Ma Financial Group Limited · ASX:MAF
Ma Financial — 1H21 Earnings Presentation
46 slides from Ma Financial's earnings presentation, Aug 18, 2021
Slide 1: 1H21 Results Presentation
1H21 RESULTS PRESENTATION AUGUST 2021
Slide 2: Contents
CONTENTS S EC T IO N H EADIN G P AG E N O . 01 1H21 Results & Highlights 4 02 Post Balance Date Activity & FY21 Outlook 10 03 Asset Management 14 04 Lending 20 05 Corporate Advisory & Equities 23 06 1H21 Financials 26 07 Strategic Outlook 30 08 Appendices 33 2
Slide 3: Explanation of Underlying measures in this presentation
Explanation of Underlying measures in this presentation MA Financial Group Limited (MA Financial or the Company) (ACN 142 008 Differences in classification arise because the Company chooses to classify 428) and its subsidiaries (Group) utilise non-IFRS Underlying financial some IFRS measures in a di
Slide 4: 1H21 Results & Highlights
01 1H21 Results & Highlights
Slide 5: 1H21 Results
1H21 Results Strong growth and performance across all business units. Upgrading FY21 guidance Record 1H performance with Underlying EPS up 92% on 1H20 Earnings growth Outstanding performance across a broadly based operating platform Assets Under Management (AUM) up 21% to $6.1 billion over 12 months
Slide 6: 1H21 Results
1H21 Results UNDERLYING RESULTS1 1H21 1H20 GROWTH STATUTORY RESULTS1 1H21 1H20 GROWTH Revenue $102.7m $67.4m 52% Revenue2 $100.8m $74.2m 36% EBITDA $38.2m $21.5m 78% EBITDA3 $31.8m $24.6m 30% Net profit after tax $23.4m $12.1m 93% Net profit after tax $14.3m $8.9m 60% Earnings per share 16.3¢ 8.5¢ 9
Slide 7: Financial performance
Financial performance Strong business rebound delivers record 1H performance UNDER LYING R EVENUE ($ M ) UNDER LYING EBITDA ($ M ) 160 80 1H 2H 1H 2H 120 93 60 90 80 37 80 40 38 39 71 103 29 40 68 67 20 38 56 22 27 22 36 12 0 0 FY17 FY18 FY19 FY20 1H21 FY17 FY18 FY19 FY20 1H21 UNDER LYING EAR NINGS
Slide 8: Business unit highlights
Business unit highlights Growing momentum across all business units EBITDA CONTR IBUTION BY BUS INES S DIVIS ION ASSET MANAGEMENT2 EBITDA contribution1 71% (EX. COR POR ATE) • 21% AUM growth over last 12 months $m • Net inflows of $506m over the half and a promising 2H21 pipeline 50 • Base managemen
Slide 9: 1H21 strategic outcomes
1H21 strategic outcomes Delivering on key priorities Grow recurring Base management fee run rate at the end of 1H21 was equivalent to $77m1 p.a, up from $60m at end FY20 revenue base Lending net interest income up 33% relative to 1H20 Expand & diversify Granted retail product licence and launched fi
Slide 10: Post Balance Date Activity & FY21 Outlook
02 Post Balance Date Activity & FY21 Outlook
Slide 11: Key business activity since June 2021
Key business activity since 30 June 2021 Strong start to 2H21 despite COVID-19 related interruption ASSET MANAGEMENT • Positive momentum in AUM and client fund flows continues − $185m of net fund inflows received over the first six weeks of 2H21 − Settled on ~$20m of hotel accommodation assets for M
Slide 12: Redcape Hotel Group (RDC) delisting: a pathway to realising value
Redcape Hotel Group (RDC) delisting: a pathway to realising value RDC’s independent board have put forward a proposal to delist RDC RATIONALE • To provide a more stable pricing structure for investors that more closely reflects underlying asset values • Considered the best strategic solution to impr
Slide 13: FY21 outlook
FY21 outlook Long-term investment in people and platform is delivering accelerating growth underpinned by solid foundations FY21 Underlying EPS now expected to increase between 20% and 30% on FY20. Prior expectation was for an increase of 10% to 20%. FY21 outlook has been lifted due to a number of f
Slide 14: Asset Management
OS MA Financial Group Asset Management 14
Slide 15: Asset Management Performance
Asset Management Performance UNDERLYING FINANCIALS ($M) 1H21 1H201 GROWTH Includes $2.5m of RetPro fees from April 21 Base management fees 33.6 26.3 28% Principal investments income 4.3 1.9 132% 1H20 impacted by loss of RDC distributions Total recurring revenue 37.9 28.1 35% Transaction fees 5.9 1.9
Slide 16: Assets Under Management
Assets Under Management We manage assets of $6.1 billion with a core focus on Real Estate, Hospitality and Credit plus emerging businesses in Equities and PE/VC $6.1b 6.0 0.3 $5.4b 0.7 0.3 5.0 $4.9b 0.5 1.3 1.1 4.0 $3.7b 1.5 1.3 3.0 $2.8b 2.0 2.2 2.3 $1.1b 1.0 0.0 FY16 FY17 FY18 FY19 FY20 1H21 Real
Slide 17: 1H21 Fund Flows
1H21 Fund Flows Continued fund-raising momentum with gross inflows of more than $1.1 billion over last 12 months Real Estate inflows primarily associated NET FLOWS by ASSET CLASS1 ($M) 1H21 1H20 GROWTH with MA Prime Logistics Fund & MA Diversified Property Fund Real Estate 64 9 611% Hospitality 50 2
Slide 18: Asset Management client base
Asset Management client base A continued focus on the growth and diversification of existing distribution channels AUM BY INVES TOR CHANNEL Highlights Increasingly consistent flows from Domestic channels • Retail product licence granted & retail credit products launched $1.3b • Increasing platform p
Slide 19: Highlights
Highlights Activity rebound continues notwithstanding short term lockdown impacts Credit Hospitality AUM: A$1.3 billion $210m on FY20 AUM: A$1.5 billion $165m on FY20 • AUM grew by 18% during the half, supported by strong net inflows • Strong trading prior to implementation of lockdown restrictions
Slide 20: Lending
@) A Lending MA Financial Group
Slide 21: Lending Performance
Lending Performance Proforma1 UNDERLYING FINANCIALS 1H21 1H20 GROWTH Net interest income 10.2 7.7 33% Total Underlying revenue 10.2 7.7 33% Expenses 3.8 3.1 23% Underlying EBITDA 6.4 4.6 39% Primarily due to growth in MA Priority Income Fund and the acquisition of an initial 47.5% Total Loan Portfol
Slide 22: Lending Analysis
Lending Analysis Building a scalable platform as an operator of differentiated lending platforms & funder of high quality loan portfolios LOAN POR TFOL IO GR OWTH 1 (A$ M) Highlights 450 • Lending Platforms Highlights − Specialty finance platform in Disbursement Funding continues to grow market shar
Slide 23: Corporate Advisory & Equities
05 Corporate Advisory & Equities
Slide 24: Corporate Advisory & Equities Performance
Corporate Advisory & Equities Performance UNDERLYING FINANCIALS 1H21 1H20 GROWTH Corporate Advisory fees [$m] 24.8 21.3 16% Equities commissions [$m] 3.1 5.1 -38% Total Underlying revenue [$m] 27.9 26.4 6% Expenses [$m] 21.4 21.0 2% Underlying EBITDA [$m] 6.5 5.4 20% Advisory headcount [avg. FTEs] 5
Slide 25: Revenue Seasonality
Revenue Seasonality Record 1H Underlying revenue contribution for Corporate Advisory & Equities • Corporate Advisory & Equities revenue is typically seasonal with, on average, second half weighting of approximately 60% • Seasonality didn’t arise in FY20 largely due to soft M&A activity in 2H20 and t
Slide 26: 1H21 Financials
@) 6 1H21 Financials MA Financial Group
Slide 27: Group Underlying profit or loss
Group Underlying profit or loss SUMMARY UNDERLYING PROFIT OR LOSS STATEMENT ($M)1 1H21 1H20 GROWTH Underlying Revenue Asset Management 64.6 33.4 93.6% Lending 10.2 7.7 32.6% Corporate Advisory & Equities 27.9 26.4 5.9% Total Underlying Revenue 102.7 67.4 52.4% Growth driven by improved revenue Expen
Slide 28: Group Operating Balance Sheet
Group Operating Balance Sheet1 OPERATING BALANCE SHEET ($M) 30 JUN 2021 31 DEC 2020 Cash and cash equivalents 68.3 112.2 Refer to detail on page 29 Loans receivable 88.7 63.2 Investments 154.5 136.8 Goodwill and other intangibles 34.9 30.9 Includes fee receivables, restricted cash and plant and equi
Slide 29: Group Investments
Group Investments SUMMARY OF INVESTMENTS ($M) 30 JUN 2021 31 DEC 2020 Cash 68.3 112.2 Lending and other credit investments 106.8 81.5 Redcape Hotel Group (ASX:RDC) 70.4 58.2 Co-investment in managed funds 45.2 48.3 Japara Healthcare Limited (ASX:JHC) 19.2 9.3 Other equity investments 1.7 2.7 Total 3
Slide 30: Strategic Outlook
O7 MA Financi ial Group Strategic Outlook 30
Slide 31: Leveraging deep expertise to scale business verticals
Leveraging deep expertise to scale business verticals Our strategy is to develop deep financial and operational expertise in the businesses we choose to scale The value of time and investment in capability delivers strong investment performance and AUM growth over time COM POUND ANNUAL GR OWTH IN KE
Slide 32: Well positioned for medium term growth
Well positioned for medium term growth Focus on building sustainable earnings growth 01. 02. 03. Builder of valuable Scalable asset Diversified capital businesses in large management business sources and client addressable markets powered by unique investor base distribution 04. 05. 06. Strong balan
Slide 33: Appendices
O 8 Appendices MA Financial Group
Slide 34: Appendix Financials
Appendix Financials MA Financial Group
Slide 35: 1H21 Financials - Statutory to Underlying Profit Reconciliation
1H21 Financials - Statutory to Underlying Profit Reconciliation NOTE REVENUE1 EBITDA NPAT CI1 1H21 Statutory Results ($m) 100.8 31.8 14.3 24.6 Differences in measurement Business acquisition adjustments (a) - 2.1 4.3 4.3 Equity issued to staff (b) - (0.6) (0.6) (0.6) Net unrealised (gains)/losses on
Slide 36: 1H20 Financials - Statutory to Underlying Results Reconciliation
1H20 Financials – Statutory to Underlying Results Reconciliation NOTE REVENUE1 EBITDA NPAT CI1 1H20 Statutory Results ($m) 74.2 24.6 8.9 1.8 Differences in measurement Business acquisition adjustments (a) - 0.7 1.6 1.6 Equity issued to staff (b) - 0.5 0.5 0.5 Net unrealised (gains)/losses on investm
Slide 37: Notes to Statutory to Underlying Profit Reconciliation
Notes to Statutory to Underlying Profit Reconciliation Differences in Measurement Differences in Classification a) The acquisition of Armada Funds Management in 2017 and RetPro on 1 April f) The Underlying treatment records the distributions received from the MA 2021 for cash and shares gives rise t
Slide 38: Group Consolidated Balance Sheet – Statutory
Group Consolidated Balance Sheet – Statutory 30 Jun 2021 30 Jun 2021 30 Jun 2021 31 Dec 2020 31 Dec 2020 31 Dec 2020 Summary consolidated balance sheet ($m) Operating MCT Statutory Operating MCT Statutory Cash and cash equivalents 68.3 38.7 106.9 112.2 25.8 138.0 Loans receivable 88.7 176.61 265.3 6
Slide 39: Group Underlying Profit & Loss – Divisional Summary
Group Underlying Profit & Loss – Divisional Summary UNDERLYING PROFIT & LOSS 1H21 1H201 Revenue (A$m) Asset Management 64.6 33.4 Lending 10.2 7.7 Corporate Advisory and Equities 27.9 26.4 Total Revenue 102.7 67.4 Expenses (A$m) Asset Management 33.0 18.9 Lending 3.8 1.5 Corporate Advisory and Equiti
Slide 40: Borrowings
Borrowings BORROWINGS ($M) MATURITY DATE COUPON 30 JUN 2021 31 DEC 2020 MA Bond II Unsecured note 14 Sep 2022 5.85% 25.0 25.0 MA Bond III Unsecured note – limited recourse 16 May 2024 4.35% + RBA 30.0 30.0 MA Bond IV Unsecured note 30 Sep 2024 5.75% 40.0 40.0 Total Borrowings 95.0 95.0 Average Borro
Slide 41: Appendix AUM by sector and fund
Appendix AUM by sector and fund 41
Slide 42: Hospitality AUM Growth
Hospitality AUM Growth AUM growth driven by MA Taylor Square Fund, RDC hotel acquisitions and positive revaluation MA Taylor Square Fund and settlement of 4 RDC hotels acquired in 4Q20 added $165m of AUM during 1H21 96% CAGR (FY16 - 1H21) $1.5b 0.1 $1.3b 0.1 $1.2b $1.2b 0.1 Acquisition of Redcape Ho
Slide 43: Real Estate AUM Growth
Real Estate AUM Growth Growth in Diversified Real Estate increases Real Estate AUM to $2.3 billion MA Diversified Property Fund grown AUM to over $50m since launch in April 21 39% CAGR (FY16 – 1H21) $2.3b $0.7b acquisition of Marion $2.2b $2.2b via MA Financial Group managed vehicle, fully 0.4 0.5 c
Slide 44: Credit AUM Growth
Credit AUM Growth Credit AUM continues to grow strongly driven by growth in Real Estate Credit funds and Priority Income Funds Significant Domestic and Foreign HNW client interest in Real Estate Credit funds 39% CAGR (FY16 – 1H21) $1,335m 102 $1,125m 240 90 $915m 195 480 320 $580m $340m $300m 520 51
Slide 45: Listed Equities and PE/VC AUM Growth
Listed Equities and PE/VC AUM Growth Equities AUM up 47% on FY20 driven by strong client inflows and positive performance 60% CAGR (FY16 – 1H21) $990m 295 $755m 285 $540m $420m $295m 695 470 $120m FY16 FY17 FY18 FY19 FY20 1H21 Listed Equities PE / VC 45
Slide 46: Disclaimer
Disclaimer The material in this presentation has been prepared by MA Financial Group ACN 68 This presentation does not constitute an offer to sell, or a solicitation of an offer to 142 008 428 (MA Financial) and is general background information about MA buy, any securities in the United States. Any