ECP Emerging Growth Limited (ASX:ECP) kept its fully franked final Dividend at 3.15 cents per share for FY26, and its Dividend Reinvestment Plan (DRP) applied to that payment. The listed investment company declared the dividend despite reporting a loss for the year and a lower net Tangible Asset (NTA) backing per share.

Latest developments

ECP lodged its audited Appendix 4E and Annual Report for FY26. The investment portfolio returned negative 20.4% before tax, expenses and fees in FY26, compared with a 5.5% rise in the ASX Small Ordinaries Index. The company reported a loss after tax of $8.45 million, compared with a loss of $0.72 million in FY25.

The company said the underperformance was largely driven by macro events and market themes, particularly investor fears that artificial intelligence could disrupt software-as-a-service businesses. NTA per share was 103.4 cents at the end of FY26, a substantial decline from a year earlier.

Despite the loss, the board declared a fully franked final dividend of 3.15 cents per share, matching the prior year's final. Its latest monthly update put NTA at 102.0 cents per share at the end of August, after providing for that dividend.

Key numbers

ECP paid a fully franked Interim Dividend of 2.4 cents per share and has declared the fully franked final dividend of 3.15 cents per share, bringing total FY26 dividends to 5.55 cents per share.

The value of franking credits depends on each investor's tax position. The final dividend has been paid, following the usual ex-dividend and Record Date process.

About the company

ECP Emerging Growth, formerly Barrack St Investments, is a listed investment company that invests in small and mid-cap companies quoted on the ASX. It is managed by ECP Asset Management, and the company also has listed ECPGA convertible notes on issue, on which it pays interest.

It is a small company, with about 18.5 million shares on issue at the end of FY26. In its annual report, ECP compares its portfolio performance with the ASX Small Ordinaries Index, which provides a benchmark for assessing the manager's results over time.

How the DRP works

The DRP applied to the FY26 final dividend. The DRP price was set in accordance with the plan's pricing methodology and was confirmed by ECP in an updated dividend notice, and DRP shares were newly issued rather than bought on market.

The plan also operated for the interim dividend. Shareholders who do not elect to participate receive their dividend in cash. The DRP rules and each dividend notice set out the applicable terms.

Why it matters for income investors

ECP's dividends are fully franked, which means they carry franking credits that may be of value depending on each shareholder's tax circumstances. The FY26 dividends of 5.55 cents per share compare with an NTA of 102.0 cents per share at the end of August.

The DRP allows participating holders to receive additional shares instead of cash without brokerage. Because the DRP issues new shares, participating holders receive shares that are themselves eligible for any future dividends, while the value of those shares will move with the market.

What comes next

ECP has released its notice of annual general meeting, and its monthly NTA updates will show movements in portfolio values. The company's investment manager said the majority of investee businesses continued to perform in line with its expectations, and that it still believes strongly in their outlook.

Based on its recent history, ECP has paid an interim dividend in the first half of the calendar year and a final dividend in the second half. Any future dividend amount, franking level or DRP terms will be subject to board decisions and disclosed in a dividend notice.

Risks and context

Past dividends are not a forecast. ECP made a loss in both FY25 and FY26, so dividends depend on factors such as reserves and franking capacity rather than current-year profit, and they may not be maintained. A concentrated small and mid-cap portfolio exposed to technology themes can be volatile, and the company carries notes on which it must pay interest.

Because the DRP issues new shares, it adds to the share count. Reinvested dividends are still assessable income, and each DRP parcel sets a new cost base for Capital Gains Tax purposes.

Conclusion

ECP Emerging Growth (ASX:ECP) maintained its 3.15 cent fully franked final dividend for FY26, with its DRP issuing new shares for the payment. The result included a negative portfolio return, an after-tax loss and a lower NTA per share, and future dividends remain subject to board decisions.

Key Insights

ECP Emerging Growth (ASX:ECP) held its fully franked final dividend steady at 3.15 cents per share for FY26, taking total FY26 dividends to 5.55 cents, even though the portfolio returned negative 20.4% before tax, expenses and fees and the company reported an after-tax loss of $8.45 million.

The DRP operated for both FY26 dividends and issued new shares, with the final DRP price set under the plan's methodology. NTA per share was 103.4 cents at the end of FY26 and 102.0 cents at the end of August after providing for the final dividend, and any future dividends remain at the board's discretion.