Fiducian Group (ASX: FID) Reports Solid H1 FY 2025 Results

It is now almost exactly one year since I made Fiducian Group (ASX: FID) an official buy recommendation at around $6.50, after the H1 FY 2024 results, in part because “even just the more modest organic growth would be enough to justify the current share price.” Therefore, it was very pleasing to see the company report record profit and revenue for H1 FY 2025. The share price gained around 10% in response to these results.

Revenue was up 14% to $44.3 million, while net profit after tax was up 26% to $8.6 million. The underlying net profit after tax (on which the dividend is based) was up 20% to $9.9 million, which amounts to 31.9 cents per share. Just under 70% of that will be paid out in the interim dividend worth 21.9 cents. At the current price of $10, that puts Fiducian Group on a trailing yield of about 4.3%, fully franked, worth about 6.1% when grossed up for franking credits. As you can see below, Fiducian Group continues to deliver on its plan to increase dividends over time.

I won’t repeatedly summarise what each segment does, because I already did so in the recent FY 2024 Results coverage.

Diving a little deeper, we can see that the hero segment in this half was the funds management business, which benefitted from strong inflows. The platform business did not achieve a record half, although I do note it typically has a stronger second half, so with any luck it will still achieve a record year. These businesses are supported by the less profitable financial planning business, which had a decent half.

The key takeaway for me is that these are relatively good times for Fiducian, which mostly just reflects the fact that markets are buoyant. If market momentum reverses, you could easily see Fiducian go backward in the future. It has happened before and will likely happen again. 

Funds under administration using the Auxilium and badged products grew from $102 million at June 2024 to about $135 million, according to the answer to my question on the conference call. I think that growth is a little disappointing and shows how much trouble Fiducian is having in selling this product. 

Executive Chairman Indy Singh said the company has 4 salespeople who “go and meet advisers and sell Auxilium, we are late in this market so we have to do something extra, the competitors are the ones you know and we’re actually winning business from them.”

I’m not quite sure if this approach is working well enough, I think that they probably need to get some good customer success stories online and do some marketing, because growth is fairly slow right now. 

Fiducian Valuation

Fiducian is no longer as attractively priced as when I recommended it, but it is still fairly attractively priced. I consider Fiducian a dividend stock that should grow over time, and its trailing twelve-month yield is about 4.27% fully franked at the current price of $10.05. This compares to 5.5% at the time of the recommendation. 

The company’s free cash flow was solid at just over $8m, some 93% of statutory profit. Its balance sheet remains strong, with net cash of $28.9 million and no debt. With a market capitalisation of $288 million and little liquidity, Fiducian remains relatively under the radar.

I have considered moving Fiducian to hold based on valuation, but generally speaking, doing that doesn’t add very much value, because good businesses run by honest and competent management tend to outperform over the long term. And I think Fiducian Group fits that description. 

While I like the Fiducian share price a little less at today’s price than at a 5.5% trailing yield it boasted in the past, if I didn’t own any shares, I would still buy some today. 

Disclosure: the author owns shares in FID and will not trade FID shares for 2 days following this article. This article is not intended to form the basis of an investment decision. Any statements that are advice under the law are general advice only. The author has not considered your investment objectives or personal situation. Any advice is authorised by Claude Walker (AR 1297632), Authorised Representative of Ethical Investment Advisers Pty Ltd (ABN 26108175819) (AFSL 343937).

The information contained in this report is not intended as and shall not be understood or construed as personal financial product advice. You should consider whether the advice is suitable for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement. Nothing in this report should be understood as a solicitation or recommendation to buy or sell any financial products. A Rich Life does not warrant or represent that the information, opinions or conclusions contained in this report are accurate, reliable, complete or current. Future results may materially vary from such opinions, forecasts, projections or forward looking statements. You should be aware that any references to past performance does not indicate or guarantee future performance.