MA Financial downgrades earnings, but flags growth

ASX-listed lending group MA Financial has told shareholders that it anticipates its underlying earnings for the full year ending 31 December 2022 (FY22) to be less than expected.

While the financial results are still being finalised and are subject to audit review, MA Financial said it expects FY22 underlying earnings per share (EPS) to be between 38.0¢ and 38.5¢ — up 28 to 30 per cent on FY21. 

While the earnings are greater than last year, it is down from the expected 30 to 40 per cent earnings growth forecast in its previous guidance (issued in December 2021).

According to the group, FY22 EPS had been impacted by the “completion timing of multiple corporate advisory transactions that have been largely completed in FY22, but are expected to close in 1Q23”.

These transactions represent approximately $5 million in revenue or EPS of 1.1¢. 

The lender also noted that revenue per advisory executive was expected to be approximately $1.0 million in FY22, slightly below its target range of $1.1 million to $1.3 million per executive. It suggested this reflected “market volatility” in the final quarter of the year.

While the earnings forecast is down, the lender highlighted that 2022 had been one of strong growth.

For example, MA Financial flagged that total assets under management (AUM) on 31 December 2022 were up 13 per cent on the year prior, at $7.8 billion.

Gross fund inflows to the group’s managed funds were up 37 per cent in the second half of the year (compared to the same period the year prior), at $960 million.

Over $1.5 billion in new funds under management were raised during FY22, with inflows accelerating in 2H22. These were said to be driven by “investor interest in the group’s credit investing strategies”. 

The lender also highlighted the growth of its aggregation business, Finsure, which it described as a “technology-enabled mortgage marketplace business”.

The aggregator became the first in the market to utilise open banking for brokers earlier this year.

Finsure closed the year with around 2,600 brokers in December 2022, up 25 per cent over the year, and increased its volume of managed loans by 34 per cent to $90 billion on 30 November 2022.

“This growth reflects the strength of this business and our significant investment in technology and provision of service to clients,” MA Financial told shareholders.

Julian Biggins, the joint CEO of MA Financial, commented: “The momentum into the financial year-end demonstrates our unique distribution channels are continuing to deliver strong demand for our diverse range of investment funds.” 

“While the timing of corporate advisory revenue is always subject to transaction variability, to grow EPS by approximately 30 per cent in such a challenging economic environment demonstrates the strength and diversity of our business. 

“Asset Management inflows accelerated over the year and Finsure delivered strong growth as we continue to build and grow a technology-enabled residential mortgage marketplace.” 

The group is expected to provide further details on its FY22 figures when it releases its final results in February.

[Related: MA Money partners with fintech platform]