MFF’s Profit Rally Signals Strength but Market Risks Loom Ahead
MFF Capital Investments Limited has reported a striking net profit after tax of $381.5 million for the half year ended December 31, 2024, more than doubling last year’s result. The company also announced an increased fully franked interim dividend of 8 cents per share, underscoring its robust financial position and growth trajectory.
- Net profit after tax rises 161% to $381.5 million
- Pre-tax profit climbs to $544.9 million from $208.5 million
- Net tangible assets increase 17% to $2.42 billion
- Interim dividend raised to 8.0 cents per share, fully franked
- Montaka Global acquisition expected to complete in February 2025
Strong Half-Year Financial Performance
MFF Capital Investments Limited (ASX: MFF) has delivered a commanding financial performance for the half year ended 31 December 2024, reporting a net profit after tax of $381.5 million. This represents a 161% increase compared to $146.0 million in the prior corresponding period. The pre-tax profit similarly surged to $544.9 million, up from $208.5 million a year earlier.
The company’s net tangible assets (NTA) also strengthened significantly, rising 17% to $2.42 billion as at 31 December 2024, compared with $2.07 billion at 30 June 2024. On a per share basis, the pre-tax NTA increased to $5.083, while the post-tax NTA rose to $4.161, reflecting solid capital growth and portfolio appreciation.
Dividend Increase Reflects Confidence
In line with its strong earnings, MFF declared a fully franked interim dividend of 8.0 cents per share, up from 6.0 cents in the prior year. The dividend, payable on 14 May 2025, underscores the company’s commitment to delivering income alongside capital growth. The Dividend Reinvestment Plan (DRP) and Bonus Share Plan (BSP) will operate at zero discount, providing shareholders with flexible options to increase their holdings.
Portfolio and Market Commentary
The company’s results are principally driven by mark-to-market gains on its investment portfolio, which is concentrated in high-quality, internationally listed equities. The portfolio manager highlighted the sustained compounding of unrealised gains and the importance of maintaining a disciplined, long-term investment approach amid fluctuating equity and currency markets.
Notably, MFF’s portfolio remains focused on exceptional businesses with competitive advantages and sustainable growth prospects. The company continues to manage portfolio liquidity prudently, holding over $600 million in capacity to capitalize on future opportunities.
Strategic Acquisition on the Horizon
Looking ahead, MFF is set to complete the acquisition of Montaka Global Investments in February 2025. Montaka manages ASX-listed funds known for recent outperformance, and while the immediate financial impact is expected to be immaterial, the acquisition aligns with MFF’s strategy to deepen investment expertise and enhance long-term returns.
The company remains cautious about market valuations and regulatory risks but expresses optimism about the potential for disciplined active management to generate compound growth over the coming decade.
Bottom Line?
MFF’s robust half-year results and strategic moves position it well for sustained growth, but investors should watch how market dynamics and the Montaka acquisition unfold.
Questions in the middle?
- How will the Montaka Global acquisition influence MFF’s portfolio composition and returns?
- What risks might arise from rising regulatory pressures and elevated market valuations?
- Can MFF sustain its strong dividend growth amid potential market volatility?
