Humm Group (HUM) H2 2024 earnings summary

Executive summary

• Receivables grew 18% to AUD 5.0 billion, with Commercial up 26% and Consumer up 11%, and volumes from continuing products up 6% year-over-year.

• Statutory net profit after tax rose 145% to AUD 7.1 million, with a strong second half turnaround from a first half loss to a AUD 13.1 million profit.

• Normalized cash profit after tax was AUD 60.6 million, down 19% year-over-year, but up 16% in 2H24 versus 1H24.

• Cost reduction initiatives delivered AUD 13.6 million in 2H24, with total cost savings of AUD 31.8 million since early 2023.

• Completed a 10 million share buyback and additional share purchases for employee incentives, totaling 31.2 million shares or 6% of outstanding shares.

Financial highlights

• Interest income rose 28% to AUD 531.0 million, while interest expense increased 66% to AUD 279.6 million year-over-year.

• Net interest margin stabilized at 5.5% in 2H24, with gross yield improving by 50 basis points to 11.6%.

• Group net credit loss/average net receivables held at 1.8%; commercial at 0.7%; consumer at 3.3%.

• Cost-to-income ratio improved to 53% in 2H24, down from 64% in 1H24.

• Fully franked annual dividend of AUD 0.02 per share declared, with a final dividend of 1.25 cents per share.

Outlook and guidance

• Focus on expanding commercial offerings, especially in new regions and sectors such as agribusiness.

• Launch of regulated hybrid loan product in 1H25 to expand consumer offerings and comply with NCCPA.

• Continued investment in technology platforms to enhance customer and merchant value propositions.

• Transitioning to a cash profit metric for future reporting, removing normalized cash profit.

• Ongoing cost and complexity reduction to support strategic capital initiatives.