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Judo Capital Holdings Ltd (ASX:JDO) is making headlines this Tuesday, with its shares jumping 11% to a two-year high of AU$1.54. This significant rise follows the release of the small business lender’s fiscal year 2024 (FY24) results, which have clearly impressed investors.
For the year ending June 30, Judo Capital reported a notable 20% increase in gross loans and advances (GLA), reaching AU$10.7 billion. This growth not only met but exceeded the company’s previous guidance, reflecting a threefold increase in system lending. The robust expansion was driven by Judo’s strategic regional growth, which included the establishment of four new locations and the recruitment of 21 additional relationship bankers over the past year.
Looking ahead, Judo Capital is setting ambitious targets for FY 2025. The company plans to open another 10 locations and hire an additional 20 bankers.
Despite the positive overall performance, Judo Capital saw a 35 basis point decrease in its net interest margin (NIM), falling to 2.94%. This decline, while notable, was better than the company’s guidance range of 2.85% to 2.90%. Moreover, the company’s margin outlook for FY 2025 appears promising. Judo Capital reported achieving a record lending growth month in June with an average margin of 4.5%. Additionally, its loan pipeline—comprising applications, approvals, and acceptances—hit an all-time high of AU$1.8 billion at the end of June, maintaining an average margin of 4.5%.
On the profitability front, Judo Capital’s underlying profit before tax (PBT) increased by 2% to AU$110.1 million, aligning with the company’s guidance. This growth is attributed to above-system lending performance at strong margins, effective cost management, and a strategic shift in the bank’s funding mix. However, statutory profit before tax saw a slight decrease of 3%, settling at AU$104.3 million.
Overall, Judo Capital Holdings’ impressive performance and optimistic outlook have resonated well with investors, driving its share price to new heights. With plans for further expansion and a strong pipeline, the company is poised for continued growth in the coming fiscal year.
