Dear Shareholder,

DMXCP’s NAV declined 6.7% (after all accrued fees and expenses) for March 2026. The NAV as at 31 March 2026 was $2.7682, compared to $2.9666 as at 28 February 2026.

March was a challenging month for markets, with the hostilities in the Middle East driving uncertainty and a very much risk-off sentiment and  market behaviour. The All-Ordinaries Accumulation Index decreased 8.0%, the Small Ordinaries fell 11.0%, while the Emerging Companies Index declined 11.4%.

March Performance

With little company news released during the month, the negative market sentiment from the geopolitical uncertainty drove a very poor month of performance for small caps. Reflecting this risk-off sentiment, over three quarters of our positions experienced share price falls during March. The largest detractors were two names that had performed strongly in February but gave back their previous month’s gains in March – Verbrec (ASX:VBC) fell 27% after rising 24% in February, while RMA Global (ASX:RMY) fell 42% after increasing 44% in February. Together, these two positions contributed approximately half of the portfolio losses for the month. Other significant detractors were Pure Profile (ASX:PPL) which fell 11% and Income Asset Management (ASX:IAM) which declined 31%.

The only meaningful positive contribution to the portfolio for the month came from Clover Corporation (ASX:CLV) which increased 28% on the back of a profit upgrade, as discussed below. Due to its unusual balance date (31 January) CLV was the only position to report results during March. In what was a lean month for stock gains, the only other position that recorded a double-digit positive return was Volt Group (ASX:VPR) which was up 10%.  

Clover Corporation

CLV uses its patented encapsulation technology to enable nutritional oils (such as fish & omega-3 oil) to be added  as a supplement to infant milk formula (IMF), foods and beverages. Historically, CLV’s revenues have been very much linked to sales of IMF and, as a result, have been somewhat inconsistent period to period. However, in recent times, CLV has been diversifying its sales through its newer, higher margin products for seniors’ nutrition and powdered drinks. Benefits of this diversification strategy became evident last year where  strong sales and margin growth saw two profit upgrades during 2025  – we established a position in mid-2025 on the back of these improving operating results. 

It was pleasing to see this business momentum continue with CLV reporting a strong earnings beat in March for the first half of FY26. CLV’s first half revenue of $44m was up 17% (and above the $40m-$42m previously guided) while gross margin increased to 35.6% from  27.1%. CLV’s EBITDA of $6.9m increased 60% while NPAT increased 75% to  $4.2m.

Encouragingly, CLV is well placed to continue this earnings momentum and upgrade cycle as a result of the following:

• Imminent commercialisation of a new product – Choline (an additional infant formula ingredient) has been under R&D development by CLV for approximately 10 years. CLV is now able to produce Choline in a powder form which is able to significantly improve handling and stability in manufacturing of IMF. Following completion of a number of commercial trials, this product is expected to contribute towards CLV’s revenue from the first half of next year, with management confident of a medium-term opportunity of ~$50m, providing a substantial growth runway for CLV.
• In early 2026,  there was a major global recall of infant formula impacting brands such as Nestlé and Danone after a dangerous toxin was found in arachidonic acid (ARA) oil – different to the DHA omega oils that CLV mostly supplies (both ARA and DHA are mandated ingredients in infant formula). The contaminated product was supplied by a large low-cost Chinese company that supplies much of the ARA market,  which is a similar size to the DHA market. CLV is also able to supply ARA oil, and has already gained customers who have shifted away from the troubled Chinese supplier to purchase from CLV, and will benefit from this increased revenue in the second half of FY26.
• Further margin expansion as CLV’s product mix continues to rebalance towards its newer products that attract twice the gross margin of its traditional product offerings.

These factors saw CLV provide strong full year FY26 revenue guidance of $92m- $96m, and we would expect continued strong growth into FY27.

Other portfolio developments 

• During the month we initiated a position in Change Financial (ASX:CCA) when we participated in the selldown of a major shareholder. CCA provides tailored payment solutions, card issuing and testing to banks and fintechs, with its payment platform, Vertexon, enabling delivery of digital and virtual card solutions. For the half year to 31 December 2025, CCA delivered revenue growth of 29%, increased its underlying EBITDA by 350% to $2.7m and recorded its maiden NPAT. CCA has also recently upgraded its FY26 EBITDA guidance by ~15% to between $4.6m and $5.7m. CCA is in currently onboarding several new clients onto its payments platform which will support continued growth.
• Towards the end of the month Count (ASX:CUP) announced the acquisition of Oracle Group, a provider of financial advice, accounting and investment management services with a network of 14 offices. Oracle adds meaningful scale, having generated $26.4m in net revenue and $8.6m EBITA in FY25, and is forecast to generate approximately $10m EBITA in FY26. Last month we noted that CUP’s strong first half results saw it on track to deliver a $20m NPATA result for FY26 putting it on < 10x PE, prior to the acquisition. The Oracle acquisition is double digit accretive on an earnings per share basis, and is therefore expected to further improve CUP’s valuation metrics.
• We received a positive financial update from Yellow Brick Road (YBR), where we continue to have an unlisted position. On the back of strong business operating momentum, for the 6 months to 31 December 2025, YBR reported normalised cash EBITDA up 130% to $6.9m, with profit before tax of $3.8m (up 245%). When YBR delisted from the ASX it had a market cap of ~$18m. Following its delisting YBR significantly restructured its cost base improving its cash margins. At 31 December 2025, YBR reported net cash of $18.8m – so its cash position today exceeds its entire market cap at the time of its delisting. In line with our valuation approach for unlisted investments, we have previously revalued our YBR position to its reported NTA as at 30 June. We will reassess our YBR valuation again at 30 June 2026, where we would expect an uplift.

Concluding thoughts

As reported last month, and as discussed above,  the portfolio has encouraging momentum with many of our holdings growing at double digit rates, and the bulk of the portfolio is delivering operating leverage and impressive profit growth. The ongoing Middle East developments do present additional uncertainty around company profit outlooks, through  supply and logistics inflation and disruption, as well as potentially more broader impacts to consumer demand and the economy.   

We continue to spend considerable time engaging with our holdings and assessing these potential headwinds.  But we remain comfortable that the operating momentum and current trajectory and outlook across our diversified portfolio of companies, on the whole, continues to be positive.

Thank you for your continued support and look forward to updating you next month.