Resimac Group FY24 Trading Update - 2 August 2024
RESIMAC GROUP LTD (RMC) Share Update August 2024 Thursday 1st
Resimac Group Reports FY24 Trading Update with Increased Settlements
Resimac Group Limited (ASX:RMC) has released its unaudited trading update for FY24, showcasing substantial growth in settlements and assets under management.
Instant Summary:
- Total settlements for FY24 reached $5.1 billion, up from $4.2 billion in FY23.
- Home Loan settlements increased to $4.3 billion from $3.7 billion in FY23.
- Asset Finance settlements grew to $0.8 billion from $0.5 billion in FY23.
- Assets Under Management (AUM) closed at $14.0 billion, up from $13.8 billion in FY23.
- Provisions for doubtful debts increased, with collective provision coverage rising to 84 basis points for the Asset Finance book.
- FY24 NPAT reduction was within the expected range due to competition and NIM compression.
FY24 Trading Performance
Resimac Group Limited has reported a strong performance for FY24, with total settlements reaching $5.1 billion, a notable increase from $4.2 billion in FY23. This growth was driven by significant increases in both Home Loan and Asset Finance settlements.
Home Loan settlements rose to $4.3 billion from $3.7 billion in FY23, while Asset Finance settlements increased to $0.8 billion from $0.5 billion in the previous year. This growth in settlements reflects the company's robust market position and effective strategies.
Assets Under Management
As of 30 June 2024, Resimac's Assets Under Management (AUM) stood at $14.0 billion, up from $13.8 billion in FY23. The Home Loans segment accounted for $12.9 billion of the AUM, while Asset Finance contributed $1.1 billion.
The average Home Loans AUM for FY24 was $12.6 billion, which is 13% lower compared to the prior year due to intense competition. However, the company experienced growth for eight consecutive months in 2H24, indicating a positive trend moving into FY25.
Credit Quality and Provisions
Resimac reported that arrears and hardships remain relatively low across all product segments, reflecting the underlying credit quality of its portfolio. However, the provisions for doubtful debts increased in FY24, with collective provision coverage rising to 84 basis points for the Asset Finance book to align with loss expectations.
Net Profit After Tax (NPAT)
The company noted a reduction in FY24 NPAT compared to the prior year, which was within the expected range. This reduction was driven by the decrease in average Home Loans AUM and net interest margin (NIM) compression due to competition. The unaudited normalised NPAT for FY24 is expected to be in the range of $42 million to $44 million.
Further details will be provided in the investor release and call scheduled for 29 August 2024.
The increase in settlements and AUM demonstrates Resimac's strong market position and effective growth strategies. However, the rise in provisions for doubtful debts and the reduction in NPAT due to competition and NIM compression may impact investor sentiment. Overall, the positive growth in settlements and AUM is likely to be viewed favorably by the market.
Investor Reaction:
Analysts are likely to view the increase in settlements and AUM positively, as it indicates strong performance and growth potential. However, the rise in provisions for doubtful debts and the reduction in NPAT may raise some concerns. Investors will be keen to hear more details in the upcoming investor call.
Conclusion:
Investors should monitor the upcoming investor release and call on 29 August 2024 for more detailed insights into Resimac's performance and future outlook. The company's ability to maintain growth momentum and manage competition will be crucial for sustaining investor confidence.