The single best result from August reporting

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 3^rd 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%.