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.

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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.

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