Full Year 2024 HMC Capital Ltd Earnings Call Transcript
Key Points
- HMC Capital Ltd (HMCLF) achieved a record financial result in FY24, with total revenue up 42% to $189.5 million.
- Funds under management grew by 30% to $12.7 billion, demonstrating strong growth in the company's asset base.
- Over 50% of revenue came from high-quality recurring funds management income, which grew by 37% year on year.
- The operating margin increased to 68%, reflecting the highly profitable nature of the business.
- The company is well-capitalized with $1.4 billion of balance sheet liquidity and over $2.5 billion of investable dry powder across its funds management platform.
- Despite strong financial performance, there were unrealized fair value losses on investments in the second half of FY24.
- The capital solutions income was negative $0.7 million for FY24, indicating some volatility in this revenue stream.
- The company has not yet found the right opportunity for its global healthcare strategy, indicating potential delays in this area.
- There are concerns about potential conflicts of interest in co-investing in higher returning investments, although the company is working to mitigate these.
- The integration of recent acquisitions, such as Payton Capital, is still ongoing, which may pose operational challenges.
Good morning and thank you for joining today's call. With me on the call Group CFO, Will McMicking; and Group Head of Strategy and Investor Relations, Misha Mohl.
Before we commence, HMC would like to acknowledge the traditional custodians of country throughout Australia and celebrate their diverse culture and connections to land, sea and community. We pay our respects to their elders past and present and extend that respect to all Aboriginal and Torres Strait Islander people today.
I start this morning's presentation on slide 4 with an overview of our financial year '24 results. I'm pleased to report that our business achieved a record financial result in financial year '24. This result was underpinned by new revenue streams and significant growth in recurring earnings.
Funds under management grew at year end to $12.7 billion, which is up 30% on last year. Our total revenue of $189.5 million was up 42%. Pleasingly, over 50% of our revenue came from high quality recurring funds
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