Ma Financial Group Limited · ASX:MAF
Ma Financial — 1H24 Earnings Presentation
60 slides from Ma Financial's earnings presentation, Aug 22, 2024
Slide 1: 1H24 Results Presentation
1H24 Results Presentation August 2024
Slide 2: Acknowledgement of Traditional Owners
We respectfully acknowledge the Traditional Owners of lands across Australia and pay our respects to their Elders, past, present and emerging. Our head office is located on Gadigal land.
Slide 3: Contents
Contents 1H24 Results & Highlights 5 Post balance date activity & outlook 13 Asset Management 17 Lending & Technology 26 Corporate Advisory & Equities 33 1H24 Financials 36 What we do 40 Appendices 43 3
Slide 4: Explanation of Underlying measures in this presentation
Explanation of Underlying measures in this presentation MA Financial Group Limited (MA Financial or the Company) (ACN 142 008 428) and its Differences in classification arise because the Group chooses to classify some IFRS subsidiaries (Group) utilise non-IFRS Underlying financial information in its
Slide 5: 1H24 Results & Highlights
1H24 Results & Highlights MA
Slide 6: 1H24 Result – key themes
1H24 Result – key themes Strong underlying business momentum sees business on track to achieve FY26 growth targets 1 Record first half Asset Management fund inflows – gross inflows of $1.1 billion up 16% on 1H23 2 Continued growth in recurring revenue base 3 Finsure and MA Money experiencing strong
Slide 7: Focused on medium-term growth targets
Focused on medium-term growth targets Confidence in ongoing growth derived from our history of successful strategic investment to build highly scalable businesses. Management targets for growth in major business metrics are consistent with our historic track-record Historical CAGR / FY26 target Impl
Slide 8: 1H24 Result Highlights
1H24 Result Highlights Strong growth across MA businesses. Material investment in platform, technology, and brand poised to deliver future growth $89m 11.1cps 6cps Recurring revenue1 Underlying EPS Fully Franked Interim Dividend2 7% on 1H23 27% on 1H23 in line with 1H23 $9.7b $1.1b $121b $1.4b $22m
Slide 9: 1H24 Results
1H24 Results Underlying Results1 1H24 1H23 1H24 v 1H23 Statutory Results1 1H24 1H23 1H24 v 1H23 Revenue $134.5m $128.3m 5% Revenue2 $244.5m $172.9m 41% Expenses $96.2m $82.6m 16% Expenses3 $111.3m $97.2m 15% EBITDA $38.3m $45.7m (16%) EBITDA4 $133.2m $75.7m 76% Net profit after tax $17.8m $24.4m (27
Slide 10: Material investment made in 1H24 to deliver future growth
Material investment made in 1H24 to deliver future growth 1H24 investment spend in line with expectations and guidance retained for ~$13m Underlying EBITDA impact (or EPS 6c) in FY24 Strategic Investment Type of Investment Medium term Opportunity Group Building brand awareness as we focus on expandi
Slide 11: Financial performance
Financial performance Strong revenue growth underpinned by net flows, growth in Finsure and MA Money, impacted by strategic investments Underlying revenue ($m) Underlying EBITDA ($m) 350 120 1H 2H 1H 2H 300 100 250 156 80 57 200 142 36 60 150 120 41 86 40 33 100 146 128 135 20 50 46 38 50 95 25 30 7
Slide 12: Business Unit Highlights
Business Unit Highlights Complementary business segments provide a valuable ecosystem with diversification. Asset Management EBITDA contribution1 75% EBITDA1 • Record first half inflows (gross & net) driven by strong interest in the Group’s Private Credit funds as investment fundamentals and fund pe
Slide 13: Post balance date activity & outlook
Post balance date activity & outlook
Slide 14: Key business activity since June 2024
Key business activity since 30 June 2024 Positive business momentum continuing with added impetus from announcement of new strategic institutional initiatives Asset Management • Positive momentum in AUM and client fund flows continues − $323 million of gross fund inflows (net inflows: $169 million)
Slide 15: Growth and expansion of distribution platform with Warburg Pincus
Growth and expansion of distribution platform with Warburg Pincus Broadening global distribution reach with launch of A$1 billion Real Estate Credit vehicle with Warburg Pincus (WP) 1 Establishment of Real Estate Credit vehicle providing global institutional investors 2 The vehicle has an initial fu
Slide 16: FY24 outlook commentary
FY24 outlook commentary Underlying EPS in 2H24 expected to be materially higher than 1H24 as MA Money transitions to a positive earnings run-rate and all divisions continue to demonstrate positive momentum Asset Management • Expectation for continued growth in fund inflows in 2H24 plus Real Estate C
Slide 17: Asset Management
Asset Management MA
Slide 18: MA Financial is an active manager of alternative asset classes
MA Financial is an active manager of alternative asset classes We are active managers of longer duration alternative assets, adding value with operational expertise that requires hands-on management capability. We are more than just financial managers of assets Specialists in managing and operating
Slide 19: Asset Management Performance
Asset Management Performance Underlying Financials ($M) 1H24 1H23 1H24 v 1H23 Base management fees 48.4 50.3 (4%) Credit funds income 22.3 16.9 32% Recurring revenue up underpinned by strong demand for Private Credit funds offsetting temporary fee waivers for MA Principal investments income 3.5 3.4
Slide 20: Assets Under Management
Assets Under Management AUM at $9.7 billion with a focus on alternative asset classes $9.7b $9.2b 0.5 0.4 0.6 $7.8b 0.6 $6.9b 1.9 +40% 1.9 CAGR $5.4b 2.1 $4.9b 2.3 $3.7b $2.9b 4.6 4.0 $1.1b $0.8b $0.4b FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 1H24 Credit Core Real Estate Alternative Real Es
Slide 21: 1H24 Fund Flows
1H24 Fund Flows Net flows grew 24%1 with average month exceeding $110 million. Strong growth in fund flows with Domestic flows up 52% on 1H23. Flows by Asset Class2 ($M) 1H24 1H23 Gross Net Gross Net Strong demand for Credit products, with flows up 53% Credit 994 628 651 446 Real Estate gross flows
Slide 22: Investor Flows
Investor Flows Distribution channels continue to grow and diversify Investor channel gross inflows by proportion (%) Investor channel gross inflows ($) 1,941 5% 9% 9% 1% 173 19 FY24 to 18% 16th Aug 43% 30% 1,532 33% 1,427 141 647 1,306 273 323 33% 54 2 565 20% 509 326 65% 57% 259 1,102 37% 40% 722 6
Slide 23: Asset Management client base
Asset Management client base Domestic and International Non-Migration clients increasing as a proportion of total AUM 1H23 AUM by investor channel 1H24 AUM by investor channel $1.4b $1.3b $3.0b $4.0b $8.6b $2.5b $9.7b $2.7b $1.5b $1.9b Domestic HNW & Retail International HNW (Non-Migration) Domestic
Slide 24: Focus is to be an active manager of alternative asset classes
MA Financial's focus is to be an active manager of alternative asset classes Diversity of fund strategies delivers continued AUM growth Private Credit Real Estate (Core and Alternative) AUM: $4.6 billion AUM: $4.0 billion • Strong momentum on capital raising front, supported by tailwinds in private
Slide 25: Credit Investing + Lending & Technology = Powerful driver of growth
Credit Investing + Lending & Technology = Powerful driver of growth Sourcing credit assets directly through our proprietary relationships and in-house platforms is a significant strategic advantage. Over 75% of our $4.6b in credit investment funds have been directly originated by our teams through o
Slide 26: Lending & Technology
Lending & Technology MA
Slide 27: Building a tech-enabled highly scalable Lending ecosystem
We are building a tech-enabled highly scalable Lending ecosystem Creation of a tech-enabled highly scalable lending ecosystem that generates fee-based income, spread income and investment product for our managed funds Lending Financial Technology Spread income Fees and commissions Loan book: $1.4b M
Slide 28: Lending & Technology Divisional Performance
Lending & Technology Divisional Performance Strong volume growth across Finsure and MA Money lifts revenue and positions business well for scale benefits to emerge Underlying Financials ($M) 1H24 1H23 1H24 v 1H23 Represents growth in Finsure managed loans and total brokers Financial Technology 20.7
Slide 29: Financial Technology Performance
Financial Technology Performance Finsure continues to grow quickly, continuing to add brokers to its tech-enabled platform Underlying Financials ($M) 1H24 1H23 1H24 v 1H23 Fees & commissions Reflects strong growth in managed loans and brokers on Subscription fees and trail commissions 14.5 12.2 19%
Slide 30: Finsure Platform Growth
Finsure Platform Growth Finsure continues to grow its market position with a differentiated proposition for brokers focused on value-add service innovation and technology Brokers on Platform Finsure’s Broker market share1 Managed Loans 17.7% 3,453 $121b +10% 16.3% $110b +10% 3,129 2,640 14.2% $91b 1
Slide 31: Lending Platforms Performance
Lending Platforms Performance MA Money expected to run-rate breakeven by Oct-24 with significant investment in the platform to unlock future earnings growth Underlying Financials ($M) 1H24 1H23 1H24 v 1H23 As expected, strong loan book growth offset by margin MA Money 4.8 2.5 92% compression from co
Slide 32: Loan Book Growth and Invested Capital
Loan Book Growth and Invested Capital MA Money on track to hit its growth target of $4b loan book by FY26 Loan Book growth (A$M at year end) Invested capital1 (A$M / % at year end) 1,600 $1,558m 100 MA Money MA Money 163 Specialty Finance Specialty Finance 90 1,400 % of total Loan book 80 1,200 70 $
Slide 33: Corporate Advisory & Equities
Corporate Advisory & Equities
Slide 34: Corporate Advisory & Equities Performance
Corporate Advisory & Equities Performance Solid 1H24 result given market conditions with revenue up 10% on 1H23. Pipeline remains robust with significant skew to M&A activity Underlying Financials ($M) 1H24 1H23 1H24 v 1H23 Corporate Advisory fees 22.0 19.6 12% Equities commissions 2.5 2.6 (4%) Tota
Slide 35: Revenue seasonality
Revenue seasonality Corporate Advisory revenue typically weighted to second half • Corporate Advisory & Equities revenue is typically seasonal with, on average, second half weighting of approximately 60% • Market conditions make deal execution and timing less predictable. Expectation remains for a s
Slide 36: 1H24 Financials
1H24 Financials MA
Slide 37: Group Underlying Profit and Loss
Group Underlying Profit and Loss1 Summary Underlying Profit & Loss Statement ($M) 1H24 1H23 1H24 v 1H23 Growth in recurring revenue offset by lower transaction and performance fees Asset Management 83.7 84.8 (1%) Lending & Technology 26.5 20.8 27% Reflects strong loan book growth in Finsure and MA C
Slide 38: Group Operating Balance Sheet
Group Operating Balance Sheet1 Operating Balance Sheet ($M) 30 Jun 2024 31 Dec 2023 Co-investments during the half, with assets recycled in July 24 Cash and cash equivalents 18.2 43.1 Cash balance $50m in July 24 Loans receivable 8.6 6.2 Investments 224.9 203.6 Refer to following slide for detail on
Slide 39: Group Investments
Group Investments Ability to recycle capital and maintain a dynamic investment portfolio underpins balance sheet strength Summary of Investments ($M) 30 Jun 2024 31 Dec 2023 Lending (MA Money & Specialty Invested Capital) 26.0 17.1 Co-investments 63.5 51.4 Private Credit funds 87.6 87.6 MA Redcape H
Slide 40: What we do
What we do MA
Slide 41: Our core capabilities position us well for medium term growth
Our core capabilities position us well for medium term growth Focus on building sustainable earnings growth 01. 02. 03. Builder of valuable businesses in Scalable business powered by Diversified capital sources and large addressable markets unique distribution client investor base 04. 05. 06. Strong
Slide 42: MA in the community
MA in the community • Established in 2018, the MA Foundation has three long-term community partners: GO Foundation, BackTrack, and the Mirabel Foundation. • It also supports charities and community causes that hold significant importance to our staff. To date, the Foundation has donated over $8.4 mi
Slide 43: Appendices
Appendices MA
Slide 44: Appendix — Financials
Appendix — Financials MA
Slide 45: 1H24 Financials - Statutory to Underlying Profit Reconciliation
1H24 Financials - Statutory to Underlying Profit Reconciliation Note Revenue1 EBITDA NPAT CI1 1H24 Statutory Results ($m) 244.5 133.2 13.5 12.1 Differences in measurement Business acquisition adjustments (a) - 0.6 3.1 3.1 Adjustments relating to co-investments (b) 1.8 1.8 1.8 7.3 Adjustments relatin
Slide 46: 1H23 Financials - Statutory to Underlying Profit Reconciliation
1H23 Financials - Statutory to Underlying Profit Reconciliation Note Revenue1 EBITDA NPAT CI1 1H23 Statutory Results ($m) 172.9 75.7 17.3 16.5 Differences in measurement Business acquisition adjustments (a) - 3.9 5.6 5.6 Adjustments relating to co-investments (b) - - - (0.3) Adjustments relating to
Slide 47: Notes to Statutory to Underlying Profit Reconciliation
Notes to Statutory to Underlying Profit Reconciliation Differences in Measurement and Classification e) The Underlying treatment capitalises and amortises certain operational platform and a) The Underlying treatment removes transaction costs related to business acquisitions. In software development
Slide 48: 1H24 Balance Sheet – Operating to Statutory Reconciliation
1H24 Balance Sheet – Operating to Statutory Reconciliation 30 Jun 2024 30 Jun 2024 30 Jun 2024 30 Jun 2024 Summary Consolidated Balance Sheet ($M) Operating Lending Trusts1 Reclassifications Statutory Cash and cash equivalents 18.2 144.4 - 162.6 Loans receivable 8.6 2,950.5 - 2,959.1 Investments 224
Slide 49: FY23 Balance Sheet – Operating to Statutory Reconciliation
FY23 Balance Sheet – Operating to Statutory Reconciliation 31 Dec 2023 31 Dec 2023 31 Dec 2023 31 Dec 2023 Summary Consolidated Balance Sheet ($M) Operating Lending Trusts1 Reclassifications Statutory Cash and cash equivalents 43.1 137.2 - 180.3 Loans receivable 6.2 2,082.6 - 2,088.8 Investments 203
Slide 50: Notes to Operating Balance Sheet Reconciliation
Notes to Operating Balance Sheet Reconciliation Lending Trust Adjustments Reclassifications • The Group utilises non-recourse funding vehicles (Lending Trusts) typically in the form of • The reclassification adjustments seek to present the balance sheet on a net basis rather securitisation trusts an
Slide 51: Group Underlying Profit & Loss – Divisional Summary
Group Underlying Profit & Loss – Divisional Summary Underlying Profit & Loss ($M) 1H24 1H23 Revenue Asset Management 83.7 84.8 Lending & Technology 26.5 20.8 Corporate Advisory and Equities 24.5 22.2 Corporate (0.2) 0.5 Total Revenue 134.5 128.3 Expenses Asset Management 46.0 41.9 Lending & Technolo
Slide 52: Borrowings - Operating
Borrowings - Operating Borrowings ($M) Maturity date Coupon 30 Jun 2024 31 Dec 2023 MA Bond IV Unsecured note Sep 2024 5.85% 40.0 40.0 MA Bond VI Unsecured note Sep 2027 5.75% 25.0 25.0 MACI Bond Unsecured note – limited recourse May 2024 4.35% + RBA cash rate 0.0 30.0 MAFG Finance Notes Unsecured n
Slide 53: Shares on issue
Shares on issue Summary of Shares on Issue 30 Jun 24 31 Dec 23 Total shares on issue 181,342,954 178,331,811 Less: Treasury shares 19,852,738 18,437,383 Net shares on issue 161,490,216 159,894,428 Weighted average number of shares on issue 180,052,464 177,658,634 Less: Weighted average number of tre
Slide 54: Appendix – Assets under Management
Appendix – Assets under Management
Slide 55: Core Real Estate AUM
Core Real Estate AUM Real Estate AUM of $2.1 billion following successful asset realisations $2.6b $2.5b $2.3b $2.2b $2.2b $2.1b 0.7 0.6 $1.5b $1.4b 1.6 1.5 $0.5b FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 1H24 Retail Real Estate Diversified Real Estate 55
Slide 56: Alternative Real Estate AUM
Alternative Real Estate AUM Focus remains on MA Marina Fund with opportunities for expansion in 2H24 $1.9b $1.9b $1.8b 0.3 0.3 $1.6b $1.3b $1.2b $1.2b $0.9b 1.6 1.6 $0.1b FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 1H24 Hospitality Marinas 56
Slide 57: Credit AUM
Credit AUM Credit AUM continues to grow strongly driven by growth in Real Estate Credit funds and Asset Backed Lending (including Priority Income Funds) $4.6b $4.0b 2.0 1.7 $2.5 $1.6b 2.2 $1.1b 1.9 $0.9b $0.6b $0.3b $0.4b 0.4 0.4 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 1H24 Bonds & Cash Diversified
Slide 58: Listed Equities AUM
Listed Equities AUM Equities AUM impacted by market performance cycle and subdued migration flows $0.9b $0.7b $0.6b $0.6b 0.1 0.1 $0.5b 0.1 0.1 $0.3b $0.2b 0.4 0.4 $0.1b $0.1b FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 1H24 Small Caps Funds Index & REITs All Caps Funds 58
Slide 59: PE/VC AUM
PE/VC AUM Growth credit strategy established with MA Sustainable Future Fund $0.5b $0.4b 0.1 0.1 $0.3b $0.3b $0.3b 0.2 $0.2b $0.2b 0.2 $0.2b $0.1b 0.1 0.2 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 1H24 Private Equity Venture Capital Growth Credit 59
Slide 60: Disclaimer
Disclaimer The material in this presentation has been prepared by MA Financial Group Limited ACN This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any 68 142 008 428 (MA Financial) and is general background information about MA Financial securities in the