Liberty Group’s Credit Risk Models Face Scrutiny Amid Profit Growth
Liberty Group reported a solid 15.7% rise in net profit after tax to $133.3 million for FY25, supported by steady revenue growth and improved asset quality. The company also announced a special dividend, reflecting confidence in its financial position.
- 15.7% increase in net profit after tax to $133.3 million
- Revenue growth of 2.1% to $1.49 billion
- Impairment losses down 21.9% year-on-year
- Final distribution of 19.92 cents per stapled security and special dividend of 15 cents
- Executive remuneration aligned with strong financial and non-financial KPIs
Financial Performance and Growth
Liberty Group (ASX, LFG) has delivered a robust financial performance for the year ended 30 June 2025, with net profit after tax rising 15.7% to $133.3 million. This growth was underpinned by a 2.1% increase in revenue to $1.49 billion, driven by a 4.0% expansion in average financial assets to $14.7 billion. The Group’s ability to manage credit risk effectively was evident in a 21.9% reduction in impairment losses, reflecting improved portfolio risk characteristics and a shift in asset mix towards higher yielding segments.
Dividend and Distribution Highlights
In recognition of its strong earnings and capital position, Liberty Group declared a final distribution of 19.92 cents per stapled security, payable on 15 September 2025, following an interim distribution of 12 cents. Additionally, the Board announced a special dividend of 15 cents per stapled security, signaling confidence in the Group’s ongoing cash flow generation and balance sheet strength. The Group’s net tangible assets per stapled security increased slightly to $3.17, reinforcing its solid capital base.
Executive Remuneration and Governance
The company’s remuneration framework continues to align executive incentives with both financial and non-financial performance metrics. Medium and long-term incentives awarded to key management personnel reflect achievement against targets including earnings growth, customer satisfaction, and environmental, social, and governance (ESG) measures. The Board maintains rigorous oversight of remuneration to ensure it supports sustainable value creation for securityholders.
Risk Management and Operational Resilience
Liberty Group’s comprehensive risk management framework addresses credit, liquidity, market, operational, and regulatory risks. The Group’s expected credit loss provisioning remains a key focus area, with enhancements made to modelling approaches and forward-looking macroeconomic scenario analysis. The audit by KPMG was unqualified, with particular attention given to the robustness of credit loss estimates. Operational risks including technology and cyber security are actively managed, with ongoing staff training and monitoring.
Outlook and Strategic Focus
Looking ahead, Liberty Group aims to drive profitability through continued execution of its strategy focused on customer experience, choice, and risk-adjusted returns. The Group’s diversified finance operations across Australia and New Zealand position it well to navigate evolving market conditions. Securityholders will watch closely the upcoming AGM where approval of executive incentives will be sought, alongside monitoring developments in the ongoing class action litigation involving a subsidiary.
Bottom Line?
Liberty Group’s FY25 results underscore steady growth and disciplined risk management, setting the stage for continued shareholder returns amid evolving market dynamics.
Questions in the middle?
- How will Liberty Group’s credit risk models adapt to changing macroeconomic conditions?
- What impact might the class action lawsuit have on future financial performance?
- How will executive remuneration align with long-term strategic priorities post-AGM?
