Finexia delivers solid $1.82m half-year net profit as key business segments grow – As Featured in Business News Australia

Finexia delivers solid $1.82m half-year net profit as key business segments grow - As Featured in Business News Australia

Finexia Financial Group (ASX: FNX), a diversified financial services entity, has demonstrated a robust underlying earnings performance consistent with projections for the first half of FY23, achieving a commendable net profit after tax of $1.82 million.

This favorable outcome was propelled by a noteworthy 18% surge in group revenue, reaching $7.06 million. Finexia proudly reports that each of its business segments, namely Private Credit, Funds & Asset Management, and Equity Capital Markets, surpassed the performance of the corresponding period in the previous year.

Neil Sheather, Managing Director of Finexia, expresses satisfaction, stating, "It’s pleasing to note that we’ve been able to increase revenue despite the macroeconomic headwinds being felt across the broader economy."

As an ASX-listed specialist asset manager, Finexia, renowned for its expertise in private credit and equity markets, expanded its funds management operations during the first half of the year, following the successful launch of the initiative.

 Childcare Centre Incubation Fund.

The fund, which initially secured $50 million in commitments from wholesale investors and founders' seed funding at the end of December, has seen a significant increase, surpassing $55 million.

Neil Sheather, Managing Director of Finexia, expresses satisfaction, stating, "We’ve been extremely pleased with the level of interest being expressed in the fund by both investors and childcare operators." He anticipates that the fund's positive momentum will make a substantial impact in the current half-year, ultimately reflected in the full-year results for FY23, instilling confidence in affirming the previous group operating profit guidance target of $4.3 million.

Sheather further notes that Finexia is actively exploring opportunities to secure a wholesale funding facility, marking the next phase of corporate growth for the company.

In the first half of FY23, the company reported a pre-tax operating profit of $2.44 million, a slight decrease from $2.87 million in the corresponding period. The net profit of $1.82 million, compared to $2.56 million previously, is primarily influenced by changes in the group’s tax position and a provision for an impairment on a single isolated secured loan.

During this period, Finexia's Stayco Resort Accommodation Fund experienced a notable increase in operating revenue, doubling its performance, fueled by a robust domestic tourism market in southeast Queensland.

The Asset & Funds Management division, which includes the Childcare Centre Incubation Fund, currently contributes 9% to the group's revenue. However, Sheather anticipates significant growth in this division, projecting it to eventually constitute around 30% of the total revenue.

Finexia accomplished a cash operating profit of $3.11 million in the December half, facilitating the consolidation and expansion of its cash position alongside the net tangible asset backing of its shares.

Total group assets were elevated to $73.95 million during the half-year, marking a 42.4% increase from the previous year. As of December 31, 2022, the group held $10.1 million in cash, further strengthened by the completion of a non-renounceable pro-rata rights issue, generating $1.29 million before costs.

Sheather emphasizes the company's commitment to generating sustainable recurring cash profit, a crucial element in realizing future dividend ambitions. Finexia's dedication extends to developing a sustainable dividend program for the benefit of its shareholders.

With offices in Sydney, Queensland, and San Francisco, Finexia is supported by a team of highly experienced corporate advisory and capital markets professionals, specializing in finance structuring and tailored investment solutions across the client spectrum.

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