Humm Group Limited – 2025 Half Year Results Summary
Website: Humm Group
Overall Tone
Humm Group delivered strong financial growth in 1H25, with a significant turnaround in statutory profit and cash profit. The company benefitted from higher net interest income, improved cost efficiency, and reduced credit impairment charges. Despite some restructuring costs and ongoing operational challenges, Humm is well-positioned for further growth in commercial lending and Point of Sale Payment Plans (PosPP).
Financial Results Summary
| Metric | 1H25 | 1H24 | YoY Change |
|---|---|---|---|
| Revenue (Interest & Fee Income) | $336.0M | $298.7M | +12.5% |
| Net Interest Income (NII) | $130.6M | $122.7M | +6.4% |
| Statutory Profit After Tax | $27.3M | $(6.0)M | +555% |
| Cash Profit After Tax | $29.8M | $13.6M | +119% |
| Credit Impairment Charge | $33.8M | $48.0M | -30% |
| Operating Expenses | $85.1M | $97.4M | -13% |
| ROCE (Return on Cash Equity) | 10.9% | 4.9% | +600bps |
| Assets Under Management (AUM) | $5.32B | $4.65B | +14% |
| Interim Dividend Per Share | 1.25c | 0.75c | +67% |
Positive Surprises & Potential Concerns
- Positive: Statutory profit rebounded strongly from a loss in 1H24 to a $27.3M profit.
- Positive: Credit impairment charges fell 30%, reflecting improved lending quality and lower loss rates.
- Positive: Cost management initiatives delivered $15.6M in savings, driving a 13% reduction in operating expenses.
- Concern: Net interest margin (NIM) remained flat at 5.5%, as funding costs increased.
- Concern: Ongoing restructuring and transformation costs may weigh on future profitability.
Outlook Commentary
- Commercial lending to remain a key growth driver, supported by strong demand from SMEs in Australia and New Zealand.
- PosPP expansion into UK, Canada, and Ireland is expected to contribute positively in 2H25.
- Continued cost efficiency focus to support margin expansion and profitability improvements.
Guidance Statements
- Revenue Growth: Expected to be driven by volume expansion across core lending and PosPP.
- Profitability: Margins to remain stable, with cost savings offsetting any increase in funding costs.
- Dividend Growth: Payout ratio expected to be maintained, reflecting confidence in future earnings.
Result vs. Market Expectations
- Stronger-than-expected profit turnaround, exceeding analyst forecasts.
- Revenue growth aligned with expectations, but cost savings and lower impairments outperformed.
- Dividend increase of 67% was a positive surprise, reflecting confidence in cash flow sustainability.
Market Positioning
- Share price remained stable leading into results, as investors anticipated a profit rebound.
- Stock trading near mid-range of 52-week performance, with upside potential if growth initiatives continue delivering.
- Humm Group is strengthening its position in non-bank lending, with expansion plans supporting long-term growth.
Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.
Quick Take: H1FY25 ASX:HUM