Half Year 2026 MA Financial Group Limited Earnings Call Transcript
Key Points
- Record first-half FY2026 underlying earnings growth of 45%, with EPS growth of 96% when including notable items.
- Recurring revenue increased to 72% of total revenue, reaching $154 million, nearly four times the level five years ago.
- Assets under management grew 44% to $15.5 billion, supported by the IP Generation acquisition and strong organic growth.
- MA Money's loan book surged to over $8 billion, with upgraded FY2026 NPAT guidance of $25-$30 million.
- Interim dividend increased by 33% to $0.08 per share, fully franked, reflecting confidence in the business.
- Strong post-balance date momentum with over $400 million in gross flows and $166 million in net flows in the first six weeks of H2.
- Corporate Advisory has a strong pipeline with approximately $50 million in fees booked or de-risked for FY2026.
- Redcape Hospitality delivered strong performance, with the fund returning over 17% and over $500 million in pub transactions to settle in H2.
- Finsure's loan book grew to $193 billion, with revenue per broker increasing materially due to broker rationalization.
- New three-year targets (FY2029) set, with management confident in achieving them based on a strong track record.
- Net flows in asset management were subdued in H1 due to intense focus on private credit and softness in the residential market.
- Recurring revenue margin declined by 9 basis points to 159 basis points, driven by lower fees in real estate credit and a shift in product mix.
- Gross flows were down slightly year-on-year, reflecting a tougher environment for private credit and closed listed markets.
- The company missed its previous FY2026 EBITDA margin target due to heavy investment, raising questions about the achievability of new targets.
- Real estate credit experienced neutral to slightly negative flows, with no immediate signs of green shoots in the market.
- The residential market remains weak post-federal budget, impacting net flows and the range of fees in real estate credit.
- The sale of Marion Shopping Centre reduced AUM by approximately $600 million.
- Elevated redemptions in some liquid funds are partially offsetting strong gross inflows.
- The U.S. private credit platform is still in early stages, with strategic spend running to plan but not yet contributing significantly to earnings.
- The company faces potential headwinds from proposed federal budget changes affecting the residential market, though Finsure's fee-for-service model mitigates some impact.
I would now like to hand the conference over to Julian Biggins, Joint CEO. Please go ahead.
Good morning, and welcome to the first half FY 2026 result for MA Financial Group. My name is Julian Biggins, and I am the Joint CEO of MA Financial, sitting alongside Chris Wyke, who is here in the room with me. We also have Giles Boddy, CFO; and Michael Leonard, the Head of Investor Relations.
We are very pleased to deliver a record result and strong outlook in what many would consider challenging conditions. I will start slide seven with the key highlights. Today, we report underlying earnings growth of 45%, with strong performance across a diversified business. This excludes the large notable item which is attributable to the combined outcome of divesting of both Infinite Care and Hotel Brunswick in the period. If these were added back to the result, the EPS growth would have been higher at 96%.
As earnings grow, we expect to increase our fully franked
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