The Resimac Group Ltd (ASX: RMC) share price could be set to surge this morning after the Aussie mortgage lender upgraded its FY2019 earnings guidance late yesterday afternoon.
What does Resimac do?
Resimac is a non-bank residential mortgage lender and multi-channel distribution business, which operates under a fully integrated business model comprising origination, servicing and funding of prime and non-conforming residential mortgages in Australia and New Zealand.
The company operates across Australia, New Zealand, and the Philippines and has issued more than $28 billion in bonds across 47 transactions in global fixed income markets through its significant securitisation program.
What were the highlights from Resimac's update?
Resimac reported FY19 normalised net profit after tax (NPAT) guidance in the range of $30 million to $32 million, which management said is reflective of continued strong assets under management (AUM) growth for the group.
According to the release, FY19 statutory NPAT guidance is in the range of $43 million to $46 million with the difference between FY19 statutory NPAT and normalised NPAT explained by a number of one-off items including gain on disposal of Resimac's Paywise subsidiary and the gain on derecognition of its investment in Finsure.
Resimac also reported that, in keeping with its ASX announcement on 27 May 2019, projected taxable gain on the disposal of Paywise is expected to be in the range of $7.5 million to $8.5 million.
Management said Q4 loan settlements increased materially compared to Q2 2019 and Q3 2019, which serves to provide strong momentum for the group heading into FY20.
FY19 total settlements were estimated to be $3.8 billion for the Aussie mortgage lender.
Resimac reported that principally funded AUM at 30 June 2019 was estimated to be $10.2 billion, approximately 20% higher than the company's June 2019 AUM figures.
It's worth noting that all of the figures reported by Resimac in the release are based on unaudited numbers, with the company set to report its full-year results in August.
How has Resimac's share price performed this year?
The Resimac share price is up 42.5% so far this year and has managed to emerge from the 2018 Financial Services Royal Commission unscathed, despite fears that Kenneth Hayne's final report recommendations may threaten its business model and future profitability.
