Judo Capital Holdings Ltd (ASX: JDO) has experienced a significant rise in its share price, climbing 11% to reach $1.54, a two-year high. This uptick comes on the heels of the company's robust FY 2024 financial results, which have caught the attention of investors.
For the fiscal year ending June 30, Judo Capital, an ASX financial stock, achieved substantial growth in its gross loans and advances (GLA), which surged 20% to a remarkable $10.7 billion. This growth was at the top end of the company's previously provided guidance, reflecting a threefold increase in system lending. This impressive performance underscores the effectiveness of Judo's regional expansion strategy and its ability to capture market share.
On the profitability front, Judo Capital reported an underlying profit before tax that increased by 2% to $110.1 million. This figure aligns closely with the company’s forecast and reflects the bank's strong performance and effective cost management. However, there was a slight decline in statutory profit before tax, which fell by 3% to $104.3 million. Additionally, the net interest margin (NIM) decreased by 35 basis points to 2.94%. Despite this decline, the NIM figure was better than the company’s anticipated range of 2.85% to 2.90%, indicating that the bank managed its interest rate exposure effectively.
Significant Developments and Strategic Moves
Throughout FY 2024, Judo Capital made notable strides in expanding its operations. The company successfully opened four new locations and onboarded 21 additional relationship bankers. These strategic moves are part of Judo’s broader plan to boost its lending capabilities and service a growing customer base. Looking ahead to FY 2025, Judo Capital plans to further expand its footprint by opening an additional 10 locations and hiring another 20 bankers. This expansion is expected to drive an acceleration in lending activities and enhance the bank’s market presence.
In June, Judo Capital achieved a record month of lending growth, with an average margin of 4.5%. The company’s loan pipeline, encompassing loans in various stages of application, approval, and acceptance, reached a historic high of $1.8 billion by the end of June, with an average margin of 4.5%. This strong pipeline and high margins are promising indicators for the bank’s performance in the upcoming fiscal year.
Management’s Commentary
Chris Bayliss, CEO of Judo Capital, expressed a positive outlook on the company’s performance and future prospects. He noted:
"FY24 has been another year of strong financial and operational performance, delivering to our guidance targets and achieving significant growth. We celebrated several key milestones this year, including our five-year anniversary as a fully licensed bank and surpassing $10 billion in lending. Judo is now firmly established as a major player in the Australian business banking market."
Bayliss highlighted the company's success in maintaining high performance and growth despite challenging market conditions. He attributed this success to the company’s strategic initiatives, including its regional expansion and robust relationship-based lending approach.
Outlook for FY 2025
Judo Capital has reaffirmed its optimistic guidance for FY 2025, targeting a 15% increase in profit before tax. Bayliss emphasized that the company is well-positioned to continue its growth trajectory and achieve its vision of becoming a leading SME business bank. The company’s relationship-based approach to lending, supported by its experienced relationship bankers, will continue to play a crucial role in supporting SMEs that are seeking to grow and invest in their businesses. Additionally, Judo Capital is committed to addressing any challenges faced by its customers and providing optimal solutions to support their needs.
With its strong performance in FY 2024 and an ambitious plan for the future, Judo Capital Holdings Ltd is poised for continued growth and success in the coming year. The company’s strategic initiatives and positive outlook have contributed to the impressive rise in its share price, reflecting investor confidence in its future prospects.