Australian Finance Group (AFG) H2 2024 earnings summary

Executive summary

• Achieved record broker network of over 4,000, writing 1 in 10 Australian residential mortgages, with a 74% broker channel share and $200bn residential loan book, up 3% year-over-year.

• Distribution segment delivered strong growth, with record broker recruitment and robust expansion in both residential and commercial mortgage markets.

• Technology investments, including BrokerEngine and Fintelligence, peaked in FY24, enhancing broker efficiency and supporting recurring revenue.

• Diversification strategy increased gross profit per broker and expanded product offerings.

• Strong cash generation and a conservative balance sheet position the group to capitalize on market opportunities.

Financial highlights

• FY24 NPAT was $29 million, down 22% year-on-year; underlying NPATA was $36.1 million, down 25%.

• Total revenue reached $1.08bn, up 7% year-on-year, driven by growth in residential settlements and trail book.

• Distribution segment earnings rose 20% to $54 million, representing nearly 80% of total earnings; Manufacturing segment earnings fell 53% to $15 million.

• Operating expenses reduced by $3 million year-on-year, with cost savings from lower headcount and discretionary spend.

• Cash conversion ratio at 107%; cash and liquid assets total $190 million.

Outlook and guidance

• Strong start to FY25 with July 2024 residential lodgements up 29% and AFG Securities lodgements up 186% year-on-year.

• Optimism for continued broker network growth, supported by technology, new product launches, and improved funding conditions.

• Broker market share expected to exceed 80% as industry trends favour broker channels.

• Focus on disciplined growth in AFG Securities, targeting 10% of flow into proprietary products.

• Technology investment to normalise in FY25, with new platforms expected to drive further broker efficiency and earnings growth.