Euroz Hartleys Group reports a striking 501% jump in net profit for H1 FY2025, driven by strong capital raising and diversified revenue streams, prompting a dividend increase to 2 cents per share.
- Net profit after tax rises to approximately $6.25 million, up 501% year-on-year
- Total revenue exceeds $50 million for the six months to December 2024
- Interim dividend increased to 2 cents per share, fully franked
- Equity Capital Market raisings nearly double to $965 million
- Funds Under Management grow modestly to $4.19 billion
Robust Profit Growth Amid Challenging Market
Euroz Hartleys Group Limited (ASX: EZL), Western Australia's leading private wealth and institutional finance firm, has unveiled a remarkable turnaround in its financial performance for the first half of the 2025 fiscal year. The company reported an unaudited net profit after tax attributable to members of approximately $6.25 million, a staggering 501% increase compared to $1.04 million in the prior corresponding period.
This surge in profitability accompanies total revenue exceeding $50 million, underscoring the firm's ability to leverage its diverse business model despite subdued overall market volumes and below-average Equity Capital Market (ECM) activity.
Capitalising on Market Windows and Diversification
Euroz Hartleys attributes much of its success to capitalising on a brief but intense capital raising window early in the period, with ECM raisings reaching approximately $965 million, up 95% year-on-year. This translated into a 79% increase in ECM-related revenues, highlighting the firm's agility in navigating fluctuating market conditions.
In addition, the company’s strategic focus on expanding brokerage revenues paid dividends, with both Wholesale and Private Wealth brokerage segments posting solid growth. Total brokerage revenue rose 8% compared to the previous half, reflecting enhanced trading capabilities and client engagement.
Growing Funds Under Management and Strengthening Balance Sheet
Euroz Hartleys also reported a modest increase in Funds Under Management (FUM), climbing to approximately $4.19 billion as of 31 December 2024, up from $3.89 billion six months earlier. The firm’s management emphasized ongoing efforts to develop new strategies aimed at driving organic FUM growth while consolidating its wealth product offerings.
Supporting these operational gains is a robust balance sheet, with cash and investments totaling around $92.9 million. This financial strength not only differentiates Euroz Hartleys from many competitors but also instills confidence among its adviser network and client base.
Dividend Increase Reflects Confidence and Shareholder Commitment
Reflecting its improved financial position, Euroz Hartleys announced an increase in its interim dividend to 2 cents per share, fully franked. The dividend will be paid on 21 February 2025, with an ex-dividend date of 10 February. Notably, the Dividend Reinvestment Plan will not be active for this payout, signalling a preference for direct shareholder returns.
Executive Chairman Andrew Mckenzie highlighted the company’s cultural transformation and investment in talent as key drivers behind the turnaround. He expressed optimism about the firm’s outlook, citing a strengthening IPO and M&A pipeline alongside a resilient commodities market as tailwinds for continued growth.
With a 25-year history of returning value to shareholders, totaling $348.4 million in fully franked dividends and $40 million in capital, Euroz Hartleys appears well-positioned to sustain momentum in an evolving financial landscape.
Bottom Line?
Euroz Hartleys’ strong half-year performance sets the stage for sustained growth, but investors will watch closely for market volatility and execution on FUM expansion.
Questions in the middle?
- Can Euroz Hartleys maintain its exceptional profit growth amid fluctuating ECM activity?
- What specific strategies will drive the anticipated organic growth in Funds Under Management?
- How will the company balance dividend payouts with reinvestment in its expanding business?