Latitude Financial Services Group (LFS) H2 2024 earnings summary

Executive summary

• Achieved a strong performance turnaround in 2024, with double-digit growth in volumes, receivables, and net profit, supported by robust origination, purchase activity, and strategic partnerships.

• Net interest income rose 10.4% YoY to $677.5m, with total operating income up 11% YoY to $729.2m.

• Cash NPAT from continuing operations surged 139% YoY to $66m, and statutory NPAT returned to profit at $30.6m.

• Opened 265,000 new customer accounts (up 22% YoY) and processed 53 million credit card transactions (up 7% YoY).

• Declared a final dividend of 3.0 cents per share, reflecting a 47% payout ratio.

Financial highlights

• Total transaction value reached AUD 6.7 billion, up 10% YoY, the highest in five years.

• Money division originated AUD 1.5 billion in new loans (up 33% YoY), with ending receivables at AUD 3 billion (up 11%).

• Net interest margin improved to 10.5% (+85bps YoY), and risk-adjusted income yield rose to 8.0% (+94bps YoY).

• Cash profit before tax was AUD 155 million (up 59% YoY); Cash EPS more than doubled YoY to 6.33 cents.

• Tangible equity ratio closed at 7.1%, above the 6%-7% target range.

Outlook and guidance

• Positioned for continued shareholder value and profit growth in 2025, supported by expected interest rate easing and improved macroeconomic conditions.

• Anticipates further margin expansion from full-year benefit of pricing actions, funding refinancings, and central bank rate reductions.

• Ongoing investments in technology, AI, and digitalization to drive efficiency and innovation.

• Management expects continued focus on core Australia and New Zealand segments, with Asia and Canada exits ongoing.