Liberty (ASX:LFG) share price gains on FY21 earnings

The market is responding well to Liberty's full year results.

| More on:
share price up

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 Liberty Financial Group Ltd (ASX: LFG) share price is in the green following the release of the non-bank lender's earnings for financial year 2021 (FY21).

Right now, the Liberty share price is $7.16, 2.14% higher than its previous close.

Liberty share price jumps on 37.6% boost to profit

Here's how the ASX newbie performed during FY21:

  • $853.1 million of revenue, 0.1% more than that of FY20
  • Profit after tax of $185.4 million, 37.6% higher than the previous financial year
  • 24 cent unfranked final dividend

Liberty's income benefited from a 4.5% increase in average financial assets which was more than offset by a reduction in interest income yield from 5.6% to 5.1%. Its profit after tax included $32.5 million of IPO-related expenses.

Over FY21, the company's portfolio of financial assets increased to $12.3 billion following $4.1 billion of originations.

Liberty's fee, commission, and other income increased 13.5% to $231 million.

The company's expenses fell 8% to $640.7 million in FY21.

Impairment of financial assets decreased from $32.5 million in FY20 to $400,000 in FY21.

The company ended the period with $603 million of cash.

What happened in FY21 for Liberty?

Perhaps the most exciting news from Liberty in FY21 was its ASX debut.

The company's prospectus' offered potential investors the opportunity to buy into Liberty for $6 per share. That left Liberty with an expected market capitalisation of $1.82 billion.

Liberty's Initial Public Offering (IPO) occurred around midday on 15 December 2020. The Liberty share price finished its first session trading at $7. That represents a 16% gain on the offer price.

The company's share price was also boosted when Liberty reported its half year results in February.

What did management say?

Liberty's CEO, James Boyle, commented on the results boosting the company's share price today, saying:

We achieved our objective of continuing to help more people get and stay financial with Liberty.

Liberty's business partners and customers have shown tremendous resilience during the pandemic.  

The current Australia wide lockdown and speed of vaccination rollout is causing continued short-term economic uncertainty impacting customer sentiment. However, all things equal, we remain confident of generating further value for Security holders in FY22.

Liberty's chief financial officer, Peter Riedel, added:

LFG's capital and liquidity position remains in a strong position to continue supporting our customers and business partners. LFG established eight new funding vehicles in FY21 raising $4.9 billion in the new liquidity.

What's next for Liberty?

Here's what market watchers interested in the Liberty share price might want to keep an eye on in FY22:

Liberty plans to increase its profitability through improving its customers' experiences, choices, and its risk adjusted returns.

It will do so by speeding up its approvals process using its proprietary technology, focusing on quickly and helpfully answering customers' queries, and providing customers and business partners with access to their information online.

To improve its customer's choices, the lender will be increasing the ways it can fulfil its financial needs and creating options for those who are normally excluded from its offerings.

Finally, Liberty will improve its risk adjusted returns by simplifying, speeding up, and reducing the effort involved in its applications, working proactively in cooperation with customers if things don't go to plan, and being responsible with costs, and fair with customers.

Liberty share price snapshot

The Liberty share price has remained relatively steady since it listed on the ASX. Its highest price so far was $8.35, while its lowest was $6.60.

Right now, the company's share price is 2.2% higher than its first close but 5.1% lower than it was at the start of 2021.

The company has a market capitalisation of around $2.17 billion, with approximately 303 million shares outstanding.

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 Earnings Results

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »

Agricultural ASX share price on watch represented by farmer in field looking at tablet computer.
Earnings Results

Graincorp share price lifts off as dividend is maintained and debts plunge

ASX 200 investors are bidding up the Graincorp share price today. But why?

Read more »

Smiling elderly couple looking at their superannuation account, symbolising retirement.
Earnings Results

Why is this ASX 200 stock avoiding the market selloff and pushing higher?

Not all shares are falling with the market on Thursday.

Read more »