Sequoia Financial Group (SEQ) H2 2024 earnings summary

Executive summary

• Achieved strong FY24 results with 26% revenue growth to $124.6m, 88% increase in operating profit to $8.7m, and significant NPAT growth to $24.0m, despite operational disruptions from a 249D notice.

• Sale of Morrison Securities and Yield Report drove substantial profit from discontinued operations and enabled a fully franked dividend of 7.0cps.

• Streamlined structure from four to two divisions, integrated acquisitions (Castle Corporate, ABS, Clique Paraplanning), and executed a share buyback reducing issued capital by 4.3%.

• Continued focus on capital management, organic growth, and selective bolt-on acquisitions.

• Company remains debt free with $16.8m cash at bank at year-end.

Financial highlights

• Revenue rose 26% year-over-year to $124.6m, driven by organic growth in Licensee and Adviser Services.

• Operating profit (normalised EBITDA) increased 88% to $8.7m; operating cash flow up 69% to $4.8m.

• NPAT surged to $24.0m, up 1,012% year-over-year, reflecting gains from discontinued operations.

• Fully franked dividends of 7.0cps declared, with a franking credit balance of $21m; FY24 franked dividends grew 49% over FY23.

• Net cash position of $16.8m and no bank debt at year-end.

Outlook and guidance

• Targeting organic revenue growth and further operating profit margin expansion in FY25.

• Committed to increasing fully franked dividend payout ratio towards 90% of operating profit after tax.

• Selective use of share buybacks to enhance shareholder value.

• Focus on cross-marketing, technology investment, adviser growth, and bolt-on acquisitions in both core divisions.

• Ongoing organisational efficiency and portfolio optimisation targeted for sustained growth.