Key financial highlights of 1H24 results

E&P Financial Group Limited (ASX: $EP1) has released its 1H24 results for the six months ending 31 December 2023. The company reported a net revenue of $67.5 million, reflecting a 28% decrease compared to the prior comparable period. The Underlying EBITDA resulted in a loss of $4.7 million. E&P Wealth division showed consistent revenue growth, up 6% on the prior comparable period, with underlying EBITDA up 64% on the prior comparable period. However, the company reported a statutory loss after tax of $26.3 million, primarily due to non-cash goodwill impairment of $19.3 million in E&P Capital. The company retained a conservative balance sheet with a cash balance of $38.8 million and no debt as at 31 December 2023. No interim dividend was declared given the 1H24 financial performance.

Executive commentary on 1H24 results

Managing Director and CEO, Ben Keeble, stated, 'Significant progress was made during the period across key objectives relating to the legacy issues, leadership transition, and simplification of E&P Funds. However, challenging market conditions impacted the level of activity in our transactional businesses as foreshadowed at the time of the AGM. The Group reached a conditional settlement of the representative proceeding against EP1, DASS, and former Directors, which, if approved on 3 April 2024, will be an important milestone for EP1. Importantly, the actions taken in prior periods to simplify much of the Group's operations have positioned the Group in a growth trajectory that is expected to deliver scale benefits.'

Summary of 1H24 results and outlook

E&P Financial Group's 1H24 results reflect a challenging market environment, with a significant decrease in net revenue and a statutory loss after tax primarily due to non-cash goodwill impairment. The company's E&P Wealth division showed consistent revenue growth, while E&P Capital faced challenges specifically impacting Corporate Advisory transaction volumes. The company outlined three key areas of strategic focus for the future, including accelerating client and FUA growth in E&P Wealth, delivering on the Group's investment in the E&P Capital platform, and accelerating external FUM growth in the Claremont Global strategy. The company anticipates an improvement in trading conditions in the second half of 2024 relative to the first half. While no interim dividend was declared, the Board remains committed to its full-year dividend policy payout ratio of 75% to 85% of NPATA over time in a normal operating environment.