Australian Finance Group Ltd. · ASX:AFG
Australian Finance — FY2016 Earnings Presentation
34 slides from Australian Finance's earnings presentation, Aug 26, 2016
Slide 1: 2016 Full-Year Results
For personal use only 2016 Full-Year Results August 2016
Slide 2: FY16 Financial Results – Highlights
FY16 Financial Results – Highlights For personal use only Strong Delivery of FY16 Prospectus Forecasts FY16 NPAT – $22.6 million – up 15.1% on Prospectus Forecast and marginally higher than the April 2016 market guidance range of $22.0 – $22.5 million FY16 Residential settlements – $33.8 billion
Slide 3: FY16 Prospectus Forecast Tracking
FY16 Prospectus Forecast Tracking For personal use only Strong performance against full year 2016 Prospectus forecasts. Comfortably exceeded Prospectus forecasts. FY16 FY16 IPO Pro Forma $000’s $000’s NPAT 22,644 19,675 15% Residential Loan Book 114,737,484 Commercial Loan Book 5,665,214 Total Loan
Slide 4: Settlements Year on Year Comparison
Settlements Year on Year Comparison For personal use only FY16 delivered growth in both residential and commercial settlements with year on year growth every year for the last five years Residential Settlements Commercial Settlements $40 $3.0 Billions Billions $35 $2.5 $30 $2.0 $25 $20 $1.5 2.76 33.
Slide 5: Settlements FY14 - FY16 State Comparison
Settlements FY14 - FY16 State Comparison For personal use only Continued 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 $14 $1.2 Billions Billi
Slide 6: Residential Portfolio June 2016
Residential Portfolio June 2016 For personal use only The Residential portfolio again grew in all geographical markets, residential loan book of $114.7 billion generating ongoing trail commission. Residential Portfolio by state Residential Loan Book Location $35 Billions $30 $25 WA 21% NSW $20 28% $
Slide 7: Australian Residential Mortgage Market
Australian Residential Mortgage Market For personal use only The Australian residential mortgage market has demonstrated consistently strong growth with CAGR of 5.9% in total loans outstanding since 2010, over the same period AFGs residential loan book has a CAGR of 11.3%. 40 1,800 35 1,600 Total mo
Slide 8: Commercial Portfolio June 2016
Commercial Portfolio June 2016 For personal use only Growth in all geographical markets, commercial loan book of $5.7 billion generating ongoing trail commission. Commercial Portfolio by state Commercial Loan Book Location $3 Billions $2 WA NSW 18% 21% $2 $1 QLD $1 VIC 22% 34% SA - 4% NSW QLD SA VIC
Slide 9: Distribution Network
Distribution Network For personal use only Consistent growth in broker numbers nationally with good geographic diversity Broker Numbers Broker Location 900 800 700 WA 600 NSW 19% 25% 500 400 300 VIC 200 QLD 29% 21% 100 SA - 4% NSW QLD SA VIC WA FY14 FY15 FY16 9
Slide 10: AFG Home Loans
AFG Home Loans For personal use only Consistent growth in our distribution network together with delivery on cross sell strategy has generated excellent AFG Home Loans results. Settlements up 99% to $1.94 billion across all AFG Home Loans branded products AFGHL Edge AFGHL Edge Settlements - $1.33
Slide 11: AFG Home Loans: Strong growth in higher margin business
AFG Home Loans For personal use only Strong growth in higher margin business FY 2016 FY 2016 Prospectus $000’s $000’s Total AFGHL Revenue 68,327 60,888 AFGHL Profit Before Tax 6,564 3,073 Profit before tax result exceeds Prospectus forecast by 114% and is assisted by the following; Improved margin
Slide 12: Financials
For personal use only Financials
Slide 13: 2016 Results - Actual
2016 Results - Actual For personal use only Increased profit underpinned by increased sales of AFG branded products, increased commercial and residential settlements, improved securitisation margins and other income FY16 FY15 $000’s $000’s Statutory NPAT 22,644 20,374 11% Represented by Continuing 2
Slide 14: 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% FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 14
Slide 15: Other Income
Other Income For personal use only Relates to fees for services provided to brokers, sponsorship and incentive income Other Income $18 Millions $16 20% growth in service fees to $5.3m in FY16 $14 reflects the ongoing value of the AFG brand $12 and technology proposition to brokers $10 Sponsorshi
Slide 16: Summary Cash Flow
Points to note: Summary Cash Flow 1. Includes restricted cash of $44.7 million For personal use only (FY15: $35.0 million) Strong operating cash flow delivers solid balance sheet The increase in cash flows generated June 2016 June 2015 from operating activities since 30 June $000’s $000’s Cash flows
Slide 17: Summary Balance Sheet
Summary Balance Sheet For personal use only June 2016 June 2015 $000’s $000’s Points to note: Assets 1. Cash and liquidity levels remain within Cash1 130,665 90,776 650,108 594,667 desired ranges. Includes restricted cash of Receivables2 Loans and advances3 1,046,412 1,025,344 $44.7 million (FY15: $
Slide 18: Strategic & Market Outlook
For personal use only Strategic & Market Outlook
Slide 19: Strategic & Market Outlook
Strategic & Market Outlook For personal use only Combination of market share, recruitment, new AFG branded products, cross sell opportunities and record low interest rates continue to leave us optimistic about the sector Broker market penetration of the Australian mortgage market – now more than 5
Slide 20: AFG's Growth Strategy
AFG’s Growth Strategy 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 2015 t
Slide 21: Powerful National Distribution Network
Powerful National Distribution Network A proven ability to cross sell additional products through our broker network will drive growth and For personal use only diversification. Increasing market share in the commercial sector is a significant opportunity. Broker numbers writing Commercial 800 700 M
Slide 22: Launching Biz2Credit
Launching Biz2Credit For personal use only Partnership with Biz2Credit to utilise innovative SME lending platform along with established Broker network to service the SME lending market In August 2016 announced our exclusive agreement with Biz2Credit The innovative SME lending platform will assi
Slide 23: Investor Loans
Investor Loans For personal use only APRA actions to reduce residential investor activity impact has stabilised near long term average Investor Loans % past 12 months Investor Loans % per State 50% 50% 45% 45% 40% 40% 35% 35% 30% 30% 25% 25% 20% 20% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Jun-15 Sep-15 D
Slide 24: Lending Activity
Lending Activity For personal use only Non-Majors maintaining market share across the financial year, average loan size steady and continues to be influenced by NSW Major v Non-Major National Average Loan Size 100% $600 Thousands $500 80% $400 60% $300 40% $200 20% $100 - - Jun-15 Sep-15 Dec-15 Mar-
Slide 25: July Trading
July Trading For personal use only Consistent start to FY17 Residential Lodgements Comparison of July Lodgments Total Residential Lodgements were $4.7 billion in Change on July 2015 July 2016 NSW (5%) Victoria and Queensland continue their strong QLD 7% lodgement growth, partially offset by cont
Slide 26: In conclusion
In conclusion For personal use only Strong first full year as a listed company in 2016 with outperformance of Prospectus forecast results and a positive outlook for the future Comfortably exceeded Prospectus forecasts and positive outlook for FY2017 Full year dividend yield of approximately 8.4%
Slide 27: Thank you Q&A
For personal use only Thank you Q&A
Slide 28: Appendices
For personal use only Appendices
Slide 29: Balance Sheet
Balance Sheet For personal use only June 2016 June 2015 June 2016 June 2015 $000’s $000’s $000’s $000’s Assets Liabilities Cash and cash equivalents 130,665 90,776 Interest-bearing liabilities 1,072,215 1,041,099 Trade and other receivables 650,059 593,931 Trade and other payables 646,113 580,341 Cu
Slide 30: Consolidated Income Statement
Consolidated Income Statement For personal use only June 2016 June 2015 June 2016 June 2015 $'000’s $'000’s $'000’s $'000’s Continuing Operations Commission and other income 482,331 462,820 Profit attributable to: Securitisation interest income 46,597 48,534 Equity holders of the Company 22,667 20,3
Slide 31: Cash Flows
Cash Flows June 2016 June 2015 For personal use only $000’s $000’s Cash flows from operating activities Cash receipts from customers 440,571 399,849 Cash paid to suppliers and employees (410,148) (397,454) Repayments of customer borrowings 23,414 34,025 (Repayments of)/Proceeds from securitisation (
Slide 32: Impact of Securitisation SPVs Balance Sheet
Impact of Securitisation SPVs Balance Sheet For personal use only The proforma balance sheet below shows Group’s balance sheet with the ‘non-recourse’ special purpose vehicles (SPVs) relating to the securitisation business and the balance of the Group separately. AFG SPVs AFG excl SPVs Re- AFG Limit
Slide 33: Impact of Trail Book Accounting
Impact of Trail Book Accounting For personal use only June 2016 June 2015 $000’s $000’s Operating Profit Operating Profit Statutory income After Tax income After Tax Underlying results from continuing operations 472,602 22,466 432,417 12,058 Change in the present value of trailing commission 56,326
Slide 34: Important Disclaimer
Important Disclaimer For personal use only This presentation contains general information which is current as at 26 August 2016. The information is intended to be a summary of Australian Finance Group Limited (AFG) and it its activities as at 30 June 2016, and does not purport to be complete in any
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