Generation Development Group shares jump on profit surge
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More news: Shares in Generation Development Group (GDG) jumped 7.22% to $6.83 by 12:30pm AEST after it posted a 170% increase in its underlying net profit.
During an investor call, GDG chief executive Grant Hackett said one of the reasons for Lonsec’s on-demand ratings was due to the surge in private credit interest.
“Overall, it's been a really strong season. Private credit's kind of the flavour of the year, we'll call it, for Lonsec. So there was a lot of demand in that space.
“And I think, you know, product manufacturers, fund managers, bringing out new strategies, etc., they understand the value of that research ratings and how critical it is for them to get onto APLs [approved product lists].”
Hackett noted that Lonsec had a high filtering system with ratings and did not rate every single product. He said the troubled Shield Master Trust came to Lonsec for research but did not make it past the first round of filters.
“We've got a very clear sort of filtering process that we take on around track record, whether it's with the firm or the fund, any related party issues, governance issues, aggressive mandates with kind of max limits. Also, [if] the portfolio is still being built out or or not even put in place yet,” he said.
“So we're very, very conscious of not growing for the sake of growth. The integrity of that business is absolutely critical.”
GDG chief financial officer Terrence Wong said division 296 was a “once in a lifetime opportunity” for its investment bond business.
“I would expect that over the course of FY26, we'll be making a big investment into that space and really capitalise on that,” Wong said.
“We'll see some of the benefits flow through in and probably even further increases in sales in FY26, but the real benefits will really come through FY27, FY28, but the investments we will make in FY26 to capitalise on that.”
GDG FY25 profit sharply rises on acquisitions, investment bond growth
The news: Generation Development Group (GDG) has posted an underlying net profit of $30.2 million for FY25, up 170% from FY24.
The numbers: Its statutory net profit surged 555% to $38.2 million. This includes Evidentia’s earning contributions from 18 February 2025 when GDG acquired the company.
The key contributors to the company’s profit lift included strong earnings growth driven by strong funds under management growth of 33% to $4.4 billion for investment bonds, full year earnings for Lonsec Holdings, and earnings contribution from Evidentia.
Funds under management for managed accounts across Lonsec and Evidentia were at $29.6 billion by June 2025. It noted that Lonsec’s earnings were driven by on-demand ratings, up 46%.
The board also declared a final dividend of 1 cent per share, in line with last year.
The context: GDG said investment bonds would benefit from legislative tailwinds given by the government’s proposed double tax rate on earnings of superannuation balances above $3 million — division 296.
During the 2025 financial year, GDG acquired the shares it did not already own of Lonsec, acquired Evidentia and formed a strategic alliance with BlackRock. It then restructured to merge the Lonsec Investment Solutions managed account business with Evidentia.
The source: ASX
