The Humm Group Ltd (ASX: HUM) share price is certainly catching the eye on Wednesday.
At the time of writing, the ASX All Ords share is up 28% to 66.5 cents.
This follows the release of the diversified financial services company's FY 2024 results.
ASX All Ords share rockets on FY 2024 results
- Total receivables up 18% to $5 billion
- Net operating income up 1% to $311.1 million
- Net interest income up 2% to $251.4 million
- Cash profit after tax up 25% to $35.9 million
- Normalised cash profit down 19% to $60.6 million
- Fully franked final dividend of 1.25 cents per share
What happened during the year?
For the 12 months ended 30 June, the ASX All Ords share reported an 18% increase in receivables to $5 billion. This reflects a 26% jump in Commercial receivables to $3 billion and an 11% lift in Consumer Finance receivables to $2.0 billion.
This ultimately led to Humm reporting a 25% increase in cash profit after tax to $35.9 million. Management advised that this result was underpinned by net interest margin (NIM) stability, significant ongoing cost savings, historically low credit losses, and a strong balance sheet.
And while its normalised cash profit was down 19% to $60.6 million, this includes suspended products and other material items.
The Humm board declared a fully franked final dividend of 1.25 cents per share, bringing its full year dividend to 2 cents per share. This is flat on FY 2023's dividend.
Management commentary
The ASX All Ords share's CEO and managing director, Stuart Grimshaw, was pleased with the company's second half turnaround. He said:
Through 1H24 we refocused the business around our customers, executed strategic pricing initiatives and delivered cost efficiencies that allowed us to reinvest in growing the business. This resulted in a pleasing turnaround in 2H24 as we saw Normalised cash profit (after tax) increase 16% on the first half.
Contributing to the strong second half performance was NIM stabilisation as a result of improvements to gross yields and more stable base interest rates while net loss remained at historic lows as we continue to be prudent with our risk decisioning. Our Commercial business continues to demonstrate impressive operating leverage, with receivables growing by 26% with only a 4% increase in normalised operating costs.
Outlook
No firm guidance has been provided for FY 2025. However, management advised that it "will continue to drive profitable growth across its operations, as it grows and expands the Commercial and international businesses while continuing to rebuild the domestic Consumer business."
