Aggregator and lender intends to invest in 35 brokerages by 2029
ASX-listed brokerage network and lender Australian Finance Group (AFG) posted strong results across its primary business segments in the six months to 31 December.
On the aggregator side, residential settlements increased by 19%, with asset finance settlements up 20%.
Discussing the results, chief executive David Bailey (pictured) touched on AFG's acquisitive appetite, which saw it invest in three new brokerages in the reporting period, including a 35% equity stake in TS Finance Broking and a 40% stake in Brisbane-based asset finance specialist Network Finance.
He said: “Our commitment is to grow sustainably and partner with brokers who share our vision. Pleasingly all investments to date have delivered earnings growth, with several businesses continuing to scale through their own acquisition opportunities. We look forward to working with them as they build their businesses.”
AFG has now made five equity investments into brokerages, but it intends to keep growing. As stated in today’s results, the group hopes to invest in 35 brokerages by the end of 2029.
AFG brokers now write 1 in 9 home loans nationally.
On the manufacturing side, AFG Securities grew its loan book by 24% to $6.3 billion, with net interest margins expanding by 11 basis points to 124 basis points. The manufacturing segment also includes AFG’s 31.9% investment in Thinktank.
Loan settlements increased by 34% to $1.9 billion.
Post-reporting period, AFG Securities closed its largest-ever residential mortgage-backed security (RMBS) transaction earlier this month, raising $1.2 billion.
Across the entire business, net profit after tax (NPAT) surged 46% year on year to $22.4 million.
Bailey said the results reflect “the strength of AFG’s fundamentals, underpinned by our leading broker proposition, the scale and diversity of our business, and a clear strategy executed with discipline through all stages of the cycle”.
