I would now like to hand the conference over to Mr. Julian Biggins, Joint CEO, MA Financial. Please go ahead.
Good morning, and thank you for joining the MA Financial FY 2025 Results Call. My name is Julian Biggins, and I'm sitting here with my fellow Joint CEO, Chris Wyke. We also have Giles Boddy, our Group CFO, and Michael Leonard, our Head of Investor Relations, in the room. FY 2025 has been another strong year for MA Financial and demonstrates that the group is delivering. Importantly, 2025 demonstrated that we have multiple growth engines that are scaling and capable of delivering material earnings growth over the coming years. I'll begin on slide seven, which captures the key deliveries across the year and sets the context of the result. 2025 was a year of tangible progress.
We delivered very strong AUM growth, driven by record flows. During the year, we acquired IP Generation, which was strategically important and materially expanded our real estate investment and distribution capabilities. We also launched two new ASX-listed private credit products, further diversifying our access to capital in the listed markets. In lending, MA Money's loan book growth accelerated and is beginning to deliver scale benefits, with its earnings contribution stepping up meaningfully. This is tracking well ahead of our original expectations. Finsure continued on its growth trajectory and processed one in nine Australian home loans to reinforce its dominant position in the residential broker market.
Corporate Advisory had an impressive year, continuing its path of delivering revenue and productivity growth post the global pandemic years, and we did this while continuing to invest for the next phase of growth. The business today is broader, more diversified, and structurally stronger than it was 12 months ago, and again, positioned to deliver material earnings growth in FY 2026. Turning to slide eight. The financial results reflect a strong year across all divisions, which resulted in the group delivering in excess of 30% underlying earnings per share growth. Underlying revenue increased 25% year-on-year to AUD 382 million.
AUM increased by nearly 50% to in excess of AUD 15 billion, with diversity across private credit, real estate, growth capital, and equities. Being a diversified alternative asset manager is a real strength where we can lean in and out of asset classes, depending on the cycle and market conditions. Gross flows were very strong at AUD 4.1 billion, up 82% on the prior year and a record for the group. MA Money finished the year with a AUD 5.2 billion loan book, up 148% on the prior period, and growth in monthly settlements accelerating.
Corporate Advisory revenue was up 26% and built further on the growth achieved last year. It's pleasing to see all three divisions contributing and the very strong growth in the last quarter, providing real momentum into 2026. Turning forward to slide nine. Increasing the proportion of recurring revenue is one of our key objectives, as it provides a strong foundation to endure cycles. In FY 2025, recurring revenue was AUD 258 million, which was 25% higher than the prior period. As we've indicated, MA Money is expected to be a significant recurring revenue contributor to the group in coming years, and 2025 provided a glimpse of the potential of the lending platform.
The acquisition of IP Generation and the subsequent acquisition of AUD 1.2 billion of shopping centers, alongside the new listed private credit funds, also provides a significant recurring base fee tailwind into FY 2026. Recurring revenue as a proportion of total income has increased meaningfully over recent years, and we seek to continue that trend. Turning to slide 10. Pleasingly, we expect to meet or have met most of our FY 2026 targets well ahead of schedule. Growth in assets under management has progressed faster than originally anticipated, reaching in excess of AUD 15 billion at December 2025.
This was obviously assisted by the acquisition of IP Generation, although the subsequent acquisitions of Hyperdome and Top Ryde were also material additions. MA Money also reached its AUD 4 billion target well ahead of schedule. This is particularly pleasing, given we are still in the early stages of maturing the residential lending business, and the current performance bodes very well for the future. We expect Finsure to materially exceed its AUD 190 billion target in the coming year as the platform continues to take market share from its competitors. Corporate Advisory is a point-in-time measure, and it was great to see productivity return to AUD 1.1 million per executive this year as market conditions improved.
Group EBITDA margin is slightly below our FY 2026 target, and we acknowledge it is a stretch to be at target at the end of the year. As you know, we have continued to invest in the business to underpin future growth and build a scalable platform. This has been a consistent theme of our success over the last 17 years, and we will continue to look to grow the business from within. As businesses scale and cyclical activity normalizes, our EBITDA margin is expected to continue to improve. In summary, we are very pleased with the performance of the business since we released these targets in August of 2023.
To think that we will materially exceed most of the targets well ahead of schedule is a great validator for the business, the people in the business, and what is possible. Slide 11 summarizes a very strong underlying result. On an underlying basis, revenue, EBITDA, and earnings per share all delivered 25%-35% year-on-year growth. While statutory profit is down, it is important to call out that this is attributable to accounting treatments associated with the acquisition of IP Generation and the listing costs associated with establishing MA 1. Our listed private credit fund.
These are technical accounting impacts rather than reflections of operating performance, and therefore have been removed from our underlying earnings result, consistent with our approach in prior periods. Return on equity rebounded strongly in FY 2025 to 13.6%, up from 10.7% a year earlier, and we expect further improvement into FY 2026 as scale and profitability continue to build. Overall, 2025 has demonstrated that we have multiple growth drivers capable of delivering very strong financial performance at a group level. Slide 12 highlights the momentum across the group over an extended period.
The slide shows a stable, fully franked dividend at AUD 0.20 per share over recent years, which implies a payout ratio for the group of just less than 60% in 2025. As underlying earnings are expected to continue to grow, we will revisit the dividend policy with a strategy of providing a balanced approach of funding growth and prudently increasing dividends to shareholders. I won't dwell on this slide and turn forward to slide 13 and some divisional comments. In asset management, strong AUM growth across both private credit and real estate pushed AUM to exceed the AUD 15 billion target in December.
The consistent strategy of diversifying distribution channels has continued to deliver. We have demonstrated success in building these platforms from the early days of building a domestic distribution channel, to pivoting to non-migration international, and last year into the listed markets. This strategy resulted in very strong growth in gross flows to AUD 4.1 billion, up 82% year-on-year. Net flows were around AUD 2.4 billion, which nearly doubled on the prior period and a record result. The U.S. is obviously in build mode, as well as Singapore, plus our institutional capital efforts, which should all provide future growth opportunities as they mature.
The spread between gross and net flows has increased over recent years as our weighting towards open-ended liquid funds increased. This trend started to moderate in the second half as we raised significant capital into listed private credit and real estate funds that have longer dated tenure. The large majority of our funds are performing very well for investors. We treat the performance of our funds as one of our true north. We also have significant co-investment in our funds, with MA and executives having in excess of AUD 300 million of invested capital in MA managed funds.
Hospitality rebounded in 2025, with Redcape Hospitality's venues performing very well. After a period of consolidation post the global pandemic, Redcape recommenced raising growth capital in 2025, and investors have been rewarded with strong returns since 2017. We expect this to continue with like-for-like venue EBITDA growth, delivering around 20% year-on-year. Transaction fees finished the year strongly, with significant contributions from core Real Estate post the acquisition of IP Generation, relating to the acquisition of AUD 1.2 billion of shopping centers. This represents a very strong start for the integrated core Real Estate platform, and we couldn't be happier with how the team is working together.
Both equities and growth ventures contributed materially to performance fees in the second half, and we generally see a stronger outlook in the coming years as the proportion of funds subject to performance fees grows and some of the older funds mature. We also see Redcape contributing performance fees in the next 18 months. Recurring revenue margin reduced six basis points compared to the prior period as a result of the acquisition of IP Generation. Elevated cash levels in our private credit funds relating to the listed private credit offerings, and a capital-light approach to funding our private credit co-investments.
In lending and technology, Finsure's broker numbers grew by 12% over the year to exceed 4,200, and the Finsure loans on platform grew by 26% to AUD 175 billion. The Finsure business continues to strengthen, and we apply greater focus on technology to ensure we are embedded in the home loan process. Middle, our residential mortgage technology platform, continued to accelerate its automated processing of home loan applications and is currently processing approximately AUD 1 billion of loans weekly, which is double the loan volumes experienced 12 months ago.
As mentioned, the MA Money loan book growth accelerated through the year to end at AUD 5.2 billion, up 148% on the prior year. MA Money's NIM was a strong 1.4% over the year, and we are seeing very low arrears across the book. Corporate Advisory performed very well despite variable capital market conditions. We had a diverse range of larger and mid-market transactions throughout the year across a number of industry groups. The strength of the combined group is evident in a number of areas. In particular, the combination between Finsure, asset management and MA Money, where we are successfully scaling loan origination, technology, and distribution into the AUD 2.4 trillion Australian residential mortgage market.
We are also thinking very carefully about how we build our origination and management capability in-house, and this includes platforms such as Hospitality, Property Services , d'Albora, and MA Money. It's very important to control this capability and provide real access for investors and partners. To close out this slide, we have carefully built a diversified portfolio of complementary businesses that are performing very well, and this gives us great confidence in the future to manage variable cycles. Turning forward to slide 15. Post-year end, activity levels remain elevated. Gross flows have started the year well at AUD 300 million in the first seven weeks, which is solid, given we haven't launched any new products.
Net flows were softer at AUD 96 million, which is slightly less than the run rate, although it's a very short period to extrapolate. Transactional activity across both core and alternative Real Estate remains high, with both teams actively engaged in acquiring assets. A key milestone was reached for our U.S. Interval Fund, with it being added to the Schwab platform, an important distribution breakthrough for raising capital. We also announced the launch of the MA CMBI APAC Credit Opportunities Fund last week, which sees us partner with one of the largest Chinese banks to offer a private credit product to offshore institutional and ultra-high net worth investors.
This again confirms the quality of our platform and provides us with access to a broader investor base via the combined network of MA and China Merchants Bank. The fund is initially seeking to raise and deploy $600 million of capital. MA Money continues to accelerate quickly, with strong origination volumes and accelerating net settlements continuing into 2026. The offering is resonating strongly with mortgage brokers and borrowers. Importantly, the RMBS market has recently demonstrated its conviction for the MA Money platform in supporting an upsized AUD 1.25 billion RMBS issuance on very competitive pricing.
Finsure continues to print record applications and settlements as it attracts more brokers to the platform and increases its market share. The Middle technology offers a real point of difference for Finsure brokers, and we continue to invest in technology to ensure that we are leaders in the space. Corporate Advisory is off to a good start, with a couple of M&A transactions announced already and a solid pipeline ahead. In summary, the first seven weeks of 2026 have seen a continuation of the 2025 performance, which takes us to the outlook slide.
We continue to expect strong net flows underpinned by our private credit and real estate offerings. On a net basis, excluding institutions, we expect to see net flows to grow, which is a strong outlook given that FY 2025 was up 62% on the prior year. In regards to institutions, it's more difficult to forecast the timing of specific mandates, although the recent announcement of the CMBI partnership and Keppel REIT acquiring a 75% interest in Top Ryde provides us with confidence that we can grow this business.
Offsetting this, and as previously flagged, our institutional partner, who owns Marion Shopping Centre in Adelaide, has now commenced a sales campaign, which we expect to close in mid-2026. If successful, the asset would be sold, and it currently represents approximately AUD 600 million of AUM, and we provide investment management services only on a limited institutional fee basis. In the last quarter of 2025, we saw AUD 1.2 billion of shopping centers settle alongside the launch of our listed private credit notes, MA 2, which was a very strong finish to the year.
That finish is expected to deliver material growth in asset management revenue as these initiatives contribute a full year contribution alongside the settlement of IP Generation. On this note, while core Real Estate will provide additional growth momentum, the recurring fee streams are lower on an AUM basis, which will modestly dilute asset management's recurring gross margin. However, real estate strategies typically drive stronger AUM growth due to embedded leverage, and they also provide material transaction and performance fee opportunities. Over the period, we've been more proactive in funding some of our co-investments in our private credit products via third parties, which results in lower absolute earnings, although more efficient use of capital and a higher return on equity.
MA Money's loan book currently sits at AUD 5.7 billion. At that level, it underpins a stronger NPAT contribution than previously guided. You should probably think about the top end of the range or potentially slightly better. That said, we are only at the beginning of the year. Market conditions can change, and we remain cautiously optimistic in our outlook. Strategic spend moderates slightly in FY 2026 as the U.S. platform becomes more active in loan origination and as we anticipate flows to be stronger, particularly following inclusion on the Schwab platform.
We have a number of initiatives ongoing in the U.S. in addition to the Interval Fund. Overall, we enter FY 2026 with strong momentum, improving operating leverage, and a number of growth engines that should underpin strong earnings growth over the coming years. We appreciate that this is a busy time of the year and therefore will open the line up for questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Fraser Noye with UBS. Please go ahead.
Hi, gents. Just a couple of questions from me. Firstly, you've achieved FY 2026 targets well in advance of original time frames for asset management and MA Money. You've got good momentum in Finsure, where I believe you mentioned you're expecting to land above the AUD 190 billion target. So just curious why you haven't increased the stated targets for FY 2026 or struck targets for FY 2027.
Thanks, Fraser. I think this is something we've sort of debated in the past, and clearly there's a lot of momentum in the business. I think when we put these targets in the market, it was August of 2023, and we're very much in a different stage of growth. I think you can see the growth in the business and extrapolate some of the things we're doing, but it's just not something that we've considered to update the targets at this point in time.
No worries. And just secondly, on the group, EBITDA margin target of 40%, understand you've still got the strategic investment headwind of AUD 6 million-AUD 8 million this year. Just curious on how confident you are in achieving the 40% this year, and also interested in your view on where the margin can get to over the long term as operating leverage starts to come through.
Yeah, I think this is one of the things that we sort of grapple with is, you know, we're probably pretty good at growing the revenue line, but at that same time, we're investing in the, in the business and sort of, I guess, protecting our people as well, where we have very high-quality people in the business, and we need, we need those people to generate the revenue growth. So longer term, we see our business continuing to scale, and with the scale of benefits, you see that EBITDA margin keep expanding. It's hard for us to be definitive around whether it's three years, five years at this juncture.
Albeit we are calling out that, obviously, it's very unlikely at 31 December this year that we'd hit the 40% margin, and we'd see the margin probably accreting a couple of points this year as we go through the journey of the year.
Yeah.
But it is improving, and we are very focused on it, but equally are focused on growing the top line, and think we're doing that pretty well. So it's the one, it's the one growth target that obviously we're missing on.
Yeah. I think ex-strategic spend this year for the 2025 year, it came out 33%. We see that improving in the year ahead, but it's a bit of a stretch to the 40% this year.
Great. Thanks, guys.
Thanks, Fraser.
Your next question comes from Laf Sotiriou and MST Financial. Please go ahead.
Good morning, guys, and thank you for taking my questions. Can I also start on slide 10, and rather than, and I agree that you've already achieved and reached a lot of those targets, but philosophically, how are you thinking about it internally, about, you know, setting the next sort of three to five year medium-term targets within the business? Are you looking within asset management to expand into any other categories? And so, for example, you know, there's some discussion around private credit, and is competition for investment starting to heat up. Are you seeing that? Do you still think that you've got lots of runway? And what's your differentiation pitch that you're putting into the market versus a lot of the ones that have been coming around?
So that's a pretty full question there, Laf, but I think from the outset here, like bottom up, we build obviously three-year forecasts internally around every one of our businesses and what we think they can achieve. I think the question is whether we're going to put them in the market or not, and, you know, at this juncture, I think we've proven the momentum in the business, and you can extrapolate sort of growth rates. We're always looking at new products, always looking at new channels that we can grow into. We are very happy in the lanes that we play in or we swim in. But maybe Chris, to the private credit line. Yeah, so with respect to private credit, there's two sides to the equation.
Firstly, in terms of sourcing capital, and we are, we are sourcing capital not only domestically and internationally, and in particular, international growth with respect to the States and international growth with respect to the CMBI partnership initiative. So we're constantly looking at ways to continue diversifying where we are raising the money from, as evidenced by where our business was in private credit and sources of capital from three years ago through to today with Warburg Pincus, CMBI, domestic and international, so high-net-worth distribution and pushing deeper domestically into the States, having just had our U.S.-based product go on the Schwab platform in the U.S. And in our pitch to those investors, how do we differentiate ourselves? We differentiate ourselves around the granularity of the product that we're investing in private credit.
It's a bit different to the mass market and also the manner in which we have the various parts of our business that can generate deal flow and investment opportunities. So in our private credit, we're heavily asset-backed. We have real estate and non-real estate. A large growth in private credit and offerings of private credit that are presented globally are typically in corporate or corporate leverage loans. We do do that, but we also have a degree of expertise and weighting towards asset-backed. So when you pierce into private credit as an asset class, there is a differential there. The other thing that resonates with the investor base is our whole ecosystem around the Finsure business, having that broker network out there, having the ability to originate the MA Money business.
It is a point of difference compared to some other private credit managers. Then the final piece is, credit's all good when it's going well, 'cause the returns are contractually defined. We also have one of the most prominent capital management restructuring franchises in the country, and that expertise that we have really resonates with the investor base to say, "Okay, we like to think everything will go smoothly, but if it doesn't, we've had an extra limb of expertise compared to other folks maybe that they see market investment opportunities to them in terms of that expertise." And in terms of the deployment side, where we're putting the capital to work, we've spent a lot of time, effort, and energy in developing our own capability on investment origination.
So we won't, we won't just go to the street and take little bits of widely shopped deals. We are very focused on ensuring that we've got executives that are out there finding deals, negotiating documents ourselves, which others do, but it is a bit of a point of difference compared to other smaller based teams that are reaching out to large syndicators to take pieces of private credit. That's, you know, that's a big point of difference for us, where we originate the overwhelming majority of the deals that we end up executing in private credit.
Hey, got it. And can I just follow up with one question more broadly in terms of the priorities? And I'll put it a different way over the next couple of years. So as you reassess the dividend and are in a stronger position to increase the dividend, how do we think about the considerations around winding up further project spend and organic new business lines or revenue opportunities versus dividend? Because, you know, you've got a proven track record with things like MA Money or inorganic opportunities also on the table?
I think, I think we've probably demonstrated how we think about it, and clearly, you know, retaining capital growth is one of our key sort of considerations in how do we fund future growth. The point I was making about dividend on the call was really, you know, we, we were sort of lapping four years ago, where we're getting back close to the earnings per share that we had at that point in time when we had a 20 dividend. As we go through that sort of, I guess, threshold, you know, the conversation at the board level becomes more, you know, real around what do we want to do about our dividend. I think there's a, as I said on the call, there's a, there's a, there's a balance between funding future growth, which we're very strong about.
We have a very strong opinion about, but also balancing that with a moderate sort of increase in dividends to shareholders to reward those people as well. Yeah, we've got good franking credits, and we generate good cash.
All right, thank you.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Richard Coles and Morgans. Please go ahead. Mr. Coles, please go ahead with your question. Perhaps your phone is muted.
Sorry about that. Yeah, guys, just a couple of quick questions. On the property cycle, you obviously made the IP Generation acquisition last year. I think at the time, you were, you're comfortable, you got your timing reasonably appropriate on that acquisition. Just how are you seeing the property market? You've obviously done a couple of recent deals, Top Ryde, Hyperdome, and how you see the outlook near-term in that space.
I think we've taken a very consistent view with the property. Property is a longer-term investment. It's not a liquid asset. It's, you know, it's a five to seven to eight-year hold or longer. You know, with interest rates bouncing around a little bit, as long as you're buying growth assets, like assets that have a very good demand side of the equation, we think you'll be fine. And you're still seeing exceptional opportunities to buy assets well below replacement costs. So if they're well located, have the right demand drivers, we still think that it's a very opportunistic time in buying real estate. Clearly, you know, if interest rates were to run another 75 or 100 points, then it becomes a very different conversation. But we don't anticipate that in the current market.
But, you know, we think there's a good pipeline of opportunities, and we're quite active in that space right now.
Thank you. Just, obviously, it's a newer book, so still seasoning. But you're doing like some less vanilla loans in your MA Money portfolio. Can you maybe just talk to us some initial views that you've got on credit quality three to four years in, into that loan book?
Sure. We've built that book up with a product mix and blend. In the overwhelming majority, we are writing is in the sort of what we define as full on alt prime. And you have to blend and balance your book where you're looking at either more bespoke credit, but higher yield to match in with that. We also are very focused on growing into areas of credit, which we think are pretty low risk, but are becoming unbanked. And as a result, you're able to actually charge a pretty good margin because the supply of capital into those opportunities is not very strong. And they're things like self-managed super fund at 60% loan to value.
That's what we really like, and it's becoming more and more unbanked and, and therefore, moving into the non-bank space. So, you know, the book is seasoning. We're pretty comfortable with where we're at with the arrears. You know, we've ticked up a little bit, some of our provisioning, but our 90 days is consistent with where it's been for sort of the last 12–18 months, which is below the 1% mark, and our credit loss provisioning was, in the 2024 year, we're probably running at about eight or nine points. We lifted that to 12–13 at the moment. So we're experiencing, you know, insignificant volume increase, but we haven't seen a change in the 90-day arrears.
So that's staying at that low level, and the credit provisioning is relatively low and sufficient at 13 basis points that have got in for the 25 years. So been a good experience.
Thanks. And can you maybe just give us some—you’ve obviously guided to net flows up on this year, which is a fantastic effort into FY 2026, but can you maybe give us some more visibility on what you expect your newer distribution channels? I think you mentioned Singapore, you mentioned being on Charles Schwab in the U.S. What you expect those to maybe contribute, or can you maybe give us some initial, you know-
I don't think we should be on that. Yeah, Coles, I think what we'd say is, like, the listed market is obviously a new market for us that was very productive last year. Bringing IP Generation into the fold has really deepened our sort of real estate, ultra-high net worth channels, but also strengthened our existing distribution channel into the IFA network. And then clearly, the private credit funds that are on the big platforms continue to do their thing. So I think when you build it up, you know, are we expecting Singapore or the U.S. to go, you know, ex— you know, very, very strongly? No, but they're big contributors, and it's probably a bit granular for this sort of conversation. But directionally, obviously, you know, last and last year is very positive.
No, that's fine. That gave me enough. Thanks, thanks, Julian. Thanks a lot.
There are no further questions at this time. I'll now hand back to Mr. Biggins for closing remarks.
Just want to say thank you and appreciate your time on the call on a busy day, and, no doubt we'll catch up with a few of you as we go around marketing. Thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect.
Goodbye.