Latitude Financial Services Group (LFS) H2 2024 earnings summary

Executive summary

• Achieved a strong turnaround in 2024, returning to profitability with statutory NPAT of $30.6m and cash NPAT up 139% YoY to $65.9m, reversing prior year losses.

• Opened 265,000 new customer accounts (up 22% YoY) and processed 53 million credit card transactions (up 7% YoY), with total volume reaching $8.2bn, up 13% YoY.

• Focused on asset growth, margin improvement, operating leverage, and a robust balance sheet, supported by a refreshed executive team and strategic exits from Asia and Canada.

• Signed new marquee partnerships, including Amazon, David Jones, and Officeworks, expanding the retail partner network and diversifying growth opportunities.

• Declared a final unfranked dividend of 3.0 cents per share, reflecting a 47% payout of after-tax profits, and launched a $10m capital note buy-back program.

Financial highlights

• Total purchase volume reached $6.7bn, up 10% YoY, with record-high Money Division receivables at $3.0bn (up 11% YoY) and gross receivables at $6.7bn (up 8% YoY).

• Net interest income rose 10.4% YoY to $677.5m, with total operating income up 11% YoY to $729.2m and operating income margin improving by 85bps to 11.3%.

• Cash profit before tax was $155.2m (up 59% YoY); cash NPAT from continuing operations surged 139% YoY to $65.9m.

• Net charge-offs were 3.3% of average receivables, with provision coverage at 4.29% (1.3x net credit losses).

• Tangible equity ratio closed at 7.1%, above the 6-7% target range.

Outlook and guidance

• Positioned for continued and sustained profit growth in 2025, supported by expected interest rate easing and improved macroeconomic conditions.

• Anticipates further net interest margin expansion from full-year benefit of pricing actions, funding refinancings, and central bank rate reductions.

• Ongoing investments in technology, AI, digitalization, and product innovation to drive efficiency and growth.

• Management focus remains on core Australia and New Zealand segments, with Asia and Canada exits ongoing.