11 Mar 2026
Click here for a PDF of this newsletter At a headline level, the Australian stock market delivered a robust performance in February 2026, with the S&P/ASX All Ord Accumulation Index rising 3.3% to a record high. However, this gain masked the concentration of the index, with the gold price climbing through A$5,000oz for the first time, prompting large gains in miners. Additionally, the strength in energy and banks stocks disguised many serious falls in industrial stocks which saw the S&P/ASX All Small Industrials Index dive 4.5%. Disappointingly, and despite some genuinely outstanding company results that we will detail below, the Cyan C3G Fund gave up 4.7%. However Fund remains up 13.6% over the past year, well in excess of the 3.8% gain in the S&P/ASX All Small Industrials Index. The chart below shows the compositions of returns from the ASX200 over February, with resources and banking gains outweighing some large losses with 40 of the 44 falls in excess of 10% comprising of industrial stocks.
The market’s heavyweights were the “engine room” for the month’s rally:
Some of the major shock movers in the month (which the Cyan C3G Fund does not own) included:
The domestic economic landscape was marked by the RBA moving to a more hawkish stance. In a widely anticipated move, the official cash rate was raised by 25 basis points to 3.85% with Governor Michele Bullock signalled that “patience on inflation has run out,” as underlying inflation remained stubbornly high at 3.4%.
Click here for a PDF of this newsletter Month in Review As mentioned above, and in light of the pullback in Industrials, we did not think the market appropriately rewarded some outstanding results delivered in the month. Alcidion (ALC -9%) saw their numbers surge: revenue +44% to $25.5m, underlying EBITDA +675% to $4.2m and a closing cash balance of $14.2m. With their large $35m+ UH Sussex contract expected to be finalised in the coming months, high visibility on contracted revenue and a strong pipeline of prospective new work, the company is at a clear inflection point in its journey to be a major international hospital software provider. We were astounded the company share price did not push higher given the underlying momentum and expect significant upside in the coming months.
Credit Clear (CCR -16%) maintained its momentum in the digital debt collection space, reporting revenue growth of 8% to $25.0m and a 24% jump in underlying EBITDA to $3.6m. The company’s performance was fueled by a 29% increase in direct digital payments, which now account for a larger share of the wallet from its tier-1 clients. Following the strategic acquisitions of DTS and ARC Europe in January, the company upgraded its FY26 revenue guidance to $57-$59m.
The other drag on performance was our small holding in AI enabled live sub-titling company AI-Media (AIM -43%). It was a jumble of outcomes: Annual Recurring Revenue (ARR) was up 80% to $30m, but revenue down 6.4% to $29.8m as the company wound back its human dependent sub-titling services. Most concerning for the market was the Board withdrawing its, arguably optimistic, FY29 aspirational target of $150m in revenue and $60m in EBITDA. As this was a small holding, and with growing medium-term uncertainty, the Fund exited the holding.
Smart traffic camera operator Acusensus (ACE +6.8%) reported record top-line growth, with revenue up 40% to $40.3m, primarily due to new international enforcement contracts in New Zealand and the US. EBITDA (excluding one-offs) rose 9% to $3.9m, and a $30m capital raise in December has left the company with a healthy cash balance of $41m to pursue its global growth strategy. Along with the impressive result, ACE announced an $11.2m extension to its WA multi-function enforcement program making the modest price rise in the month somewhat disappointing.
Bioxyne (BXN +54%), a Brisbane-based medical cannabis and consumer health products manufacturing company, was the Fund’s biggest winner. The company’s H1 revenue more than doubled to $31.3m due to increase in demand for its cannabis products in European and domestic markets. This saw the company upgrade its FY26 adjusted EBITDA guidance to $16.5–$19.0m leaving material price upside given the current market cap of $120m.
Media There were a number of media pieces done during the month as listed on our website and Linkedin. Outlook While industrials were acutely weak in February, we believe broader market momentum is likely to shift back toward small‑cap industrials as large caps face further valuation scrutiny. Many quality small-caps are trading at a material discounts despite delivering superior earnings growth and robust cash flows during the 1H26 reporting season (as shown in many of our Fund holdings this month) and are largely insulated from Middle East tensions at the operating level. Volatility is likely to persist as developments in the Middle East unfold, but the Fund’s diversified portfolio is expected to smooth any major swings. Over the past 6–12 months, we’ve seen a noticeable increase in investor interest across our universe and ongoing strong results should support this trend. 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 |
