GDG’s Profit Soars 170% on Acquisitions and Market Growth
Generation Development Group (GDG) reported a striking 170% jump in underlying net profit after tax for FY25, driven by strong revenue growth and strategic acquisitions. The company’s expanding funds under management and new partnerships signal robust momentum ahead.
- Underlying net profit after tax rises 170% to $30.2 million
- Revenue nearly triples to $141.3 million
- Investment Bond funds under management grow 33% to $4.4 billion
- Acquisitions of Lonsec Holdings and Evidentia bolster earnings
- Strategic alliance formed with BlackRock to expand annuity offerings
Strong Financial Performance
Generation Development Group (ASX – GDG) has delivered a remarkable financial performance for the year ended 30 June 2025, with underlying net profit after tax soaring 170% to $30.2 million. This surge was underpinned by a near tripling of revenue to $141.3 million, reflecting both organic growth and the impact of recent acquisitions.
The company’s Investment Bond funds under management (FUM) grew by 33% to $4.4 billion, a key driver of earnings. This growth was complemented by a 38% increase in Lonsec’s managed account FUM, which rose from $10.7 billion to $14.8 billion, further strengthening GDG’s asset base.
Strategic Acquisitions and Alliances
GDG’s acquisition of Evidentia in February 2025 and the completion of full ownership of Lonsec Holdings in August 2024 have been pivotal. These moves expanded GDG’s footprint in managed accounts and research capabilities. Notably, Lonsec Research saw a significant shift towards on-demand product ratings, with 64% of new ratings delivered this way, up from 46% the previous year.
In May 2025, GDG also formed a strategic alliance with BlackRock to develop a new Holistic Retirement Solution, signaling a push into annuity products. This partnership is expected to leverage BlackRock’s global expertise and GDG’s local market presence to capture growing retirement income demand.
Capital Position and Dividend
GDG remains well capitalised with a healthy cash balance of $107 million as of 30 June 2025. The company declared a final dividend of 1 cent per share, reflecting confidence in its cash flow and ongoing profitability. The strong earnings performance from Lonsec is expected to trigger earnout payments close to the maximum agreed amount, highlighting the success of the acquisition strategy.
Outlook and Market Position
Looking ahead, GDG is optimistic about sustaining sales momentum across its Investment Bonds and Managed Accounts. The company anticipates benefiting from legislative changes, including a proposed double tax rate on earnings of superannuation balances above $3 million, which may drive demand for investment bonds.
GDG plans to continue expanding Lonsec’s research capabilities and Evidentia’s product offerings and distribution reach. The integration of Lonsec and Evidentia into a unified managed account business, effective from July 2025, aims to streamline operations and enhance client service.
Overall, GDG’s strategic acquisitions, strong capital position, and new partnerships position it well to capitalize on evolving market opportunities in the financial services sector.
Bottom Line?
GDG’s robust FY25 results set the stage for accelerated growth, but integration and legislative impacts will be key to watch.
Questions in the middle?
- How will GDG’s alliance with BlackRock translate into market share gains in annuities?
- What are the risks and timelines associated with integrating Lonsec and Evidentia?
- How might upcoming legislative changes concretely affect GDG’s Investment Bond sales?
