Finexia Financial Group Limited (ASX: FNX), a dynamic player in the financial services sector, is pleased to present a positive market update.
Our underlying operational businesses have exhibited robust performance, generating commendable positive cashflow in the initial half of the fiscal year. Anticipated momentum in earnings is on the horizon for the latter half of FY23, driven by two key factors. Firstly, the finalization of the proposed Stayco acquisitions is poised to enhance the company's profit performance. Secondly, the expansion of our Childcare Fund will be reflected in the financials during the concluding 6 months of FY23.
The Board maintains confidence in the previously provided guidance to the market, projecting an operating profit of approximately A$4.3M for FY23. Our unwavering focus on the cash-generating operations of our businesses ensures a robust cash position by June 30, 2023. The commitment to distributing 30-40% of the Group's profit this year hinges on maintaining our current profit trajectory and reinforcing our cash position.
A glimpse into our operational progress reveals the following key updates:
The Finexia Direct Accommodation Income Fund (‘Stayco’) has exhibited strong performance, particularly during the peak holiday season, with forward bookings extending seamlessly into Easter. Recent initiatives by Stayco's management, such as expanding the available letting pool and implementing a marketing program to boost overall room night sales, aim to enhance the resort operator's profitability.
The eagerly anticipated Stayco acquisitions are scheduled for completion in February 2023, promising a significant revenue boost for the Group leading up to June 30, 2023. Projections indicate that Stayco will contribute approximately A$2.30M to the Group through a gross distribution for FY23.
Our long-term core strategic initiative, the Finexia Childcare Centre Incubation Fund (‘Fund’), was recently launched to both retail and wholesale investors. The Fund focuses on financing experienced childcare operators, offering secured funding lines to support their growth and stabilization during the 'trade-up' phase. Currently, the Fund is delivering a noteworthy 9.75%pa return to investors through a monthly cash distribution. In a short span, the Fund has secured additional funding commitments totalling A$55M, with a promising pipeline that could see A$70M in assets under management (AUM) by the close of CY23, further solidifying our recurring revenue position.
While mindful of the broader economic challenges, especially with an anticipated interest rate-induced slowdown in 2023, we are attuned to opportunities. The evolving landscape has presented avenues to expand our private credit operations, capitalizing on opportunities in both lending and potential acquisitions.
A comprehensive update will be shared when the Company reports its half-year results on February 24, 2023.
Authorized for release by the Board of Directors.