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The single best result from August reporting

Romano Sala Tenna

Katana Asset Management

We think the single best result from this reporting season was Australian Finance Group (AFG), which delivered a 33% increase in underlying NPAT and a 15% increase in dividend. 

AFG is the largest mortgage originator in Australia and now writes nearly 20% of all loans originated through a broker.  The result was driven by strong growth in its white label products (where it earns 10x the margin) along with strong growth in broker numbers and its 3rd party mortgage book.

The market would appear to be undervaluing AFG given it is trading on 11x with a 6.2% fully franked yield.   Looking forward, AFG has indicated that white label sales are up 50% in July, and they are about to rollout a step-change SME/Commercial lending platform.

We recently spoke to Livewire about Australian Finance Group, and you can access the short interview here: (VIEW LINK)

7 more standouts

During the recently completed reporting season, other standout results included: 

  • The A2 Milk Company (A2M) 
  • MNF Group (MNF) 
  • Santos (STO) 
  • Regis Resources (RRL) 
  • Janus Henderson Group (JHG)  

 

More importantly, the companies with the best outlook statements were clearly:

  • Pioneer Credit (PNC) which is forecasting ‘at least’ 48% profit growth,
  • Mineral Resources (MIN) which is expected to grow its profit by >20%.

 

 

 


1 stock mentioned

Romano  Sala Tenna
Portfolio Manager
Katana Asset Management

Katana Asset Management was founded in September 2003 as a boutique investment management firm. Katana employs an all opportunity investment mandate being style, sector and market cap agnostic.

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