The stock is down but this mid cap appears to be firing on all cylinders

We’re often told that reporting season isn’t just about the numbers a company delivers, but how those numbers stack up against expectations. Beat and you’re rewarded. Miss and you’re punished.

MA Financial’s Joint CEOs, Julian Biggins and Chris Wyke, delivered results largely at the upper end of expectations, along with an upbeat outlook, when they presented the company’s FY25 numbers on Thursday. Yet the stock closed 9.8% lower on the day and have continued to slide at the time of writing.

Key results (FY25)

• Underlying revenue $382.4m v. $369.3m ests (4% beat)
• Underlying EBITDA $113.0m vs. $110.6m ests (2% beat)
• Underlying EBITDA margin 29.6% vs. Morgans ests 30.6% (100bp miss)
• Underlying NPAT $57.0m vs. $55.8m ests (2% beat)
• Total dividend of 20cps vs. Morgans ests 23.5cps (14.8% miss)

The result showed strong performance across all three of MA Financial’s divisions. Net fund flows in Asset Management doubled to $2.4 billion, while the Lending & Technology division grew 118% for the year and contributed 26% of group EBITDA. The firm also benefited from increased M&A activity - a more lumpy and less predictable earnings stream than the recurring revenues generated by the other two divisions.

If there was a single word to describe the outlook, it would be “momentum”. If there was a glitch, it might have been to do with costs, but this appears to be a business with a decent head of steam firing on all cylinders.

UBS retained its ‘buy’ rating, nudging its price target up to $12.10 from $12.00. The broker acknowledged that MAF is trading at a premium to its historical average multiple, but argues this is justified by an improvement in the quality and mix of earnings.

So what didn’t investors like? Not much, according to QVG Capital Portfolio Manager Chris Prunty, who says the share price move likely reflects how well the stock has held up relative to peers in recent months. Prunty described the result as solid, with an even stronger outlook.

“They’ll benefit from their mortgage book scaling and a full year benefit of the IP Generation acquisition this year as well as a higher starting funds under management than the prior year.”

“Yesterday’s share price reaction probably says more about how well MAF has held up compared to other growth stocks than it does MA’s prospects.”

Small and mid-cap managers have been navigating some sharp moves of late. Prunty says it’s conceivable investors are trimming positions in stocks that have held up, like MA Financial, and rotating capital into names that have been heavily sold down.

As part of Livewire’s C-Suite coverage, I spoke with Joint CEO Julian Biggins about performance across MA Financial’s three operating divisions and where he sees growth emerging in the year ahead.

You can watch the interview or read an edited transcript below. 

Edited transcript

What were the key numbers investors should focus on in the latest results?

Julian Biggins: The key drivers for me in terms of the result — or the key outputs — were very strong underlying earnings growth. This year we delivered 31% underlying earnings growth. Total revenue of about $382 million is a very strong result for our business.

When you look at what’s actually being delivered across the group, performance was strong across the three key divisions: Asset Management, Lending & Technology, and Corporate Advisory. The breadth of that performance is what stands out to me, and I’m really pleased to see that come through this year.

Asset Management, which is primarily private credit and real estate, grew 49% to $15.3 billion. What are your targets for growing this business, and what makes you different in a competitive market?

Julian Biggins: From a target perspective, we set a goal three years ago of reaching $15 billion by December 2026. We’ve actually hit that target a bit earlier than expected, which is great.

We think real estate and private credit are both very interesting sectors for investors to deploy into. In terms of what makes us different, investors are shown a lot of product. For us, we’re defensive. We focus on income-yielding assets and look for lower-risk, lower-return investments with strong capital protection.

We’re also very firm on not outsourcing the management of our assets. If it’s a shopping centre, we’re doing the leasing and the development. At the marinas, we’re tying the ropes for boat owners. At the pubs, we’re pouring the beers. These are people who are part of the MA ecosystem.

That ability to have full alignment with our investors in how we operate assets is important. It’s a nice thing to say, but strategically it delivers outcomes. It improves returns and decision-making.

Even in our lending business — our residential home loans platform — we’re settling around $400 to $600 million a month. Managing that loan book gives us insights and product opportunities for Asset Management. It’s about how the different parts of the business work together.

I learned during the GFC that outsourcing asset management can create misalignment of interests. Owning that capability is important to us.

You launched the MA Credit Income Trust (MA1) in 2025. The uptake of listed income products has been strong. Do you plan to bring more offerings onto the ASX?

Julian Biggins: I’m sure the ASX would like that.

For us, it’s about creating broader funnels to access capital. We’ve been involved in listed markets for a long time. At some points in the cycle they’re open, at others they’re shut. The same applies to institutional capital and other channels.

One of the pleasing aspects of this result is that over the past 12 months we raised about $4.1 billion, and it’s the diversity of that capital that stands out. Listed, institutional, ultra-high-net-worth investors in Australia, and also internationally — that diversity is one of our strengths and quite unique to the business.

We do think the listed market is interesting, and listed products can be attractive for investors. We’ll continue to assess opportunities as they arise.

Last time you were on Livewire, you talked about planting seeds for the future, and MA Money was one of those seeds. Can you explain that business in more detail and the contribution you see it making in the years ahead?

Julian Biggins: MA Financial is about 17 or 18 years old now, and we’ve grown a lot organically. When we talk about planting seeds, it’s about investing in new ideas that fit our criteria for building sustainable, scalable businesses.

MA Money was an idea from five or six years ago focused on the Australian residential market. We asked how we could build a product providing home loans to everyday borrowers — people who might not get the best service from the major banks. That could be tradies, self-employed borrowers, or foreign buyers.

We focused on service — turnaround times and giving borrowers certainty that they can complete a purchase.

Two years ago, the loan book was very small. Today it’s around $5.7 billion and growing quickly.

We told the market that in FY26 the business would generate $15 to $20 million of NPAT. Today we said it’s likely to be at the top end of that range, potentially better.

Importantly, we’re seeing very low credit losses and minimal arrears. It’s still early days, but the credit quality of the book is strong.

Corporate Advisory and equities revenue had a good year, up 23%. This can be a cyclical part of your business. What’s your view on the outlook for activity in this division?

Julian Biggins: Corporate Advisory can be lumpy. But over 17 years we’ve demonstrated fairly stable revenue generation.

Since the pandemic, equity capital markets have been subdued — and that’s across the industry, not just for us.

We target $1.1 to $1.3 million of revenue per executive. We’re currently at the lower end of that range, and that’s without meaningful ECM contribution.

Recent volatility has been extreme in some sectors, particularly tech and software. It’s difficult to predict whether equity markets will be conducive this year.

However, our M&A franchise is strong. We’re active across large-cap and mid-cap transactions on both buy and sell side, and that activity has been consistent and building.

On the call today, you talked about the importance of recurring revenue, which now represents 67% of underlying revenue. Do you have targets for where that number goes?

Julian Biggins: We want to increase it, but we don’t set hard targets.

MA Money is a good example. Last year it was probably a $3–4 million EBITDA loss. This year it’s generating more than $10 million. Next year it could be $20 million or more.

A home loan is typically refinanced every four years, which gives us good visibility on income streams.

In Asset Management, acquisitions late in 2025 — including $1.2 billion of shopping centres — plus around $800 million raised across funds, will provide a strong base of recurring management fees into FY26.

Cycles can lift transactional income and performance fees, particularly as real estate matures. But generating around $270 million of recurring revenue today provides significant stability. Having been here from day one, that’s very pleasing.

Finally, where do you see the biggest growth opportunities from here, and what targets should investors be watching most closely?

Julian Biggins: It’s business by business, but the pleasing thing is that all divisions are growing.

In real estate, we see an opportunity to acquire high-quality assets below replacement cost. It remains a buyer’s market. With population growth, wage growth and limited new supply — because feasibility doesn’t stack up — the environment is favourable.

Our marinas are performing well. The pubs are trading strongly. Private credit remains attractive from a risk perspective.

Asset Management and MA Money are currently the strongest growth engines, but diversification allows us to allocate capital across opportunities as the cycle evolves.