HMC Capital’s Strategic Acquisitions Fuel 680% Profit Surge in 2024 Half-Year

Robust Financial Performance Amid Strategic Expansion

HMC Capital Limited has delivered a striking half-year financial performance for the period ending 31 December 2024, with statutory profit after tax soaring to $274.5 million, a 680% increase compared to $35.2 million in the prior corresponding period. This leap was underpinned by a significant rise in revenue to $127.3 million, driven by management fees, dividend income, and substantial fair value gains on investments.

The company’s operating earnings before tax more than tripled to $202.2 million, reflecting the underlying strength of its diversified funds management operations. Operating earnings after tax reached $140.5 million, highlighting the core profitability of the business beyond one-off valuation effects.

Strategic Acquisitions Bolster Growth Platforms

Central to HMC Capital’s growth story were two transformative acquisitions completed during the half-year. The purchase of Payton Capital Limited in July 2024 for $128.2 million established a foothold in the private credit market, particularly commercial real estate loans, positioning HMC to build a diversified private credit platform spanning corporate, mezzanine, and infrastructure loans.

Shortly after, the acquisition of Stratcap LLC in September 2024 for $26.9 million marked HMC’s entry into the digital infrastructure sector. Stratcap’s expertise in digital infrastructure funds management complements HMC’s broader strategy to capitalize on the rapidly expanding data centre market.

DigiCo REIT Listing and Energy Transition Initiatives

In December 2024, HMC Capital launched the DigiCo Infrastructure REIT on the ASX, a listed vehicle owning and operating data centres across Australia and the United States. With a $4 billion portfolio and a robust development pipeline, DigiCo REIT is expected to significantly enhance HMC’s recurring funds management revenue and transaction fees. HMC retains a 19.4% equity stake in the REIT, which is equity accounted in its financials.

Further diversifying its portfolio, HMC made its inaugural investment in the energy transition sector through StorEnergy, a utility-scale battery storage developer. The company also committed $950 million to acquire Neoen’s Victorian renewable generation and storage portfolio, a move that will seed HMC’s Energy Transition Platform. This platform aims to build a substantial asset base across the energy value chain, with fundraising targeted for first close in 2025.

Capital Management and Shareholder Returns

HMC Capital strengthened its balance sheet with a fully underwritten $300 million institutional placement at $8.75 per share, supporting its acquisition strategy and growth initiatives. Net tangible assets per share increased to $4.22 from $3.54 at the previous year-end, reflecting enhanced asset quality and capital base.

The board declared a fully franked interim dividend of 6.0 cents per share, consistent with the prior year’s final dividend, signaling confidence in sustained earnings and cash flow generation.

Outlook and Market Positioning

HMC Capital’s half-year results underscore its successful pivot towards high-growth sectors such as private credit and digital infrastructure, supported by strategic acquisitions and capital market initiatives. The company’s expanding footprint in energy transition assets also positions it well to capture emerging opportunities in renewable energy and storage.

While integration risks and market volatility remain considerations, HMC’s diversified platform and strong capital position provide a solid foundation for continued growth and shareholder value creation.