MA Financial (ASX:MAF) share price surges 10% on record first half results

A strong 6-month performance has sent shares in financial services group rocketing.

| More on:
happy business people celebrate, share rise, record price, increase

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The MA Financial Group Ltd (ASX: MAF) share price is soaring today after the company released its results for the first half of 2021 and updated its guidance.

Right now, the MA Financial share price is $6.12, 10.67% higher than it was at yesterday's close.

MA Financial share price gains on maiden interim dividend

Here's how MA Financial performed over the 6 months ended 30 June 2021:

  • Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) of $38.2 million – 119% increase on that of the prior corresponding period
  • 52% increase to underlying revenue, reaching $102.7 million
  • $506 million of net fund inflows, up from $158 in the first half of FY20
  • Underlying earnings per share increased 92% to 16.3 cents
  • Maiden interim dividend of 5 cents per share

According to MA Financial, the first half of 2021 saw the company growing at record pace.

It saw its loan portfolio grow 160% over the 6 months, while 71% of MA Financial's underlying EBITDA came from its Asset Management division.

At the end of the period, MA Financial had $68 million of cash in the bank.

What's MA Financial been up to in the first half?

Over the first half of 2021, MA Financial has undergone acquisitions and launched a new credit fund.

In April, the company acquired retail shopping centre manager RetPro.

MA Financial also launched its first credit fund for retail investors during the first half after the Australian Securities and Investments Commission granted the necessary licence.

Over the 6 months, the company's transaction-based revenue increased 123% to $18.5 million as activity normalised after COVID-19. Additionally, performance fees were helped along by the strong performance of the company's hospitality assets and equities strategies.

MA Financial's holding in Redcape Hotel Group (ASX: RDC) also boosted its bottom line as Redcape saw a $7.6 million valuation uplift. MA Financial Group, and its associated funds and executives, own more than 44% of Redcape.

What did management say?

MA Financial Group's joint CEOs Julian Biggins and Chris Wyke commented on the news driving the company's share price today:

The benefits of our long-term investment across the operating platform continues to deliver outstanding results. In particular, the strong and growing inflows into our Asset Management funds are a result of many years of investment in our distribution platform and investment strategies.

Our Corporate Advisory & Equities business has benefited from an improving transaction environment and its pipeline continues to build…

We are very excited in the potential of our Lending platform. The increasing scale and ambition of our activities in this space has led to the creation of a new operating division.

What's next for MA Financial

The MA Financial Group share price will likely continue lifting if the company's outlook eventuates.

It believes its FY21 underlying earnings per share will increase to between 20% and 30% more than they were in FY20. That's up from its previous expected growth rate of between 10% and 20%.

The company's increased expectations are due to increasing certainty in the business' positive momentum, including the impacts of lockdowns as well as growth from recent acquisitions and expected fund inflows.

Additionally, the company has announced it is supporting Redcape's plan to delist from the ASX.

MA Financial Group share price snapshot

Including today's gains, the MA Financial share price has gained 33% since the start of 2021. It is also currently 85% higher than it was this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Financial Shares

woman talking on the phone and giving financial advice whilst analysing the stock market on the computer with a pen
Financial Shares

Why this ASX All Ords stock surged yesterday

Investors sent this ASX All Ords stock flying higher. But why?

Read more »

Young woman thinking with laptop open.
Financial Shares

Does Macquarie tip more upside for Suncorp or IAG shares?

Macquarie analysed the outlook for both Suncorp and IAG shares in the year ahead.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Financial Shares

Why this $2 billion ASX 200 stock looks undervalued today

A leading expert believes this ASX 200 company is poised to ‘unlock some decent value’.

Read more »

A woman smiles at the outlook she sees through binoculars.
Financial Shares

Here's the earnings forecast out to 2030 for Macquarie shares

What’s expected of investment bank Macquarie?

Read more »

Woman and man calculating a dividend yield.
Financial Shares

Why did Macquarie just downgrade IAG shares to neutral?

The IAG share price is down this morning.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Mergers & Acquisitions

IAG share price lifts off on strategic alliance approval

IAG shares are racing higher in Thursday’s sinking market.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Financial Shares

Want a financial stock outside the big 4 banks? Macquarie tips 15% upside for this small cap financial

For those searching on the edges, this name could be worth a second look according to Macquarie.

Read more »

A man looking at his laptop and thinking.
Financial Shares

Are IAG shares a buy, hold, or sell following the RAC WA deal?

How does Goldman Sachs rate IAG shares after the $1.35B deal with The Royal Automobile Club?

Read more »