HMC Capital (HMC) H2 2024 earnings summary

Executive summary

• Achieved record financial results in FY2024, with pre-tax operating earnings up 57% to $129 million and operating EPS rising 40% to 37.0cps, driven by new revenue streams and significant recurring earnings growth.

• Assets under management (AUM) grew 30% year-over-year to $12.7 billion.

• Established three new growth platforms: private credit, energy transition, and digital infrastructure, supported by strategic hires and acquisitions.

• Five-year annualized shareholder return since listing is 29%.

• Maintained a net cash position with $1.4 billion in net tangible assets and undrawn debt, and $2.5 billion in dry powder.

Financial highlights

• Total revenue rose 42% to $189.5 million, with over 50% from recurring funds management income, up 37% year-over-year.

• Operating margin increased to 68%, aided by a $15.6 million performance fee.

• Pre-tax operating earnings before tax grew 57% to $129.3 million; post-tax operating earnings rose 45% to $115.0 million.

• Investment income increased 60% to $95 million, representing an 11% annual return on balance sheet investments.

• Final dividend of 6.0cps declared, with FY24 total dividend at 12.0cps and FY25 guidance maintained at 12.0cps.

Outlook and guidance

• Expectation to sustain operating margin above 60% and maintain strong operating EPS growth in FY25.

• Private credit AUM targeted to double in FY2025, with strong momentum from Payton acquisition and new lending activities.

• Real estate transactional activity and investor appetite expected to increase as rates ease.

• Deep transaction pipeline in digital infrastructure, energy transition, and private equity, with potential for outsized profit events.

• Fundraising environment described as highly optimistic, with significant untapped opportunities across all platforms.