Insignia Financial (IFL) H2 2024 earnings summary

Executive summary

• Underlying net profit after tax (UNPAT) rose 14% to $217m, driven by higher average FUMA, cost reductions, and optimisation benefits, while statutory NPAT recorded a loss of $185.3m due to $232m in remediation and $243m in transformation and separation costs.

• Net revenue increased 0.9% to $1,393m, with EBITDA up 13.8% to $381.3m and EBITDA margin improving to 12.7bps.

• Cost optimisation program delivered $71m gross benefits, net operating expenses declined by $24m, and cost-to-income ratio improved from 75% to under 73%.

• No final dividend was paid for FY 2024 to strengthen the balance sheet and maintain capital flexibility.

• Major strategic initiatives included the successful migration of $38b from MLC Wrap to Expand and the separation of Rhombus Advisory.

Financial highlights

• Group revenue increased 0.9% to $1.39b compared to FY 2023, with net revenue margin declining to 46.2bps from 47.3bps.

• EBITDA rose 13.8% to $381.3m; underlying net profit after tax reached $216.6m.

• Free cash flow improved significantly in the second half, totaling $193m for 2H24 and $32m for the full year.

• Senior leverage reduced to 1.1x net debt to EBITDA, with net debt at $371m and available funding of $599m.

• Average FUMA increased to $301b, up from $292b in FY23.

Outlook and guidance

• FY25 net revenue margin expected to decline to 42.5–43.3bps, mainly due to portfolio reshaping, deconsolidation of Rhombus Advisory, and one-off gains in FY24.

• Group operating expenses forecast to fall from $1.11b to $947–952m, a net reduction of $60–65m, with accelerated cost optimisation.

• Strategic cost optimisation program accelerated, with an additional $30m in targeted cost savings and completion now expected in FY 2025.

• Priorities include embedding a new operating model, completing NAB separation, and enhancing digital and adviser experience.

• Capital management update to be provided at Investor Strategy Day in late 2024.