst rating on (AU:LCE) stock is a Hold with a A$0.87 price target. To see the full list of analyst forecasts on London City Equities Ltd stock, see the AU:LCE Stock Forecast page.