Judo Capital Holdings Ltd (ASX: JDO) shares are catching the eye on Tuesday.
In morning trade, the ASX 200 financial share is up 11% to a two-year high of $1.54.
This follows the release of the small business lender's FY 2024 results.
ASX 200 financial share jumps on results
- Gross loans and advances (GLA) up 20% to $10.7 billion
- Net interest margin (NIM) down 35 basis points to 2.94%
- Underlying profit before tax up 2% to $110.1 million
- Statutory profit before tax down 3% to $104.3 million
What happened in FY 2024?
For the 12 months ended 30 June, the ASX 200 financial share reported a 20% jump in GLA to $10.7 billion. This was at the top end of its previous guidance, reflecting 3x system lending growth.
Management notes that this was driven by strong momentum with its regional expansion strategy. The company established four new locations and recruited 21 additional relationship bankers during the year.
But it isn't settling for that. Judo plans to establish a further 10 locations and recruit another 20 bankers in FY 2025, which it expects to underpin an acceleration in lending.
And while Judo Capital's NIM reduced by 35 basis points to 2.94%, this was ahead of its guidance range of 2.85% to 2.90%. Furthermore, its margin outlook in FY 2025 is looking positive.
Management advised that it achieved a record month of lending growth in June at an average margin of 4.5%. Furthermore, its pipeline of loans in application, approved, and accepted status was at an all-time high of $1.8 billion at the end of June with an average margin of 4.5%. This bodes well for the year ahead.
Finally, on the bottom line, the company reported a 2% increase in underlying profit before tax (PBT) to $110.1 million. This was in line with its guidance, reflecting above-system lending growth at strong margins, prudent management of costs, and a fundamental shift in the bank's funding mix.
Management commentary
The ASX 200 financial share's CEO, Chris Bayliss, was pleased with the company's "strong" performance. He said:
FY24 has been another year of strong financial and operational performance, delivering to our guidance targets, and growing our bank. This year we celebrated several milestones that highlight the incredible progress we have made since our inception in 2016, including marking our five-year anniversary as a fully licenced bank and surpassing $10bn in lending. Judo is now an established player in the Australian business banking market.
Outlook
Judo has reiterated its guidance for FY 2025. It continues to target 15% growth in profit before tax. Bayliss adds:
Judo is well positioned to continue growing towards our vision of becoming a world-class SME business bank. Our relationship-based approach to lending will enable our experienced relationship bankers to continue supporting SMEs, providing credit to successful operators who are looking to grow and invest in their businesses. We will also continue to provide support and seek optimal resolutions for any customers encountering challenges.
