08 Jul 2025
The Australian stock market ended the financial year on a broadly positive note, with the S&P/ASX All Ordinaries Index gaining 0.8% and the S&P/ASX All Ordinaries Accumulation Index rising 1.4% in June. The S&P/ASX Emerging Companies Accumulation Index underperformed slightly, declining by 0.4%.
The Cyan C3G Fund delivered a strong finish to FY2025, rising 10.4% in June and bringing the full-year return to a pleasing 28.0%. This result meaningfully outpaced both the S&P/ASX All Ordinaries (+13.2%) and S&P/ASX Emerging Companies (+8.8%) indices.
Markets appeared increasingly resilient to geopolitical volatility, including tensions in the Middle East and associated oil price fluctuations, which had limited influence on overall sentiment or market performance.
On the domestic front, economic data confirmed a continued slowdown in GDP growth, reinforcing expectations that the RBA will maintain its easing stance. We anticipate further interest rate reductions in the months ahead, providing a favourable environment for a recovery in small-cap growth companies.
Corporate activity remained robust through June. Notable M&A announcements included:
- A ~$30 billion takeover proposal for Santos (STO) by the XRG Consortium,
- Betr Entertainment’s (BBT) bid for PointsBet (PBH),
- Tourism Holdings (THL) receiving a proposal from BGH Capital and,
- A proposal from The Abercrombie Group to acquire Humm Group (HUM).
In the IPO space, while several smaller listings came to market including Gemlife Communities (GLF) and Tetratherix (THX), the most high-profile was Virgin Australia (VGN), which is currently trading marginally above its $2.90 issue price.
The RBA’s rate cut to 3.85%, coupled with Australia’s relatively resilient economic backdrop and easing inflationary pressures, added further market support.
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Month in Review
The Fund’s watershed month saw multiple positions enjoy gains in excess of 20%.
Following on from its strong run last month, delivery and route optimization software company Locate Technologies (LOC +110%) was again the Fund’s best performer as investors embraced their ‘Bitcoin Treasury’ strategy. The interest in the company has stemmed from support it received in a recent $1.4m placement and the additional funding of ~$1.2m it has secured through an ATM facility. As we mentioned last month, Locate is the first Australian company to activate a Bitcoin treasury function and replicates the successful NASDAQ listed company Micro Strategy (NASDAQ:MSTR) which has risen more than 1,000% in the past two years.
Given the substantial rise the company has experienced in the past two months, ongoing volatility is to be expected. However we are comforted by the growing revenue the business is achieving through its Locate2U software (group revenue is expected to exceed $6m), modest $50m market capitalisation and pricing that is still well within its historical range since listing.
Our long-term investment in camera manufacturer Birddog (BDT +45%) buoyed the Fund’s NAV after the company announced an increase in their equal access share buy-back from $0.05 to $0.07 per share. The Fund sold down the majority of its holding given the current market price of $0.068.
Hospital software provider Alcidion (ALC +16.0%) rose after again upgrading its FY25 EBITDA guidance – this time from >$3m to $4.5m. Earlier this year the market had been hoping for a breakeven result so the material improvement in the past few months has been promising to say the least. An outstanding FY25 result can be expected in August and we expect a bullish view into FY26 given the present positive momentum and significant pipeline of both new contracts and contract extensions.
AML3D (AL3 +24%) specialises in advanced metal 3D printing with their ARCEMY system, an industrial metal 3D printer for fabrication of complex parts using Wire-Arc Additive Manufacturing. The company has been making strong inroads into the US Navy and most recently has received a Letter of Intent for the potential supply of up to 1,600 components. We expect further upward momentum as the importance of this relationship is revealed.
Other positive performers included Beforepay (B4P +24%) after their lending data subsidiary, Carrington Labs, won two new US clients; and our small holding in consumer health manufacturer Bioxyne (BXN +44%) rose well after upgrading its FY25 revenue guidance to $28m.
After rising 35% in May we experienced a retracement in Readcloud (-25%) and endured some weakness in Beamtree (-12%).
Media
There were a number of media pieces done during the month as listed on our website and Linkedin.
Outlook
As we enter FY2026, the Australian equity market maintains solid momentum, though it continues to navigate persistent global geopolitical tensions and trade uncertainties. Domestically, we expect growth to be underpinned by lower interest rates and ongoing infrastructure investment.
Investor interest in the smaller end of the ASX is showing signs of recovery, although a significant valuation and performance gap remains relative to large caps. We believe this presents a compelling opportunity. Provided macro conditions remain stable, we see potential for continued recovery from the small-cap sector.
The Cyan C3G Fund remains well positioned, holding a diversified portfolio of emerging growth companies. Several of our key holdings are rich in catalysts, and we are confident in their ability to deliver strong results in the period ahead.
Please stay in touch with our intra-month commentary via Linkedin or feel free to contact us at any time.
Dean Fergie and Graeme Carson
Cyan Investment Management
AFSL No. 453209
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