Dynasty Trust Q2 2026 Report

Dynasty Trust NAV increased by 7.2% after all fees in the June 2026 quarter.

“a portfolio of quality businesses under the aegis of controlling shareholders” Performance and net asset value † after all ongoing management and performance fees. Administrative notes: Distribution The distribution per unit XD on 30 June 2026 is $0.031927 (3.19c) mainly comprised of net capital gain. Name change The trust has changed its name to “Dynasty Trust” to reflect the recognition gained since we established the entity in late 2022 and we have a corresponding new logo.

Substack We now run a substack Andrew Brown | Substack which allows us to write (with full disclosure and disclaimer) about companies and other issues where the content is at greater length than other social platforms but not to the depth of our quarterly reports. We have already commented on Bolloré, Frasers Group, Virtu and some wider issues in Australian banks. Dynasty Trust NAV increased by 7.2% after all fees in the June 2026 quarter.

We were still marginally impacted by the major performance influence of the twelve months to 30 June 2026 (Australian fiscal year, henceforth FY2026) being strength in the Australian dollar against virtually all currencies. We estimate over the course of the past year, the A$ has stripped over 6.5% from performance given that we choose NOT to hedge the currency. The philosophy of not hedging the A$ is borne out by two features: - the fact we benefitted by ~500bp in the prior financial year; and - the rapid and opposing shift in interest rate perceptions in both Australia and the USA over the past two months.

This quarterly is in three parts: - assessing the past quarter and twelve months and where we could have done better; - a high-level examination of why we find travel businesses so interesting, attractive but often difficult from an investment standpoint; and - a detailed assessment of a unique “travel” holding in our portfolio: the Australian company EVT Limited On 28 July 2026, starting at 7am UK time (4pm Australian East Coast time) we are presenting at “Weird Sh*t Investing Online” an online conference put on by Swen Lorenz of “Undervalued Shares”.

BOOK at: Thoughts on the past year of Dynasty Trust We haven't discussed our portfolio approach and outcomes in a while and felt it is an appropriate juncture to do so. Examining the performance over the past twelve months – FY2026 – acknowledging that it is a short period, we are marginally disappointed. Given the deliberate restrictions and discipline of where we invest, the two and three year numbers are more acceptable and have been created with a fraction of the volatility of many other funds and wider indices from a long only, ungeared, unhedged portfolio.

At this stage, any mild disappointment is not from major business or valuation errors within the portfolio but from omission. Not just in memory chips where Samsung Electronics (005930.KS) is within our universe of controlled companies. We attended a fabulous morning debate on the industry with back-to-back presentations 1 on Micron Technologies (MU), TSMC and ASML

so we were aware of the dynamics – and the shares have risen 75% since then (late March) and 387% in US$ terms over FY2026. Of other companies in our universe where we have real familiarity, we failed to take advantage of opportunities in businesses as diverse as: - Alphabet +100% in FY2026; - Hochtief, the German construction company part of Spain's ACF +203% in FY2026; - Madison Square Garden Sports (the teams) +92% and Entertainment (the venue)

+102%; and - Frontline PLC, the Fredriksen family-controlled shipping tanker owner +112% in FY2026. On the flipside, however, our valuation disciplines were heavily vindicated. Many other managers with outstanding business analytical capabilities and exceptional long-term track records lost the latter attribute in Q4CY25 (Q2FY26) and Q1CY26 (Q3FY26) when the AI “wave” wreaked a precipitous share price de-rating across many service-based sectors, notably software and related platforms.

The missing discipline – in our view – was an awareness of how far beyond “normal” valuations certain “outstanding” businesses had become, especially on a free cash flow yield basis. Acceptance of 2% or below FCF yields for robust but mature compounders was deemed acceptable – an effective 50year payback – and continued imputation of unrealistic double digit percentage growth rates against real, but containable, business threats. As did multiple earnings re-ratings of the same story.

As long ago as February 2024, we noted the story around the core private equity businesses – all in our universe - hadn't changed in seven years, but growth HAD progressed. Rather more progressive was the re-rating of each dollar of earnings, despite the emerging issues with private credit, which clearly presages problems within private equity, and increasingly sketchy participation in round-robin financings. We continue to be patient with a small number of holdings where the securities trade at major discounts to intrinsic value but where board and management are executing well at both a business and capital allocation level.

Put Avation PLC, Laurent Perrier and Compagnie de L'Odé in this category. Higher levels of individual security volatility – to the benefit of our largest holding Virtu Financial – served up an opportunity to acquire an archetypal “Peter Lynch/Victor Kiam” business 2 in the latest quarter. The consensus expectation of May's NASDAQ listing for Wise Group PLC facilitating a re-rating of the shares proved (as usual) fallacious – indeed the shares reached an eight-month high on the appointed day and promptly fell 32% in a month, to our benefit.

This was partly propagated by a Belgian enquiry into the company's systems and compliance with AML protocols. We know Wise is a business that many regulated banks would love to kill off despite a small number of them being clients to utilise its exceptional systems; we know from experience that commercial banks don't always play clean. Whilst the regulatory analysis might be difficult, the financial analysis is very straightforward, given Wise' disclosures.

Wise make a deliberately declining “margin” – “take rate” – on cross-border volumes which are disclosed for both business and personal customers, whilst earning interest on customer balances and paying away some of this in certain currencies, subject to regulation, back to depositors. So it's simply: (volume estimate x take rate) + net interest margin + card fees – operating costs = profit. With rolling twelve months to March 2026 cross-border volumes up 31.5% feeding 17.3% revenue growth and customer balances up over 36%, in our view, the company is at an advantageous point of the growth curve.

The shares are currently priced at a forward P/E of 22x with 27% ROE and – subject to regulatory compliance – a competitive advantage which doesn't appear to reflect this. The manner in which sophisticated banks have been disintermediated across other areas of their business is instructive. In Australia, mortgage lending has migrated away from direct lending to a brokerage model relatively rapidly 3 .

Allied to lesser reverence for major banking institutions by newer generations suggest the Wise Group's of the world have a position at the centrepiece of millennial and Gen-Z finances not envisaged a few years ago. Contribution and Portfolio positions The major contributions to return in the latest quarter and FY2026 were as follows; the FY2026 figures in brackets are the local currency estimated equivalents. Returns are for period or to divestment: At 30 June 2026, Dynasty Trust's ten largest portfolio positions as a percentage of net asset value were as follows: At quarter end, we held 22 exposures and retained 3.4% net cash weighting after all accruals.

Investing in travel – journeying to less mainstream destinations Like the activity itself, investing in “travel” becomes significantly more difficult when the destination (investment) is less mainstream. The Amazonian jungle via Puerto Maldonado rather than the Eiffel Tower. Living in Sydney, getting to Paris is a fair effort (~23 – 28 hours) but has very established navigations; Sydney to the Peruvian jungle is rather trickier and has several different ways to arrive at this massive and beautiful mosquito farm.

For Dynasty Trust, investing in “travel” through businesses with controlling owners, often necessitates far more complex analysis – versus a widely held Expedia, Hilton Worldwide or airline. The diseconomy of scale – bespoke analysis - should eventually provide a worthwhile reward, since its necessity acts as a deterrent to many other potential investors and aids in the de facto mispricing of equity. We have direct travel exposures to four securities, all on different listing exchanges and two indirect through aviation exposures – an airport (Fairfax India Holdings, dominated by its 74% equity holding of Bengaluru International Airport) and aircraft leasing (Avation, a specialist turbo-prop lessor).

Our direct exposures, accounting for 18% of the portfolio at 30 June 2026, break into two groups: - Hotels: HBX International (Spain) – a wholesale hotel aggregator - and EVT Limited (Australia); - Travel retail: Avolta (Switzerland) and Lagardère (France) The two hotel exposures have issued mild cautionary statements since the advent of the Middle East conflagration at end February 2026, with its impact on oil prices, briefly elevated jet-fuel spreads and flow-on impact to air fares. With the “ceasefire” between Iran and USA, traded Brent oil prices have now subsided.

We also note the impact of the new EU biometric arrival identification procedures which represent a short-term disincentive to travel, which may be more evident in Q3CY2026. The period since late February 2026 has shown that travel securities - in our portfolio at least – have a geo-political inverse beta – they are very weak when military activity in the Middle East steps up – partly because of the impact of numerous high traffic hub airports in the region – but quickly bounce back when the consensus feels a resolution (of sorts) is more proximate.

We find “travel” to be a very attractive thematic, but not without risk and requiring a differentiated thought process. The risks within the sector are very clear: - Several investment avenues – hotels, airlines - are of a fixed cost nature affording large scale operating leverage, which causes difficulty when external factors – economy, politics, pandemic – dramatically slow short-term demand; - These negative extraneous factors often have no defined time frame; - Travel is an attractive, large and fragmented marketplace ripe for the entry of disruptive technology; and - Numerous investment opportunities are highly regionalised and so subject to local rather than desirable global factors – hotels (again) and airports.

We have mainly (not exclusively as illustrated in this letter) tried to negate these difficulties with a focus on global businesses. These include aircraft leasing, though there are increasingly fewer listed avenues, travel retail and technology driven booking engines. Over the past few months, we have re-emphasised the exceptional long-term thematic.

This thesis is simple and been discussed previously in our presentations and quarterlies. The advent of aircraft leasing in the 1970’s eventually combined with airline deregulation in the US (1970s) and Europe (1980s) to facilitate the creation of low-cost carriers. Allied to increasing wealth in developing countries, the same forces have swept across Asia and India.

Consequently, global air passengers expanded at a compound growth rate of 5.3%pa – in a virtually smooth upward line - until COVID 4 . The bounce back after COVID, in our view, is a practical example of the fact that, if possible, human beings have a strong desire to discover, interact and discover cultures other than those within which they live. A reason that totalitarian regimes remove such opportunities.

Growth in the entire travel and tourism industry is such that travel and tourism is estimated to account for around 10% of global GDP . 5 There is a strong correlation with emerging wealth and “middle class” with a steep S-curve of travel spending per head as GDP per capita moves up through the US$10,000 mark 6. The travel eco-system is comprised of numerous two-sided markets with enormous fragmentation and potential friction costs – foreign exchange, yield optimisation mechanisms – which sit on top of industries which have fixed cost structures (airlines, hotels) and where the inability to sell capacity has demonstrably larger impacts on profitability.

Despite the obvious ability to arbitrage price, the industry continues to accommodate specialist, tailored human providers, simply because of the fragmentation and qualitative desires of the traveller. However, it's an arena where AI and its sponsors see a greater opportunity than ever before to break into the industry. For example, there's little doubt that AI's use to parse together airline schedules is having an impact on the B2C component of the market.

It continues to be one of the holy grails for groups such as Alphabet; what restrains them is the requirement to create the relationships with many hundreds of thousands of enterprises offering the product: hotel rooms, tours, experiences and to a lesser degree flights. It's a classic arena where the “AI debate” about owning the data and distribution capability versus the underlying software and technology meets head on. The industry is an obvious one – as banking was in the early 2000's – where new technology benefits not only the creators but also the implementors and ultimately the customers.

Travel retail is a specifically neglected area within public company analysis due to the absence of listed exposures, the closely held nature of the ones which are available and the complexity of accounting within the industry. That's despite the benefits of AI adoption due to the data analysis which increasingly underpins the industry. Travel retailers operating in the cross-border space have additional data points (passport, nationality, flight patterns) with which to hone their offerings.

Outside of airlines, investors have tended to focus on two larger groupings of companies due to their size, high returns on capital and global proliferation: - hotel management, franchise and brand companies – Marriott, Hilton, IHG and Hyatt; and - booking engines – Expedia and Booking Holdings These investments represent economies of scale for the analyst; the analytical diseconomies of scale largely arise from accounting complexity. These diseconomies mean that few sell side analysts – and their firms – find it commercially worth the effort to closely follow Avolta and Lagardère other than for “intelligence” and information purposes, especially if they are listed on non-US exchanges.

That is to our benefit. In our view, there are seven thematic areas of accounting which dissuade investors from participating in the broad non-airline travel sector: - IFRS16 (lease accounting) being a particular menace in travel retail with numerous types of leases – conventional, revenue share and co-venture rendering the use of EBITDA and EV/EBITDA metrics utterly useless ; - “profit” and cash flow are extremely divergent even in basic business models, with the requirements for deposits and up-front payments – especially through booking engines and other agency arrangements – leading to large scale deferred revenues carried as liabilities against what appear to be unrestricted cash assets, thereby understating the magnitude of real debt within a business; - major seasonality, depending on the location of the business and its service sector – cash flows unavoidably swing wildly from half (quarter) to half (quarter); - the natural use of joint ventures and associates given the global nature of major players but their need for local “on the ground” know-how – this is especially prevalent in the two major travel retail exposures and gives rise to meaningful minority interests which have a genuine cash as well as accounting impact; - “travel” is often part of a wider conglomerate structure necessitating “sum of the parts” arithmetic with which many analysts remain uncomfortable; - as a subset of the point above, the extensive use of “ agent versus principal ” exposures which have far different return on capital profiles, especially in the hotel industry and have difficult “double counting” aspects; and - as a result of all of the above, finding screening type tools which negate these issues is difficult.

One of our only two Australian exposures came available at an attractive entry point for many of these accounting difficulties as well as a strategy which was heavily disrupted by the second and third-level effects of COVID. The shares of EVT Limited which we discuss in detail below, are trading at the same price as they were eleven years ago. Proving up a useful valuation guide to the company is extremely difficult despite reasonable disclosure – there are some areas which could be improved - which can be usefully adapted.

Issues such as ensuring a lack of double counting between property values and operations, especially in hotels and to a degree in the entertainment arena. EVT encapsulates so many of the investing deterrents inherent in “travel” especially where the motivation to dig deeply is dulled by the fact the Chair controls ~42.5% of the issued shares and EVT has a sizeable group of loyal individual and institutional shareholders disinclined to sell. The attractive “travel” story is hidden away underneath a property portfolio and cinema exhibition business.

Would EVT ever contemplate a split, or is it too late? To assess the company, we deal firstly with the history – an essential to understand the two phases of asset accumulation – composition of value and potential end-game then providing the evidence on the “treasure trove” Sydney CBD property portfolio, the hotel ownership and management business (our key reason for investing), cinema interests and ski resort. EVT Limited: Enduring assets with no known dynasty (All figures in this assessment of EVT are in A$; no assessment of tax liability on any asset sale is undertaken due to the historic nature of many assets)

EVT is the antithesis of a US activist capital management story. No patience, no play. For all the intent shown by the company to move to the next “stage”, they represent another entity for whom the direct and indirect impact of COVID has pushed out the transition timeline to a degree which has frightened off many prospective investors.

EVT is a A$2.1billion entertainment and leisure business built around a series of assets accumulated in the 1930’s (cinemas and properties) and in the 1980’s and 2000’s (hotels, ski resort, more properties). The two phases reflect the period of management of the two generations of Rydge family who have controlled the group through these periods: Sir Norman Rydge who accumulated (below) cornerstone historic Sydney CBD properties and his son and current Chair, Alan Rydge – having taken over in 1980 as a 28year old upon the death of his father - presided over the 1980’s build out and ongoing development/pruning of the legacy assets and addition of neighbouring property assets in Sydney’s CBD – mirroring his personal residential property strategy.

The company has long been an asset rich, conservative – but not static – business with long standing shareholders of a similar ilk. This piece is not about assessing near term earnings trends , which can be volatile given operating leverage (hotels) and variability outside the control of the company – cinema releases and weather at the Thredbo ski resort. It is about providing a sensible guide to assessed value and how the share price discount might close.

Aside from inherent value and the puzzle of its liberation, as a enterprise, EVT appears set to be a two-generation dynasty. Mr. Rydge (aged 74 last month) and wife have no children. They are understated but highly generous philanthropists suggesting that within the next 30 years, there is a fair chance of the two family-controlled shareholding blocks benefitting desired family causes through eventual charitable donation; of course, an outright sale could not be ruled out but that would be unusual for this very private and conservative family.

Their desire for privacy – including owning six blocks of property in one of Sydney’s most expensive streets 7 – means that questions regarding the ultimate “fate” of the shareholdings remain publicly unanswered. However, no course of eventual action suppresses the desire to build value. A brief history of EVT’s origins is of assistance in understanding why recent initiatives are not an easy emotional process for the company.

We don’t need to go through the twisted history of Australian cinema production, exhibition and distribution between its three contemporary players – EVT, Hoyts and Village Roadshow, but jump right back to the 1920’s and 1930’s. EVT’s heritage traces back to 1911 and the early days of Spencers Pictures, Australasian Films and Union Theatres, and the sad story of Spencers founder, Cosens Spencer (who was born Spencer Cosens8). Between 1911 – 1913 the various exhibition and filmmaking companies9 combined – amidst no little rancour – to create “The Combine” which dominated the early days of film in Australia.

Sir Norman Rydge was born in 1900 and might be reasonably described as something of a stockmarket prodigy. He began running a hotel business at age 25 (Carlton Hotel) and founded Rydge’s Business