Humm Group announced its financial results for the first half of the fiscal year 2024, highlighting a mix of strong growth in receivables alongside challenges due to increased interest expenses and a statutory net loss. Here are five key highlights from their announcement:
Growth in Receivables: Total receivables reached $4.65 billion, marking a 23% increase compared to the previous corresponding period (pcp). This growth was driven by a 39% increase in commercial receivables to $2.70 billion and a 6% increase in consumer finance receivables to $1.95 billion.
Profitability Amidst Rising Interest Rates: The Normalised Cash Profit (after tax) for 1H24 was $28.1 million, down 27% on pcp. This decline comes despite significant challenges such as a material increase in interest rates and costs associated with rebuilding the PosPP offering. The commercial sector underpinned this profit, showcasing resilience.
Impact of Increased Interest Expenses: The Normalised Cash Profit was significantly impacted by an increased interest expense of $61.7 million due to the rise in receivables, base rates, credit spreads, and the optimization of funding structures. This represents an 88% increase over the pcp.
Cost Management and Efficiency Measures: Humm Group executed an additional $7.5 million in cost savings during the first half, bringing total savings to $26.1 million since the program began in 1H23. These savings helped mitigate some of the effects of reinvestment in customer-facing roles and the broader inflationary pressures.
Dividend and Share Activity: The company proposed a fully franked interim dividend of 0.75 cents per share. Additionally, it purchased 20.9 million shares, approximately 4.0% of shares on issue, through buybacks and share plans as of the report's date.
This announcement is a summary of the company approved ASX announcement on 20/2/2024 and is based on facts.