MA Financial has delivered generally positive results for the first half of 2023, highlighted by ongoing growth in Finsure and accelerating loan volume growth for MA Money.
However, the ASX-listed financial services group’s overall financial results were less optimistic with the challenging macro environment leading to lower transactional activity, which impacted performance fees and corporate revenue.
Joint CEOs Chris Wyke (pictured above left) and Julian Biggins (pictured above right) said they were “very pleased” with the underlying momentum in the business which positioned MA Financial for “strong future growth”.
“The composition of our earnings improved significantly with growth in recurring revenue and expense management largely offsetting the decline in performance fees,” Wyke and Biggins said in a joint statement.
“Despite the challenging economic backdrop, we continue to see the benefits of our diversified business model, and our intentional strategy to build a business that can deliver for investors through the economic cycle.”
MA Financial’s financial technology division, headed by mortgage broker aggregator Finsure and the emerging fintech tool Middle, continued to be the focus of significant investment, growing its underlying revenue by 27%.
Finsure was the main driver of this growth, delivering record settlements of $3.8 billion in July and growing its managed loan portfolio to $99bn up 18% on the first half of last year.
Finsure also increased the number of brokers on its platform to 2,846, adding more than 200 brokers in the first half of the year as it continues to gain market share.
This helped offset the expense of investing in Middle, which is expected to become revenue generating in the last quarter of this year.
It was even better for MA Financial’s lending platforms division.
Comprised of residential mortgage lender MA Money and high-margin specialist lender Specialty Finance, the Group’s lending division grew its total loan book by 59% to $564 million.
MA Money’s loan book was up 85% due monthly loan settlements accelerating after the launch of its new products earlier in the year.
Over the six months to the end of June, MA Money’s lodgements have grown by more than 500%, which according to Wyke, “highlights the positive response to MA Money’s product offering from brokers”.
However, the investment in this space came as a drag overall, leading to a $1.6m EBITDA loss in the half-year results.
The loss is expected to increase over the rest of the year as it continues to scale and position itself to take advantage of the “substantial opportunity for long-term growth” in the residential mortgage market.
As a result, MA Money is expecting to break even by the second half of next year, and with competitive pressure expected to subside, the Group expects to deliver up to $20m in net profit after tax by FY26.
“The expansion and success of our private credit business is very pleasing. MA Financial’s credit funds are among Australia’s fastest growing,” Wyke and Biggins said.
“Advisors and investors continue to value our expertise in originating and managing credit assets, highlighted by the 74% growth in the assets under management of our private credit funds over the last 12 months. We believe private credit investing will continue to benefit from demographic and structural growth drivers for many years.”
