HMC Capital operating earnings tracking 90% ahead of FY24
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The news: HMC Capital shares gained in early trading on the ASX after the investment manager said its operating earnings at the start of FY25 are tracking nearly 90% above last year's result.
The numbers: HMC shares were up 4% to $12.76 by 10:25am AEDT, having more than doubled in value since January.
HMC said its annualised pre-tax operating earnings are currently tracking at 70 cents per share, 52% above the trading update it provided last month, and 89% ahead of its record FY24 result.
It said it was also "on track" to achieve its $20 billion assets under management (AUM) target in FY25.
The fund manager noted that it aimed to double its AUM in private credit to over $3 billion in FY25 and is looking to launch a listed private credit fund in 2025.
The context: Speaking at its annual general meeting today, HMC managing director and CEO David Di Pilla said the "major step up in earnings" was driven by the continued outperformance of its HMC Capital partners fund.
Di Pilla also said the establishment of its new real estate investment trust DigiCo REIT — which is expected to start trading on the ASX on 12 December — will generate "significant recurring and transaction income" in FY25, and see HMC target "around two thirds" of its earnings base from recurring sources.
Di Pilla told investors that DigiCo REIT's "landmark" initial public offering demonstrates HMC's ability to organically build new growth platforms via large-scale transactions. It adds $4.3 billion of assets under management, which will "meaningfully contribute" to HMC's earnings in the second half of the financial year, he said.
What they said: "I am confident DigiCo will be a major contributor to HMC's growth over the coming years as we look to capitalise on the highly attractive global thematic trends supporting this asset class," Di Pilla said.
The source: ASX announcement
