Resimac Group Limited (RMC.AX) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Resimac Group Ltd. 2025 Annual General Meeting. [Operator Instructions] I would now like to hand the conference over to your Chair today, Mr. Wayne Spanner. Please go ahead.

Thank you, and good morning, ladies and gentlemen. The time has just gone 9:30 a.m., and the Company Secretary has confirmed we have a quorum. And accordingly, I open and welcome you to the Resimac 2025 Annual General Meeting. On behalf of your directors, I acknowledge the Gadigal people of the Eora Nation as the traditional custodians of the land on which we are meeting here and pay my respects to their elders past, present and emerging. The Notice of the Meeting, together with the '25 financial annual report has been distributed to shareholders in the required time frame established by our regulators. My name is Wayne Spanner, and I'm your company's Chairman. I'm joined here this morning by my nonexecutive director colleagues, Susan Hansen, Warren McLeland and Caroline Waldron. Duncan Saville will be joining us in a few minutes. Also with us this morning is Heather Baister, our audit partner, representing Deloitte. Heather is available to answer any questions shareholders may have in relation to our audited financial statements. I also welcome the presence of a select group of our executives, including Pete Lirantzis, Resimac's CEO; James Spurway, CFO; Andrew Marsden, Chief Treasury Officer; and Peter Fitzpatrick, our Company Secretary. Pete, James, Andrew and Peter are available to respond to any questions from shareholders in relation to their specific areas of responsibility. I extend a very warm welcome to our key stakeholders in Resimac's ongoing success, including representatives from our key partner bankers, our private and institutional investors, both domestic and international, in our securitized bonds and our growing number of equity investors in our ordinary shares. Before I provide my Chairman's address to the meeting, I would like to advise that the Notice of Meeting has been sent to all shareholders and lodged with the Australian Securities Exchange on 17 October 2025. It's also been made available on the Resimac Group Limited website and hosted on the share registry website since that date. I will take the Notice of Meeting as read. The minutes of the last meetings of the shareholders of the company, which was the Annual General Meeting held on 19 November 2024, has been reviewed by the Board and signed by me as Chairman on 29 January 2025. The minutes are with the Company Secretary and available for inspection. Shareholders will be asked to consider three resolutions at this meeting. As Chairman of the meeting, I exercise my right pursuant to the constitution of Resimac Group Limited to request a poll on these resolutions. In order to provide you with enough time to vote, I will ask the registry representative to open voting and the poll for all resolutions now. The log-in instructions for the online voting portal are detailed in the Notice of Meeting and online voting guide. I will then read out the resolutions and allow time for shareholders to ask questions on the resolutions. You may vote on any resolution at any time before I close the poll at the end of the meeting. I will now proceed with my Chairman's address. As the Chairman appointed following last year's Annual General Meeting, I have focused this past year on engaging with our leadership team, reviewing strategic priorities and ensuring Resimac is equipped to meet the demands of a dynamic lending environment. FY '25 marks a significant milestone. We proudly celebrate Resimac's 40th year. Our 40 years of operation provide us with a strong foundation from which to pursue future growth in an efficient manner. We will leverage this extensive experience and our $15 billion loan book and our established market leadership in securitization. This was a year when the stabilizing macroeconomic backdrop characterized by easing monetary policy and improving inflation dynamics assisted recovery across our core segments. We were and remain encouraged by the early signs of renewed mortgage demand in the Australian economy, which we expect to translate into future growth for Resimac. Some comments in relation to our performance in the FY '25 year and the disciplined capital management. The group delivered a relatively good financial result for FY '25, delivering a 13% increase in normalized operating profit before impairment and tax of $78.6 million despite some of the challenges we faced. We achieved renewed momentum in the underlying business and reported a 12.5% return on equity in the second half of FY '25. We saw strong organic growth across both mortgages and asset finance with higher mortgage settlements and asset finance assets under management. The central focus of the Board this year was a disciplined capital management, resulting in significant return to shareholders. The total dividend paid was $0.19 per share. This comprised of $0.035 per share interim dividend and $0.035 per share final dividend and $0.12 per share special dividend declared in June 2025. The special dividend was a result of comprehensive strategic review of the group's operating assets and capital requirements, which determined that there was surplus capital not essential for supporting the group's strategic objectives. Furthermore, the sale of the surplus noncore ASX-listed financial assets realized a gain of $6.4 million. Strategic growth and our key acquisition. FY '25 was highlighted by an important strategic acquisition that markedly increased AUM and customer numbers. We successfully completed the acquisition and integration of Westpac Auto Finance portfolio in March. We believe this is evidence of our positive attitude towards future diversification and growth in the foreseeable future. Our ability to execute this growth is underpinned by robust funding strength reinforced by over $50 billion in securitization issuance over our 40-year history. This year, our banking relationships expanded, pushing aggregate funding limits beyond $10 billion. This year also brought some important changes to our leadership structure. In April 2025, we welcomed Pete Lirantzis as Chief Executive Officer. Given his previous role as Chief Operations, Product and Strategy Officer, Pete brings valuable continuity and insight. He's ideally placed to lead Resimac into its next chapter of growth and diversification, focusing on efficiency through digital transformation and modernization. The Board acknowledges and extends its sincere gratitude to Director, Susan Hansen, who served as Interim CEO from July 2024. Her dedication and leadership was essential during this critical transition period, which coincided with the integration of the Westpac Auto Finance acquisition. As we embrace innovation, the Board remains committed to robust governance, compliance and risk management. This year, we reviewed the composition of our committees and undertook an independent Board review to ensure we are aligned with the changing needs of the business. Our focus is squarely on driving a culture of accountability and outcomes in a high-performance environment. Finally, I wish to -- I also wish to sincerely thank my predecessor, former Chairman, Warren McLeland, who stepped down at the conclusion of last year's Annual General Meeting after 4 years of invaluable service. We're fortunate that he remains on the Board as Deputy Chair and Non-Executive Director, allowing us to retain his expertise. The Board is highly supportive of management's Board strategy for FY '26, which is centered on a back to the core intelligent lending approach. Our future strategy involves reinvesting responsibility in our home loans engine while building a high-quality balanced loan book. We are focusing on improving conversion rates, reducing turnaround times and uplifting our technology capability in the home loan business. Prioritizing the experience of customers and brokers who remain central to our growth through improved service, technology investment and deeper engagement, enhancing broker experience remains a top priority. Driving precision and efficiency, we must continue to challenge inefficiencies and embrace the transformative potential of Agentic AI automation. These technologies are foundational elements of how Resimac will operate, compete and create value by unlocking productivity gains. And in fostering culture, we are introducing a high-performance culture that thrives on innovation and agility, empowering our people with a culture that fosters responsiveness, execution and achievement. We are on a positive trajectory. I look forward to closely partnering with our CEO, Pete Lirantzis, as we continue to refine our strategy and investment plan, working with all stakeholders to build a stronger and more efficient Resimac. On behalf of my Board, I extend our sincere thanks to the management team and to all Resimac employees for their dedication and resilience. FY '25 presented challenges, but the organization responded with agility and purpose. I also personally add my thanks to my fellow Board members for their dedication and support. Thank you to our shareholders, our customers, brokers and funders for your continued support. We look forward to realizing our potential in the years ahead. And on that close, I'll now ask our CEO, Pete Lirantzis, to address the meeting.

Thank you Wayne. Good morning, everyone. Like Wayne, I'm pleased to welcome you all to Resimac Group's Annual General Meeting. Today, I will cover our main achievements for the past financial year and share our growth plan. 2025 was a year of steady progress at Resimac with our financial results reflecting continued growth and improvement in key areas. We diversified our existing Autos offering by acquiring the $1.5 billion Westpac portfolio in March. This contributed $4.5 million to our operating profit and added 100,000 customers to our database. We also experienced relatively strong organic growth in our core revenue generator, residential mortgages. This translated to the following financial outcomes, as Wayne has outlined. Normalized operating profit before impairments and tax rose 13% to $78.6 million, while return on equity improved 12.5% in the second half of financial year '25. Mortgage settlements grew 14%, lifting AUM to $13.4 billion for mortgages. Meanwhile, asset finance AUM rose 27% to $1.4 billion. In achieving these results, our settlements in home loans grew to $4.9 billion within the year. Within our Home Loans business, we are investing in new technologies, process and process improvements. This will unlock greater efficiencies and embed intelligent lending capabilities within our workflows. This will enable our key revenue generator to continue fueling our long-term growth and business diversification. In Asset Finance, settlements reached $900 million. We continue to take cautious approach to the SME sector, and we responded by refining our credit models and strengthening collections and recoveries capabilities within this business. These enhancements will continue in financial year '26 as we pursue disciplined, sustainable growth, ensuring these offerings are primed for scalable growth in the future. Both product lines are focused on improving broker engagement, reducing turnaround times and enhancing our technology capability to drive faster, smarter and better decisions. These are critical levers for improving broker and customer experience. Importantly, our funding capital costs have supported us throughout the reporting period, and Resimac continues to maintain a significant capacity of AUM growth. Over the past year, Resimac has executed multiple benchmark securitization transactions, totaling $4.3 billion in prime and nonconforming RMBS securities. These issuances attracted strong real money investors participating from both domestic and offshore accounts, reflecting the market's trust in our credit quality and operational strength. Since stepping into the CEO role, I've worked closely with the Board and our leadership team to refine our strategy and strengthen our capabilities. We refreshed our senior leadership team across operations, credit, technology, product, sales and distribution. This new talent is helping us uplift performance, accelerate innovation, improve how we service our brokers and our customers. Our purpose remains clear. We lend for life and business essentials. We are here to unlock lending possibilities for our customers and expand the product suite on offer for our brokers, providing access to the financial solutions that matter for the homes people live in and the assets that help businesses grow and operate. Our products are specifically designed to meet these core needs. The purpose is what drives our decision and shapes our future. As we celebrate 40 years of serving Australians, it's important to reflect on how far we have come. During this time, we have built a strong reputation as an experienced mortgage lender, while expanding our offering to include complementary lending products such as car and commercial asset finance. Looking ahead, we are pursuing a strategy centered around efficiency back to the core intelligent lending. In a competitive landscape where agility and insights are paramount, I firmly believe that lenders equipped with superior lending intelligence and an unwavering focus on efficiency will emerge as true winners. This philosophy underpins everything we do, and it's what drives our commitment to drive sustainable value for you, as shareholders. As we navigate the opportunities and challenges ahead, our strategy is anchored in a clear 5-point plan designed to propel long-term growth, enhance operational excellence and strengthen our market position. Number one, invest in our key revenue generator, the mortgage portfolio for long-term growth. Number two, embrace AI for smarter decisions, efficiency, productivity gains and value creation. Number three, improve the broker and customer experience to deepen relationships; number four, refine complementary products ready for scale. And number five, the most important, embed a high-performance culture to maintain, attract and foster the right mindset and behaviors in our people. The 5-point plan serves as a strategic guide, positioning Resimac for sustained success in a dynamic market. We have already started experiencing positive outcomes of these initiatives, supported by a strong dedication to security, compliance and governance. With also a strong funding capacity and disciplined liability management, we are well positioned to drive further growth and efficiencies. In closing, I want to acknowledge the efforts of our management team, employees and corporate partners. Your dedication has helped us turn challenges into opportunities and laid a solid foundation for what's ahead. I'd also like to thank our brokers, business partners and customers for their loyalty through the year. We are truly grateful. To our shareholders, thank you for your continued support. Your trust empowers us to evolve, innovate and grow. And finally, I'd like to express my gratitude to the Board for their continued support and guidance. I also look forward to partnering closely with our Chair, Wayne Spanner, as we strive to further advance Resimac. We are moving in a promising direction and the possibilities before us are genuinely exciting. It's an honor to start this journey with you. I look forward to collaborating as we pursue new opportunities and drive our business towards future success. Thank you.

Thank you, Pete. As previously advised, voting on all resolutions today will be conducted by way of a poll. In order to provide you with enough time to vote, I remind you that the online platform is open for voting on all resolutions. I will now move to the formal business of the meeting. The financial statements and reports. The first item of the business for this meeting is the receipt of the financial report for the year ended 30 June 2025. This item is not required to be voted on. I do now ask though, if there are any questions on the financial report.

Before I do this, I advise that we've not received any questions in advance by auditor. Do we have any questions on the online platform?

Yes, Chairman, we do. We have a number of general questions. First, should we just stick to the financial statement questions?

Okay. Do you want to [indiscernible].

Yes, so the first [indiscernible].

Yes.

Financial statements. A question from Mr. [ Stephen Mayne. ] When was the external audit last tendered? And when will it next be tendered?

So I don't think that's a question I should be answering certainly. If they ask a question on the financial statements, I'll pass that to James Spurway, your CFO.

So the last time the audit was tendered was back in 2010. I will note that Heather is up for rotation at the end of FY '26 being her last year of signing accounts. We will look to put out a tender most likely, which the Audit Committee can consider with her rotation.

Thank you, James. Are there any other questions?

Correct, questions on the financial statements?

I'll then go to are there any questions on the phone?

Thank you. There are no questions via the phone lines.

Thank you. I'll now go to the -- are there any questions that are general...

I can do general...

If you looked at into the general question...

Okay. Mr. [ Stephen Mayne. ] How many full-time equivalent staff do we currently have? And is this likely to fall over the coming 12 months with the rapid rollout of AI? Which parts of our business and operations are the most prospective for AI productivity gains? How energetically are we embracing these opportunities?

I might ask Pete Lirantzis to respond.

Thank you. Thanks for the question, [ Stephen. ] Just to start off with AI, we view AI as a complementary or companion technology to our staff. We're starting to enhance and embrace, as we said in our speeches, a lot of the AI and Agentic work. We see it impacting credit decisioning, customer service and our collections processes. How energetically, we've already started journeys with AI already in production and working with our customers. In a lot of cases, our staff are using AI to increase their productivity, increase the quality of our decisioning and looking at speeding up certain processes.

Thank you, Pete.

Another question from Mr. [ Stephen Mayne. ] The AFI's Joyce Malacus wrote an interesting column on July 11, mentioning our company and predicting that the Australian nonbank lending sector was fertile ground for a range of mergers, but she said this wasn't happening because several private equity players had unrealistic, say, expectations which of the companies mentioned in this column? Latitude, Humm, La Trobe, Scotpac, Liberty, Pepper Money, Firstmac are our major competitors in the corner of the nonbank lending market that we operate in? And are we open to any strategic play?

Thank you for the question. And I'll say upfront, the article is interesting. But I think as a matter of policy, it's clear that Resimac doesn't comment on rumors or online speculation in relation to any strategic plays. And I think that is appropriate in circumstances. We might go up to some other questions here.

Do you want to do the [indiscernible].