• Net Operating Income: 111.2 million.
• Underlying EBITDA: 29 million.
• Net Cash Held: 74.7 million at the end of the half.
• NOI Margin: 60 basis points, flat on the first half of FY24.
• Corporate Revenue Growth: 3.5%.
• Enterprise Revenue Growth: 13% compared to the second half of FY24.
• Consumer Segment Revenue: 34.5 million, down 3.6% on prior corresponding period.
• Operating Expenses: 82.1 million, down 1.4% versus the first half of FY24.
• Statutory Net Profit After Tax: 10.7 million, down 32.3%.
• Interest Income: 4.4 million in the first half of FY25.
• Share Buyback: 3.3 million deployed, 1.6 million shares bought back.
• Cash Conversion Rate: 59%, generating 17.1 million of underlying cash flows from operating activities.
• Debt Repayment: 11.5 million repaid, loan balance at 30.7 million.

• Warning! GuruFocus has detected 6 Warning Signs with OZFRY.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• OFX Group Ltd (OZFRY) delivered a net operating income of 111.2 million and an underlying EBITDA of 29 million, indicating strong financial performance.
• The company successfully executed a strategic pivot to focus on B2B, resulting in encouraging growth and returns.
• OFX Group Ltd (OZFRY) saw a 17.4% three-year compound annual growth rate (CAGR) in net operating income and a 12.7% CAGR in underlying EBITDA.
• The new client platform has been well-received, with over 1,000 clients onboarded, showcasing the company's ability to innovate and meet client needs.
• The company has maintained strong risk management practices, keeping bad debts below expectations and demonstrating financial prudence.

Negative Points

• The macroeconomic conditions did not align with the company's assumptions, negatively impacting the top-line results, particularly in Q2.
• Corporate average transaction values (ATVs) declined significantly in key markets, with a 13.5% global decline in September.
• The consumer segment experienced a revenue decline of 3.6% compared to the prior corresponding period, indicating challenges in consumer engagement.
• The company's statutory net profit after tax decreased by 32.3%, reflecting financial pressures.
• OFX Group Ltd (OZFRY) faced a challenging trading environment, with September being the lowest month in 17 months, impacting overall performance.

Q & A Highlights

Q: Can you clarify the number of clients on the new client platform? Is it 700 or 1,000? A: 1,000 clients have access to the new platform, with 700 being active. These 700 active clients are not included in the 32,700 corporate active clients, which would total 33,400 when included. The turnover stats do not include these clients, which would increase to 11.9 if added. - Selena Verth, CFO

Q: Will the new client platform stats be bundled into the corporate stats in the future? A: Yes, all will be combined. As the new client platform grows and non-FX revenue picks up, we will provide updated metrics on the portfolio at the full year. - Selena Verth, CFO

Q: Will all Australian clients be on the new client platform by Q1 2026, or will there be dual platforms? A: The plan is to move all clients to the new platform. We are automating the process to make it seamless, ensuring the new platform offers all existing features. We aim to make the transition as frictionless as possible. - Skander Malcolm, CEO

Q: When does the investment and rollout for the UK and Canada start? A: Investment has already started and is included in the fiscal year 25 numbers. New clients will be launched in Canada in March and the UK in July. We will finalize and share the global rollout plan by May next year. - Skander Malcolm, CEO

Q: Can you discuss capital management initiatives and the role of M&A in your strategy? A: The share buyback is active, and we continue to repay debt. We have debt capacity for potential acquisitions, but we are cautious about finding the right asset at the right price. Current share price levels make using script for acquisitions unlikely. - Selena Verth, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.