N1 Holdings Limited reports robust growth in revenue, EBITDA, and profitability for the December 2024 quarter, underpinned by disciplined risk management and a refined funding strategy.
- Net profit of approximately $633,000 for HY2025
- Revenue increased 26.34% to $10.63 million in first half FY25
- Strong cash balance of $15.187 million at quarter end
- SME lending business accounts for 94% of customer cash receipts
- Expanded funding capacity and reduced cost of funds
Navigating a Challenging Lending Environment
N1 Holdings Limited (ASX: N1H) has delivered a solid quarterly update for the period ending 31 December 2024, demonstrating resilience and growth despite a tougher operating environment marked by higher funding costs and reduced market transaction volumes. The company’s strategic focus on risk control, funding optimisation, and operational efficiency has translated into improved financial outcomes.
Management’s cautious stance on lending, eschewing construction and development loans in favour of secured lending against established, yield-generating commercial and residential properties, continues to underpin the quality and stability of the loan book. This conservative approach has helped maintain a strong equity buffer and liquidity, balancing risk and reward effectively.
Financial Performance Highlights
For the first half of the financial year ending 30 June 2025, N1 Holdings reported an unaudited net profit of approximately $633,000 and EBITDA of $814,000. Revenue rose by 26.34% year-on-year to $10.63 million, reflecting the company’s ability to grow its top line amid challenging conditions.
The second quarter alone generated $5.35 million in gross revenue and a net profit of around $83,000. Cash receipts from customers totaled $2.93 million for the quarter, with the SME lending segment, comprising direct lending and management fees from the One Lending Fund, accounting for 94% of this inflow. This segment remains the core revenue driver, highlighting the company’s strong positioning within the SME lending market.
Robust Cash Flow and Funding Position
N1 Holdings reported a net cash inflow from operating activities of $6.612 million for the quarter, contributing to a healthy cash balance of $15.187 million at 31 December 2024. The company’s total lending capacity stands at approximately $205 million, supported by $35 million in balance sheet capital, $150 million in debt facilities, and $20 million managed through the One Lending Fund.
Notably, the company has made significant strides in expanding its funding sources and reducing its cost of funds, with a new funding arrangement nearing completion that is expected to enhance lending rates and capacity. This development is critical as N1 prepares for anticipated growth in deal flow and loan book quality in 2025.
Strategic Outlook and Market Position
Looking ahead, N1 Holdings plans to intensify marketing efforts, leveraging its network of mortgage brokers and real estate referral partners to strengthen deal flow quality. The company’s unique positioning as a property-backed private credit lender focused on SMEs, combined with its diversified and resilient funding base, positions it well to navigate the evolving lending landscape shaped by alternative banks and non-bank lenders.
Management remains vigilant, continuously monitoring economic indicators and maintaining a disciplined approach to risk and capital deployment. This prudent strategy aims to sustain profitability while capitalising on opportunities presented by market shifts.
Bottom Line?
N1 Holdings’ disciplined strategy and funding enhancements set the stage for continued growth, but market volatility remains a watchpoint.
Questions in the middle?
- How will the new funding source impact N1 Holdings’ lending rates and deal capacity?
- What are the potential risks if market transaction volumes remain subdued?
- How will the company balance growth ambitions with its conservative risk appetite?