Highlights

• Infotrust signed a binding agreement to sell Nexgen for up to $50 million, including $44.1 million payable at completion.

• Continuing revenue grew 9% to $31.1 million in the December 2025 half, led by security services at $16.7 million.

• A $15.6 million impairment on the discontinued cloud unit pushed the statutory loss attributable to owners to $16.5 million.

• Operating cash flow was a $3.2 million inflow, while the $27.0 million bank facility needs renewal by 1 January 2027.

A binding agreement to sell its cloud and communications arm now defines Infotrust Ltd (ASX:ITS). The company, which operates a cyber security and managed IT business, signed the deal for Nexgen on 23 February 2026 and set out its half-year numbers three days later. Shares were trading at A$0.235 on 23 October 2026, up 4.44%.

A cyber security business takes the lead

Infotrust, formerly Spirit Technology Solutions, changed its name after shareholders approved the move at the October 2025 annual general meeting. Its ASX code moved from ST1 to ITS on 10 November 2025.

In the half year to 31 December 2025, continuing revenue rose 9% to $31.1 million. Security services contributed $16.7 million, up from $14.5 million, while managed infrastructure and cloud added $14.4 million. All revenue came from Australia. The company said it protects more than 1,000 organisations and employs over 200 people, including more than 120 cyber specialists, supported by an Australia-based security operations centre running around the clock.

Profitability was thinner. Underlying EBITDA from continuing operations fell 38% to $356,000, and the statutory loss after tax from continuing operations narrowed 11% to $3.7 million.

The Nexgen sale and what it cost on paper

The agreement covers 100% of Nexgen Investment Group Pty Ltd and its subsidiaries, which make up the cloud and communications segment. Total consideration reaches a maximum of $50 million, subject to customary adjustments. Of that, $44.1 million is payable on completion, and up to $5.9 million is contingent on Nexgen meeting on-target EBITDA in FY26 or FY27. The deal carries customary conditions, plus working capital and net debt adjustments.

Accounting for the sale was provisional at balance date. Infotrust wrote the carrying value of the discontinued operation down to the $50 million maximum, booking a $15.6 million impairment. Together with a $2.8 million profit from the discontinued business before impairment, that left a $12.8 million loss from discontinued operations and a statutory loss attributable to owners of $16.5 million, against $1.7 million a year earlier. Net tangible assets stood at negative 21.41 cents per share.

Cash, debt and the funding question

Operating activities delivered a net inflow of $3.2 million, compared with $0.5 million in the prior half. Cash and equivalents stood at $4.6 million, and total liabilities were $75.9 million. Bank loans of $27.0 million are secured over the group's assets, and the facility is due for renewal on 1 January 2027. No dividend was paid, recommended or declared.

The company acknowledged funding risk. It aims to reach positive operating cash flow, but said it may need additional equity if performance falls short, and it must meet bank covenants.

Where the sale proceeds are earmarked

Management said sale proceeds would lower net debt and fund acquisitions, along with investment in the security operations centre, digital forensics and incident response, and secure managed IT services. It said this would let the company progress its acquisition pipeline without necessarily requiring external capital.

Completion remains subject to the conditions in the agreement, and the contingent payment depends on Nexgen's earnings. The bank facility renewal on 1 January 2027 is the next dated funding milestone in the company's half-year report.