FOS Capital Ltd (ASX:FOS) last paid a fully franked final Dividend of 1 cent per share for FY25. The company did not declare a dividend for FY26, a year in which it reported a net loss, and it is currently raising fresh capital through a Placement and a share purchase plan.

Latest developments

FOS has been raising capital. It announced it had completed a placement of about 12.9 million shares at $0.12 each to raise $1.55 million from institutional and sophisticated investors. Directors intend to subscribe for about $310,000 more, subject to Shareholder approval at the upcoming Annual General Meeting (AGM).

A share purchase plan (SPP) at the same issue price is also available to eligible shareholders, targeting about $750,000 with capacity for oversubscriptions and a cap of $30,000 per holder. The SPP is not underwritten. The company says the funds will support Working Capital for the Queensland Schools Lighting Upgrade Program, growth at its Aldridge Traffic Systems (ATS) business, a cost reduction program and general working capital.

Key numbers

FOS's most recent dividend was a 1 cent per share final dividend for FY25, which was 100% franked. The value of franking credits to any individual shareholder depends on that shareholder's own tax position.

For the 2026 financial year, FOS reported sales of about $22.4 million, down from about $25.5 million in FY25, and a net loss after tax, compared with a profit of about $0.9 million in FY25. No dividend was declared for FY26.

About the company

FOS Capital is an Australian industrial company whose core business, FOS Lighting, designs, engineers, manufactures and supplies commercial, retail and industrial lighting solutions. The company has said it aims to grow organically and through acquisitions in the industrial, electrical and technology sectors, and its operations now include Aldridge Traffic Systems.

The company listed on the ASX in 2021. Alexander Beard is chair, and Con Scrinis is chief executive and managing director. The board also includes Michael Koutsakis and Michael Monsonego, and all four directors intend to take part in the placement, subject to shareholder approval.

How the DRP works

Because FOS has no dividend currently declared, there is no DRP election open at present. When a company offers a DRP, shareholders can generally elect to receive shares instead of cash for some or all of their dividend, usually priced at a volume-weighted average price over a set number of trading days, sometimes less a discount set by the board. Plans typically allow full or partial participation, and the company may issue new shares or buy existing shares on market to satisfy elections.

The terms of any future FOS DRP, including the pricing period, any discount and the election timing, would be set out in the company's DRP rules and the relevant dividend notice.

Why it matters for income investors

FOS's dividends have been modest in size and paid once a year when declared, with a half-cent final for FY22 and 1 cent finals for FY24 and FY25.

With FY26 showing a loss and the company raising capital to fund working capital and growth projects, past dividends provide limited information about future payouts. Any future dividend would depend on the company's earnings, Cash Flow and board decisions.

What comes next

Upcoming milestones include the close of the SPP, the allotment of SPP shares and the AGM, where shareholders will vote on ratifying the placement, directors' participation and additional placement capacity under Listing Rule 7.1A.

The company has pointed to a strengthened order book, a record quote pipeline and cost reduction initiatives. Whether these translate into a return to profit, and any future dividend, will depend on execution. Any dividend would be decided by the board.

Risks and context

Dividend sustainability is the central consideration. The most recent dividend was paid from FY25 profits, while FY26 was loss-making. The placement and SPP will increase the number of shares on issue, diluting holders who do not take part.

FOS is a small company. It also relies on project work such as school lighting upgrades and on growing a newer traffic business. If a DRP operates in future, reinvested dividends generally remain assessable income, including franking credits, and DRP shares set a new cost base for Capital Gains Tax purposes.

Conclusion

FOS Capital (ASX:FOS) last paid a fully franked 1 cent dividend for FY25. With a FY26 loss, a capital raising under way and no dividend currently declared, the outlook for future dividends is likely to depend on whether the company can deliver a sustained Earnings recovery.

Key Insights

FOS Capital (ASX:FOS) has a limited dividend history of small, fully franked annual final dividends, the latest being 1 cent per share for FY25. No dividend was declared for FY26 after the company reported a net loss and lower sales.

The company is raising capital through a placement, proposed director participation and an SPP to fund school lighting work, ATS growth, cost reductions and working capital. Any future dividend or DRP offer would depend on a return to profitability and board decisions.