Finexia Financial set to go ex-dividend this week

After declaring FY23 as a transformational year for the company, Finexia Financial Group (ASX: FNX) CEO Neil Sheather says the company is about to mark another milestone with the payment of its first dividend to shareholders next month.

The specialist private credit provider is paying a 2c final dividend after posting a $3.21 million bottom-line profit for FY23 with the result buoyed by a surge in its core activities and interest-earnings assets.

With the ex-dividend date looming on 29 September for payment on 17 October, Sheather says the dividend is a significant step for the company that has mapped out a strategy for growth to position Finexia as a yield-driven investment for shareholders.

“Generating sustainable recurring cash profit has been a long-term goal for Finexia and our latest full-year profit has been pivotal in realising our ambitions to deliver sustainable dividend returns to investors,” says Sheather (pictured).

“The results have been built on a foundation of sound business pillars that we believe are broadly recession resistant, particularly the childcare sector.”

The ASX-listed company is a specialist private credit provider backed by funds-management experience and operates three business segments - Private Credit, Funds & Asset Management, and Equity Capital Markets.

Solid growth from each of these business segments helped drive Finexia’s profit growth in FY23, with the momentum continuing into the current year.

Among the flagship funds Finexia manages is the Childcare Income Fund which Sheather says is designed to satisfy the unmet funding demands of experienced childcare operators.

The fund primarily offers seasoned childcare providers a secure financial resource to acquire and or accelerate their activities during the 'trade-up' phase of new and existing childcare centres.

“The childcare sector is best described as recession resistant, courtesy of the increasing need for parents to be working and for the need for female participation in the workforce along with the significant financial support offered by governments, both state and federal,” says Sheather.

“As an essential service, from an investors point of view trying to keep ahead of inflation, the fund has secured strong investor support with a current annual return of 9.75 per cent in the form of a monthly cash distribution.”

Finexia is also invested in the southeast Queensland tourism accommodation market through The Stay Company Income Fund, which operates eight resort and holiday properties on the Gold Coast and Noosa with the portfolio expanding during the year following the acquisition of two new properties.

However, a significant increase in Finexia’s private credit loan book was a key driver of full-year revenue growth as the total amount drawn down over the year doubled compared with FY22.

Finexia’s revenues from core operations surged to $14.2 million in FY23 from $10.5 million a year earlier.

“Our performance is underpinned by the fact that 62 per cent of the company’s income is generated on a recurring basis,” says Sheather.

“This not only supports our strategy for growth, but also our commitment to maintaining a stable dividend payment to our shareholders.”

Finexia grew net assets to $16.7 million in FY23, up from $8.8 million a year earlier.

Despite raising $4.66 million through a rights issue, including the issue of 15.5 million new shares, net tangible assets per share ended 30 June 2023 at 31c, up from 14c a year earlier. Earnings per share at 8c dipped from 9.6c in FY22.

Finexia employs a group of highly experienced private credit and capital market professionals with decades of market experience specialising in debt financing, structuring and tailoring investment solutions across the client spectrum. The company has offices in Sydney, Queensland and San Francisco.