E&P Financial Group (EP1) H2 2024 earnings summary

Executive summary

• Resolved legacy legal and structural issues, including class action settlement, exit from Real Assets, and internalisation of URF Responsible Entity, positioning for future growth.

• Refocused strategy on core businesses: wealth, capital, and funds, emphasizing client-centricity, operational efficiency, and business simplification.

• Leadership transition with new CEO and CFO, and renewed commitment to diversity and talent retention.

• E & P Wealth saw strong revenue and FUA growth, with annuity-like revenue increasing across all divisions.

• Claremont Global Fund expanded external distribution, and capital market conditions improved in 2H24, driving a material uplift in group performance.

Financial highlights

• Net revenue for FY 2024 was AUD 140.9 million, down 16% year-over-year, with underlying EBITDA of AUD 2 million.

• Statutory net loss after tax of AUD 27.7 million, mainly due to a non-cash impairment of AUD 19.3 million in E&P Capital and non-underlying items totaling AUD 3.2 million.

• 2H24 net revenue increased 9% sequentially, despite a 30% decline in E & P Funds revenue; 2H24 underlying EBITDA was AUD 6.6 million versus a AUD 4.7 million loss in 1H24.

• Staff expenses fell 6% and operating expenses fell 3% year-over-year, reflecting cost control.

• Cash and cash equivalents at 30 June 2024 were AUD 48.9 million, with no debt.

Outlook and guidance

• Focus on returning to long-term profit growth and restoring shareholder value, with business rationalisation complete.

• Considering a formal application to ASX to delist the company.

• July 2024 trading consistent with improved second half FY 2024 performance; initiatives to drive revenue growth and improve margins continue.

• Board policy targets a full-year dividend payout of 75-85% of NPATA in a normal environment.