Stable Leverage, Rising Dividends: What’s Next for Liberty Group?
Liberty Group has reported a solid 16% rise in statutory net profit after tax for FY25, alongside a 10% increase in underlying earnings and a new special dividend announcement.
- 16% increase in statutory NPAT to $133 million
- 10% growth in underlying NPATA to $145 million
- Financial assets edged up to $14.7 billion
- Final unfranked distribution of 19.92 cents per security
- Second fully franked special dividend of 15 cents per security
Strong Earnings Growth Amid Steady Asset Base
Liberty Group (ASX, LFG) has delivered a robust financial performance for the year ended 30 June 2025, reporting a 16% increase in statutory net profit after tax (NPAT) to $133 million. This marks a notable improvement from the previous year’s $115 million, reflecting the company’s ability to grow earnings despite a relatively flat leverage ratio.
Underlying net profit after tax and before amortisation (NPATA), which excludes non-recurring and non-cash items, rose by 10% to $145 million. This metric offers a clearer view of the company’s operational profitability and suggests that Liberty’s core businesses are gaining momentum.
Modest Asset Growth and Stable Leverage
The company’s financial assets increased slightly by 1% to $14.7 billion, indicating a steady expansion of its lending and investment portfolio. Meanwhile, the leverage ratio remained unchanged at 13.6 times, signaling that Liberty has maintained its capital structure discipline amid growth.
Liberty’s underlying cash return on equity improved to 12.1%, up from 11.2% in the prior year, underscoring enhanced efficiency in generating returns for shareholders.
Dividend Strategy Reflects Confidence
In line with its strong earnings, Liberty announced a final unfranked distribution of 19.919276 cents per security for the seven-month period ending 30 June 2025. This distribution will be paid on 29 August 2025 to securityholders on record as of 30 June.
Additionally, the company declared a second fully franked special dividend of 15 cents per security, payable on 15 September 2025 to securityholders on record as of 29 August. This special dividend signals management’s confidence in the company’s cash flow and capital position.
Outlook and Market Position
Liberty Group remains a diversified finance player across Australia and New Zealand, with interests spanning residential and commercial mortgages, motor vehicle finance, personal and business loans, broking services, insurance, and investments. Having raised over $51 billion in global capital markets since 1997, the company’s steady growth and disciplined financial management position it well for future opportunities.
While the announcement does not provide explicit forward guidance, the combination of earnings growth, stable leverage, and shareholder-friendly dividends suggests Liberty is navigating current market conditions effectively.
Bottom Line?
Liberty’s FY25 results reinforce its steady growth trajectory, but investors will watch closely for signs of how it plans to sustain momentum amid evolving market dynamics.
Questions in the middle?
- What are the key drivers behind the 10% increase in underlying NPATA?
- How will Liberty balance growth ambitions with its stable leverage ratio going forward?
- What factors influenced the decision to issue a fully franked special dividend now?
