• Gross Flows: $2.7 billion into investment strategies, up 27% year-over-year.
• MA Money Loan Book: Increased 155% to $2.1 billion.
• Assets Under Management (AUM): $10.3 billion, up 12% from the prior year.
• Finsure Managed Loan Book: Increased by 26% to $139 billion.
• Corporate Advisory Revenue: Up 16% despite an 8% decrease in headcount.
• EBITDA Margin: Reported at 28.4%, adjusted to approximately 35% for strategic investments.
• Net Interest Margin (NIM): Improved to 1.3%.
• Recurring Margin: Increased to 161 basis points in the second half.
• Broker Count: Finsure added 600 brokers, totaling 3,746 brokers.
• Strategic Investment Spend: Expected to reduce to $10 million in FY25 from $13 million in FY24.

• Warning! GuruFocus has detected 10 Warning Signs with ASX:MAF.

Release Date: February 20, 2025

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

Positive Points

• MA Financial Group Ltd (ASX:MAF) achieved a 27% increase in gross inflows, reaching $2.7 billion, with significant contributions from the domestic channel.
• MA Money's loan book grew by 155% to $2.1 billion, turning a small profit in the second half, indicating strong growth potential.
• Finsure expanded its market share, outperforming competitors with its technology offering and strong growth culture.
• The company successfully diversified its asset management distribution channels, opening new growth opportunities.
• The partnership with Warburg Pincus is expected to bring in $1 billion in subscriptions, enhancing the company's capital sources and client offerings.

Negative Points

• The EBITDA margin decreased to 28.4% year-on-year, although adjusted for strategic investments, it would be closer to 35%.
• The corporate advisory market remains variable, with elongated timeframes to close out deals, impacting revenue predictability.
• Investment spending, particularly in the US private credit platform, is front-ended, affecting short-term profitability.
• The residential loan market is highly competitive, posing challenges for MA Money's growth and net interest margin (NIM) management.
• Transaction-based revenue remains uncertain and below trend, especially performance fees, affecting overall revenue stability.

Q & A Highlights

Q: With the potential reinstatement of the significant investor visa program, is MA Financial Group positioned to capitalize on this opportunity? A: Christopher Wyke, Joint CEO, stated that the infrastructure for raising capital from international investors remains intact. While the decision is up to the government, the firm is well-prepared to leverage this opportunity if it arises.

Q: How aggressive will Redcape be in pursuing new opportunities given the current market conditions? A: Julian Biggins, Joint CEO, explained that Redcape has been proactive, recycling $300 million to $400 million of assets to fund acquisitions and clear redemptions. The strategy will continue to balance acquisitions with maintaining strong distribution performance.

Q: With interest rates coming down, how do you expect MA Money's volumes to grow, and will it outpace last year's growth? A: Christopher Wyke noted that MA Money's growth is driven by its market-leading products and service provision. While it's too early to predict a spike in volume, the focus remains on maintaining competitive turnaround times and product offerings.

Q: Can you provide an update on the Warburg Pincus partnership and its revenue implications? A: Julian Biggins mentioned that the $1 billion target is progressing, with $500 million already committed. Revenue from this partnership will phase in over two years, contributing more significantly in FY26 as projects are funded and developed.

Q: How has MA Money managed to accelerate book growth and improve NIM in a competitive mortgage market? A: Christopher Wyke attributed the growth to efficient product design, quick market entry, and strong customer service. The improvement in NIM is due to a combination of competitive pricing and favorable wholesale funding conditions.

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