Australian Finance : AFG Announces 1H FY22 Results

Market Release

only25 February 2022

Market Announcements Office

ASX Limited

Exchange Centre

20 Bridge Street

useSYDNEY NSW 2000

Dear Sir/Madam

AUSTRALIAN FINANCE GROUP LTD ANNOUNCES 1H FY22 RESULTS

Please refer to the following information in relation to Australian Finance Group Ltd's (ASX: AFG) half year results for the six months ended 31 December 2021.

Part 1:	Appendix 4D and half year 2022 financial report.
Part 2:	Appendix 3A.1: notification of dividend.
Part 3:	1H	FY22 results investor presentation.
Part 4:	1H	FY22 results market release.
personal

David Bailey, Chief Executive Officer and Ben Jenkins, Chief Financial Officer, will give a presentation to analysts and investors via a conference call at 11:00am (AEDT) today.

Authorised for disclosure by:

ForLisa Bevan

C mpany Secretary

CONTACT DETAILS
Alison Clarke, AFG Head of Corporate Communications	Mob [phone]
David Bailey, CEO	Tel [phone]

For personal use only

Australian Finance Group Limited

ABN 11 066 385 822

Half-year Report and Appendix 4D

for the half-year ended 31 December 2021

Australian Finance Group Limited Half-year Report and Appendix 4D

For the half-year ended 31 December 2021

For personal use only

Contents

Appendix 4D

Results for announcement to market	3
Half-year Report
Directors' report	4
Consolidated Statement of Financial Position	6
Consolidated Statement of Profit or Loss and Other Comprehensive Income	7
Consolidated Statement of Changes in Equity	8
Consolidated Statement of Cash Flows	9
Notes to the Financial Statements	10
Directors' Declaration	25
Auditor's Independence Declaration	26
Independent Auditor's Review Report to the members	27

This half-year financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2021 and any public announcements made by Australian Finance Group Limited during the half-year reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

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For personal use only

Australian Finance Group Limited

Directors' report

For the half-year ended 31 December 2021

Half-year Report for the Period ending 31 December 2021

Reporting period is the half-year ended 31 December 2021 with the previous corresponding period to 31 December 2020.

Results for announcement to the market

	31 December	31 December	Increase /	% change
	2021	2020	(Decrease)
	$'000	$'000	$'000
Revenue from continuing operations	469,731	357,249	112,482	31.5%
Net profit for the period	30,033	24,967	5,066	20.3%
Underlying results from continuing operations	25,964	24,880	1,084	4.4%
Net tangible asset backing per ordinary security
("NTA") (Cents)	(351.7)	(307.9)	(43.8)	14.2%
Net tangible asset backing per ordinary security
("NTA") including Trail book contract asset (Cents)1	64.8	66.9	(2.1)	3.1%

1 In line with ASIC guidance NTA is shown without the inclusion of the trail book asset (contract asset) and right of use asset but including the associated trail commission payable. However, given the significant value of the trail book and its interrelationship with the trail book liability, NTA including the trail book asset has also been calculated and disclosed for both the current period to 31 December 2021 and the prior period to 31 December 2020.

Dividends	Amount per	Franked Amount per
	security	security
Interim dividend	7.0 cents	100%
Previous corresponding period interim dividend	5.9 cents	100%
Record date for determining entitlements to the interim dividend	8 March 2022
Date the interim dividend is payable	24 March 2022

Further results commentary and other significant information needed by an investor to make an informed assessment of our results are included in the accompanying half-year report.

This report is based on the consolidated half-year report which has been subject to a review by an independent auditor, Ernst & Young.

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For personal use only

Australian Finance Group Limited

Directors' report

For the half-year ended 31 December 2021

The Directors submit the consolidated financial report of Australian Finance Group Limited ('the Company'), and its controlled entities ('the Group'), for the half-year ended 31 December 2021 and the auditor's report thereon.

Directors

The names of the Directors of the Company at any time during or since the end of the half-year are set out below. Directors were in office for the entire period, unless otherwise stated:

Name
Mr Tony Gill	Ms Melanie Kiely
Mr Brett McKeon	Ms Jane Muirsmith
Mr Malcolm Watkins	Mr Greg Medcraft (appointed 15 September 2021)
Mr Craig Carter	Ms Annette King (appointed 1 February 2022)

The above-named Directors held office during or since the half-year.

Financial results

For the half-year ended 31 December 2021 the Group recorded a net profit after tax of $30,033k recording an increase of 20.3% over the same period in 2020.

Review and results of operations

Residential settlements were up 47% on prior period with revenue from the aggregation segment up 35% and revenue overall up 31.5% to $469,731k (2020: $357,249k)The AFG Securities loan book increased 36.1% and AFG Home Loans white label settlements were 46% higher on prior period.

Profit after income tax for the half-year ended 31 December 2021 was up 20.3% on the prior comparative period at $30,033k (2020: $24,967k). Underlying results from continuing operations were up 4.4% when compared to the prior comparative period at $25,964k (2020: $24,880k).

The increase in profit was attributable to the following:

• Securitisation programme net interest income being up 17% to $25.1M (2020: $21.4M) and the loan book
  increasing 36.1% to $4.03B (2020: $2.96B);
• Residential settlements increased by $9.9B to $30.8B (2020: $20.9B);
• Increased residential trail book to $173.8B (2020: $160B);
• AFGHL loan book increased $1.5B (14.1%) to $12.2B (2020: $10.7B);
• Commercial settlements increased by $804M (83.2%) to $1.8B (2020: $967M).

Net cash flows from operating activities decreased 42.2% to $14,895k (2020: $25,788k). This was due to the reversal of a strong positive working capital movement in June 2021 as large commission payments were received and paid out in July 2021.

On 22 December 2021, the Group acquired a 75% stake in leading asset finance aggregator, National Finance Alliance Pty Ltd, trading as Fintelligence. The Group paid $54.6M for the purchase of 75% of Fintelligence, funded primarily by a new corporate debt facility.

COVID-19, as well as measures to slow the spread of the virus, have had a significant impact on global economies and equity, debt and commodity markets. The Group has considered the impact of COVID-19 and other market volatility in preparing the financial statements.

The 31 December results included a provision for Expected Credit Loss (ECL). The ECL provision has reduced to $2,877k for the half year ended 31 December 2021 (2020: $3,243k). Impairment charges are discussed further in Note 7 of the 2021 Half Year Report.

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