MA Financial Group (MAF) H1 2024 earnings summary

Executive summary

• Record gross fund inflows of $1.1 billion, up 16% year-over-year, with strong growth in domestic distribution and recurring revenue streams despite uncertain market conditions.

• Assets under management rose 13% to $9.7 billion, driven by domestic demand and positive research ratings.

• Finsure managed loans increased 22% to $121 billion; MA Money loan book surged 231% to $1.4 billion, with break-even expected by October 2024.

• Launched two major institutional initiatives: a $1 billion real estate credit vehicle with Warburg Pincus and a $1 billion strategic partnership with flexicommercial.

• Strategic investment spend created a temporary earnings headwind, expected to halve in 2H24, positioning for material earnings growth from FY25.

Financial highlights

• Underlying revenue increased 5% year-over-year to $134.5 million, with 66% recurring; statutory revenue up 41% to $244.5 million.

• Underlying EBITDA fell 16% to $38.3 million; underlying NPAT dropped 27% to $17.8 million; underlying EPS down 27% to 11.1 cents.

• Dividend maintained at 6 cents per share, fully franked.

• AUM up 13% to $9.7 billion; gross fund flows up 16% to $1.1 billion, with domestic flows up 52%.

• Finsure managed loans up 22% to $121 billion; MA Money loan book up 231% to $1.4 billion as of June 30.

Outlook and guidance

• Underlying EPS in 2H24 expected to be materially higher as MA Money achieves profitability and growth investments moderate.

• Asset Management expects continued fund inflows and recurring revenue margin expansion to approximately 160 basis points in 2H24.

• MA Money on track for break-even by October 2024, supporting earnings per share growth in the second half.

• Performance and transaction fees anticipated to be in line with FY23.

• Investment spend to halve in the second half, supporting improved operating leverage.