AFG Profit Soars 39% to $49M in FY26

Australian Finance Group (ASX:AFG) reported a robust financial performance for FY26, with its net profit after tax (NPAT) surging by 39% to $49 million. Underlying net profit after tax and amortisation (NPATA) also climbed significantly, rising 33% to $54 million.

Key FY26 Performance Metrics

• NPAT: Up 39% to $49 million
• Underlying NPATA: Rose 33% to $54 million
• Manufacturing Loan Book: Grew 30% to $7.1 billion
• Distribution EBITDA: Reached $71 million

The growth was primarily fueled by strong performances in both the company’s Distribution and Manufacturing segments. AFG’s operating efficiency saw notable improvements, with underlying Return on Equity increasing to 23% and the cost-to-income ratio falling to 55%.

Segmental Strength and Broker Network Growth

The Distribution segment remained a pivotal contributor, generating $71 million in EBITDA. Residential settlements within this segment expanded by 18%, reaching $75 billion for the period.

• Broker Network: Expanded to over 4,300 brokers
• Customers Served: Exceeded 600,000
• Broker Services Income: Increased 13% to $24 million, marking eight consecutive years of growth

In the Manufacturing segment, the loan book achieved a record expansion of 30%, now standing at $7.1 billion. This segment also reported an underlying return on equity of 30% and a net interest margin of 125 basis points.

Cash Flow and Shareholder Returns

AFG generated $51 million in operating cash flow, demonstrating a strong 94% cash conversion rate. The company concluded FY26 with $63 million in unrestricted cash, allocating capital towards reinvestment, broker investments, and shareholder returns.

• Final Dividend: 4.8 cents per share (fully franked)
• Total FY26 Dividend: 9.5 cents per share
• Payment Date: 1 October 2026
• Share Buy-back: $3 million

Outlook Amidst Market Shifts

Looking ahead to FY27, Australian Finance Group anticipates a larger lending book, projecting an estimated $13 million annualised EBITDA uplift from its FY26 investments. While residential lodgements have softened due to tax policy changes and evolving interest rate expectations, underlying housing demand persists across the market.

The company expects its extensive broker network to be instrumental in assisting borrowers to navigate these changing market conditions effectively. Approximately 90% of AFG’s earnings now originate from recurring or diversified income streams, strengthening its earnings base.