Helia Reports $133.7M Statutory Profit, Declares Special Dividend Amid Contract Losses

Strong Financial Performance Amidst Market Shifts

Helia Group Limited has delivered a standout first half for 2025, posting a 38% increase in statutory net profit after tax to $133.7 million. Underlying profit, which excludes unrealised investment gains, also rose a healthy 18% to $126.1 million. This robust performance underpins the company’s confidence in declaring a fully franked interim dividend of 16.0 cents per share, up 7% year-on-year, alongside an unfranked special dividend of 27.0 cents per share, a notable move reflecting strong capital generation.

CEO Michael Cant highlighted Helia’s ongoing role in supporting Australian home ownership, with over 13,000 customers assisted in the half-year period. This achievement comes despite a backdrop of economic headwinds, including a modest rise in unemployment and a cautious Reserve Bank of Australia easing cycle aimed at stimulating growth.

Navigating Policy and Contractual Challenges

While the financials impress, Helia faces significant strategic challenges. The Federal Government’s proposed expansion of the Home Guarantee Scheme (HGS) is expected to channel the majority of first home buyers through this government-backed program from FY26. This policy shift threatens to erode Helia’s new business volumes, particularly as first home buyers accounted for 25-30% of its gross written premium in the first half.

Compounding this, two major mortgage lenders, Commonwealth Bank of Australia (CBA) and ING, have signalled moves to alternative lenders mortgage insurance providers starting next year. CBA, representing 40% of Helia’s gross written premium, has already contracted with a competitor, while ING is in negotiations. Helia did secure a contract renewal with another top-10 lender, but the loss of such significant partners underscores the evolving competitive landscape.

Strategic Review and Capital Management

In response, Helia’s Board has initiated a comprehensive strategic review to explore options that will best position the company for future growth and shareholder value maximisation. This review is timely given the anticipated gradual financial impact of reduced new business volumes, as revenue from in-force policies is recognised over a 15-year period.

Capital management remains a strong suit for Helia, with a prudential capital adequacy ratio of 2.30 times, comfortably above regulatory requirements. The company’s decision to pay a substantial special dividend in lieu of share buybacks reflects a flexible approach to returning capital to shareholders amid uncertain market conditions.

Outlook and Market Position

Looking ahead, Helia has raised its full-year insurance revenue guidance to between $350 million and $390 million, buoyed by strong first-half results. Claims experience remains favourable, with total incurred claims expected to stay negative, well below historical averages. However, the company acknowledges that the evolving policy environment and lender dynamics will require agility and innovation to sustain market share.

Helia’s ability to simplify operations and pursue new customer opportunities will be critical as it adapts to a more competitive and policy-driven landscape. Investors will be watching closely for updates from the ongoing strategic review and any shifts in contract wins or losses among major lenders.