Strategic Investments Pressure Margins but Fuel MA Financial’s Growth Outlook

Strong First Half Performance

MA Financial Group Limited has reported a standout first half for fiscal 2025, with underlying earnings per share (EPS) soaring 26% compared to the same period last year. This growth was underpinned by record first half underlying revenue of $163.4 million, reflecting robust demand across its diversified financial services operations.

The company’s asset management division led the charge, with assets under management (AUM) increasing by 31% to $12.7 billion. This growth was fuelled by strong inflows into private credit funds and a strategic acquisition of IP Generation, which adds $1.9 billion in retail shopping centre assets to MA Financial’s real estate portfolio.

Lending and Technology Expansion

MA Money, the group’s non-bank mortgage lender, experienced explosive growth with its loan book expanding 134% to $3.3 billion. This surge was accompanied by an improved net interest margin, rising to 1.5% from 1.1% in the prior year, driven by better funding costs. The lending platform benefits from a capital-efficient funding model, including securitisations and balance sheet co-investments.

Meanwhile, Finsure, the group’s financial technology arm, continues to strengthen its market position, managing over $155 billion in loans and expanding its broker network by 17% to more than 4,000 brokers. This platform’s growth is a key driver of recurring revenue, which now accounts for approximately 74% of total group revenue, enhancing earnings stability.

Corporate Advisory Momentum

The corporate advisory and equities segment also delivered solid results, with advisory fees up 19% on 1H24. The division benefited from increased merger and acquisition activity and capital structure advisory work, supported by gradually improving equity market conditions. The company expects this momentum to continue into the second half, with a strong pipeline of transactions anticipated to add approximately $12 million in fees for FY25.

Outlook and Strategic Investments

Looking ahead, MA Financial is confident of material earnings growth in the second half of FY25 and beyond. The group is targeting $15 billion in AUM by December 2026, implying a compound annual growth rate of 12%. The loan book is expected to reach $4 billion, while Finsure aims for $190 billion in managed loans.

Strategic investments remain a focus, particularly in expanding distribution channels across the US, Singapore, and New Zealand. The acquisition of IP Generation is expected to complete in early September, further strengthening the real estate platform. While these investments have temporarily impacted margins and earnings, management views them as critical to long-term value creation.

MA Financial maintains a strong balance sheet, with $30 million in cash and $55 million in undrawn revolving credit facilities, providing flexibility to support growth initiatives. The company declared a fully franked interim dividend of 6 cents per share, consistent with the prior year.