hummgroup Doubles Cash Profit as Hybrid Loan Launch Nears

Robust Financial Performance

hummgroup (ASX: HUM) has delivered a standout half-year performance for the six months ending December 2024, with cash profit after tax soaring 119% to $29.8 million. This surge was underpinned by a 14% increase in assets under management, which reached $5.3 billion, and a stable net interest margin of 5.5%. Earnings per share more than doubled to 11.0 cents, reflecting strong operational leverage and disciplined cost management.

The company’s statutory net profit after tax also saw an extraordinary jump of 555%, reaching $27.3 million, signaling a significant turnaround and improved profitability across its diversified financial services portfolio.

Segment Highlights and Operational Efficiencies

The Commercial Finance segment was a key driver, with cash profit up 35% to $26.5 million and assets under management growing 18% to $3.2 billion. This segment demonstrated impressive operating leverage, increasing net operating income by 20% while reducing operating costs by 15%. Credit quality remains strong, with net credit losses maintained at historic lows.

Consumer Finance also showed promising growth, with receivables up 10% to $2.1 billion and cash profit rising 154% to $3.3 million. The Point of Sale Payment Plans business experienced an 18% volume increase, supported by strategic investments in new markets including Canada and the UK.

Strategic Investments and Product Innovation

Looking ahead, hummgroup is preparing to launch a fully regulated hybrid loan product in Australia during the fourth quarter of FY25. This product aims to expand tailored merchant offerings and open new channels, targeting larger purchases with improved return metrics. The hybrid loan is expected to enhance profitability and meet growing customer demand for flexible point-of-sale finance options.

Internationally, the group is investing in its UK, Ireland, and Canada operations to unlock long-term growth potential. Ireland has already contributed $2.9 million in cash profit during the period, underscoring the promise of these markets.

Shareholder Returns and Outlook

Reflecting its strong financial position, hummgroup declared a fully franked interim dividend of 1.25 cents per share, a 67% increase from the prior year, representing an annualised yield of 6.0%. The company holds $113.6 million in unrestricted cash and $1.4 billion in undrawn credit facilities, providing ample liquidity to support growth initiatives.

Management remains focused on profitable growth, operational efficiencies, and technology transformation, particularly within the consumer business. The reinstatement of quarterly updates signals a commitment to transparency and ongoing engagement with investors.