Australian Finance Group Ltd. · ASX:AFG
Australian Finance — H1 FY2016 Earnings Presentation
31 slides from Australian Finance's earnings presentation, Feb 26, 2016
Slide 1: 2016 Half-Year Results
For personal use only 2016 Half-Year Results 26 February 2016
Slide 2: 2016 Half-Year Financial Results – Highlights
2016 Half-Year Financial Results – Highlights For personal use only Progressing well on delivery of FY16 Prospectus forecasts H1 FY16 NPAT – $11.7 million – up 27% against H1 FY15 results from continuing operations H1 FY16 Residential settlements – $17.7 billion – up 16% on H1 FY15, 52% of FY16
Slide 3: FY16 Prospectus Forecast Tracking
FY16 Prospectus Forecast Tracking For personal use only Strong progress against full year 2016 Prospectus forecasts. On track to comfortably meet Prospectus forecasts. HY2016 FY2016 IPO Pro Forma % Achieved On Target $000’s $000’s NPAT 11,713 19,675 59.5% Residential Loan Book 109,203,587 Commercial
Slide 4: Settlements Half Year Comparison
Settlements Half Year Comparison For personal use only Consistent growth in both residential and commercial settlements over five years Residential Settlements Commercial Settlements $20 $1.6 Billions Billions $18 $1.4 $16 $1.2 $14 $1.0 $12 $10 $0.8 $8 $0.6 $6 $0.4 $4 $0.2 $2 $0 $0.0 Dec-2011 Dec-20
Slide 5: Settlements HY14 - HY16 State Comparison
Settlements HY14 - HY16 State Comparison For personal use only Strong growth in both Residential and Commercial Settlements, particularly in New South Wales and Victoria – the country’s biggest markets Residential Settlements by State Commercial Settlements by State $7 $600 Millions Billions $6 $500
Slide 6: Residential Portfolio December 2015
Residential Portfolio December 2015 For personal use only Growth in all geographical markets, residential loan book of $109.2 billion generating ongoing trail commission. Residential Portfolio Residential Loan Book Location $35 Billions $30 $25 WA 21% NSW $20 27% $15 VIC $10 22% QLD 24% $5 SA 6% $0
Slide 7: Commercial Portfolio December 2015
Commercial Portfolio December 2015 For personal use only Growth in all geographical markets, commercial loan book of $5.3 billion generating ongoing trail commission. Commercial Portfolio Commercial Loan Book Location $2.0 Billions $1.8 $1.6 $1.4 WA NSW 19% 20% $1.2 $1.0 $0.8 QLD $0.6 VIC 23% $0.4 3
Slide 8: Broker Numbers
Broker Numbers For personal use only Consistent growth in broker numbers nationally with good geographic diversity Broker Numbers Broker Location 800 700 600 WA NSW 500 20% 25% 400 300 VIC QLD 200 28% 21% 100 SA 6% 0 NSW QLD SA VIC WA Dec-2014 Jun-2015 Dec-2015 8
Slide 9: AFG Home Loans
AFG Home Loans For personal use only AFGHL Edge AFGHL Edge Settlements - $673 million half-year to date up from $460 million in FY15 Momentum set in FY15 being maintained albeit a slower start to the new financial year AFGHL ICON Newly branded white label launched in October 2015 providing alt
Slide 10: AFG Home Loans: Strong growth in higher margin business
AFG Home Loans For personal use only Strong growth in higher margin business HY 2016 FY 2016 Prospectus $000’s $000’s Total AFGHL Revenue 33,351 60,888 AFGHL Profit Before Tax 2,419 3,073 Result reflects 79% profit before tax of full year forecast per Prospectus and is assisted by the following; I
Slide 11: Financials
For personal use only Financials
Slide 12: 2016 HY Results - Actual
2016 HY Results - Actual For personal use only Increased profit underpinned by increased sales of AFG branded products, increased settlements, improved securitisation margins and other income Dec 2015 Dec 2014 $000’s $000’s Statutory NPAT 11,713 9,809 19% Represented by Continuing Operations 11,713
Slide 13: Payout Ratios – Upfront and Trail
Payout Ratios – Upfront and Trail For personal use only Payout ratios in line with Prospectus forecasts Upfront Payout Ratio Trail Payout Ratio 100% 100% 95% 95% 90% 90% 85% 85% 80% 80% 75% 75% 70% 70% Jun-2012 Jun-2013 Jun-2014 Jun-2015 Dec-2015 Jun-2012 Jun-2013 Jun-2014 Jun-2015 Dec-2015 13
Slide 14: Other Income
Other Income For personal use only Relates to fees for services provided to brokers, sponsorship and incentive income Other Income $10 Millions $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 Dec-2011 Dec-2012 Dec-2013 Dec-2014 Dec-2015 Sponsorship and incentive income received in HY16 was $4.8m up 60% from $3.0m i
Slide 15: Summary Cash Flow
Summary Cash Flow For personal use only Strong operating cash flow delivers solid balance sheet Dec 2015 Dec 2014 $000’s $000’s Points to note: Cash flows from operating activities 1. Includes restricted cash totaling $38.7 Cash receipts from customers 221,316 193,029 million Cash paid to suppliers
Slide 16: Summary Balance Sheet
Summary Balance Sheet For personal use only Dec 2015 Dec 2014 $000’s $000’s Points to note: Assets Cash1 113,309 84,463 1. Cash and liquidity levels remain within Receivables2 634,606 556,804 desired ranges. Includes restricted cash of Loans and advances3 1,039,940 1,040,842 $38.7 million Property,
Slide 17: Strategic & Market Outlook
For personal use only Strategic & Market Outlook
Slide 18: Strategic & Market Outlook
Strategic & Market Outlook For personal use only Combination of market share, recruitment, new AFG branded products and record low interest rates continue to leave us optimistic about the sector Broker market penetration of the Australian mortgage market – now more than 52% Brokers still preferr
Slide 19: AFG’s growth strategy
AFG’s growth strategy For personal use only Growth focused on protecting and growing share of core mortgage broking market, increasing penetration of own branded product and leveraging our technology investment to pursue other opportunities. 19
Slide 20: AFG’s growth strategy (cont)
AFG’s growth strategy (cont) For personal use only • Continue to expand broker network and distribution reach through active recruitment program • Investment in technology platforms to maintain best in class technology and attract high calibre brokers • Residential loan book up from $102b at 30 June
Slide 21: Investor Loans
Investor Loans For personal use only APRA actions to reduce residential investor activity impact has stabilised Investor Loans % past 12 months Investor Loans % per State 55% 55% 50% 50% 45% 45% 40% 40% 35% 35% 30% 30% 25% 25% 20% 20% Jan-2015 Apr-2015 Jul-2015 Oct-2015 Jan-2016 Jan-2015 Apr-2015 Ju
Slide 22: Lending Activity
Lending Activity For personal use only Non-Majors maintaining market share, average loan size influenced by NSW Major v Non-Major National Average Loan Size 100% $550 Thousands 90% $500 80% $450 70% $400 $350 60% $300 50% $250 40% $200 30% $150 20% $100 10% $50 0% $0 Jan-2015 Apr-2015 Jul-2015 Oct-2
Slide 23: January Trading
January Trading For personal use only Strong start to H2 2016 Breakdown of January Lodgments Change on January 2015 NSW 22% Total Residential Lodgements were $3.0 billion On a like for like basis lodgements were up 9% QLD (2%) on January 2015 SA 12% New South Wales and Victoria continue to per
Slide 24: In conclusion
In conclusion For personal use only Strong first half 2016 results and positive outlook The Group is in a good position following significant growth across key KPIs An AFG record loan book at 31 December 2015 of $114.5 billion provides future cash flows, approximately 80% of which flow from A gr
Slide 25: Thank you Q&A
For personal use only Thank you Q&A
Slide 26: Appendices
For personal use only Appendices
Slide 27: Balance Sheet
Balance Sheet For personal use only Dec 2015 June 2015 Dec 2015 June 2015 $000’s $000’s $000’s $000’s Assets Liabilities Cash and cash equivalents 113,309 90,776 Interest-bearing liabilities 1,058,806 1,041,099 Trade and other receivables 634,533 593,931 Trade and other payables 629,287 580,341 Curr
Slide 28: Consolidated Income Statement
Consolidated Income Statement For personal use only Dec 2015 Dec 2014 Dec 2015 Dec 2014 $'000’s $'000’s $'000’s $'000’s Continuing Operations Commission and other income 258,380 227,797 Other comprehensive income for the Securitisation interest income 23,056 24,735 period, net of income tax 24 - Tot
Slide 29: Cash Flows
Cash Flows For personal use only Dec 2015 Dec 2014 $000’s $000’s Cash flows from operating activities Cash receipts from customers 221,316 193,029 Cash paid to suppliers and employees (204,440) (190,401) (Advances)/repayments of customer borrowings 7,727 9,694 Proceeds from securitisation 920 1,803
Slide 30: Impact of Trail Book Accounting
Impact of Trail Book Accounting For personal use only Dec 2015 Dec 2014 $000’s $000’s Operating Profit Operating Profit Statutory income After Tax income After Tax Underlying results from continuing 238,988 11,236 211,980 8,110 operations Change in the present value of trailing 42,448 477 40,552 1,1
Slide 31: Important Disclaimer
Important Disclaimer For personal use only This presentation contains general information which is current as at 26 February 2016. The information is intended to be a summary of Australian Finance Group Limited (AFG) and it its activities as at 31 December 2015, and does not purport to be complete i
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