MA Financial Group (MAF) H1 2024 earnings summary

Executive summary

• Achieved record gross and net inflows, with strong growth in domestic distribution and recurring revenue streams, despite challenging market conditions.

• Significant progress in Finsure and MA Money, with MA Money's loan book up 231% to $1.4b and run-rate breakeven expected by October 2024.

• Launched major institutional initiatives: a $1b real estate credit vehicle with Warburg Pincus and a $1b strategic partnership with flexicommercial/Humm Group.

• Strategic investment in growth initiatives created a temporary earnings headwind, expected to halve in 2H24, positioning for material earnings growth from FY 2025.

• Asset Management contributed 75% of Group Underlying EBITDA before Corporate Services, with AUM up $1.1b to $9.7b.

Financial highlights

• Underlying revenue increased 5% year-over-year to $134.5m, with two-thirds recurring in nature; statutory revenue up 41% to $244.5m.

• Underlying earnings per share down 27% to 11.1c, and underlying NPAT down 27% to $17.8m, mainly due to strategic investment and interest rate impacts.

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

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

• Finsure managed loans up 22% to $121b; MA Money loan book up 231% to $1.4b as of June 30; Finsure brokers up 21% to 3,453.

Outlook and guidance

• FY 2026 medium-term growth targets remain unchanged, with continued focus on innovation and new product development.

• MA Money expected to be monthly run rate break-even by October 2024, supporting earnings per share growth in the second half.

• Recurring revenue margin expected to improve to approximately 160 basis points in the second half.

• Performance and transaction fees anticipated to be in line with FY 2023.

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