Liberty Financial are forecasting that their business will take a backward step in their core product, residential mortgage finance, ahead of their upcoming ASX listing.
In a detail that’s confounded the competition, Liberty have forecast a modest decline in their mortgage book over the year to June 2021, from A$8.45 billion in the last financial year to $8.42 billion at the end of the current one.
Liberty Financial finally released the prospectus for their IPO on Friday.
While it shows a projected decline in mortgage receivables, Liberty forecast revenue growth from the mortgage book of 3.2 per cent this year. This is well down on revenue growth of 19 per cent last year.
At the group level, the forecast pre-tax profit is $174.9 million for FY2021, up from $148 million in FY2020.
In FY2018 the pre-tax profit was $70 million and in FY2019 the profit was $76.1 million.
Liberty had financial assets of $11.7 billion at June 2020 and estimates its mortgage market share at 2 per cent. This is about twice the market share of AMP Bank and two-thirds that of ING Bank or Macquarie Bank.
Founded in 1997 by Sherman Ma (still an executive director), the Liberty Group is undertaking the IPO and ASX listing “to position it to pursue further growth opportunities in market segments in which Liberty has scale, as well as growth into emerging markets,” or so Richard Longes, the chair, asserts in his introductory letter for the prospectus.
Sherman Ma will maintain his 47.5 per cent shareholding post the IPO, an offer that allows an exit for Ma’s co-founders.
Liberty is selling shares in the IPO at $6.00, with a retail offer open from Friday.
Trading on the ASX is expected to commence on Thursday, 17 December at a nominal market capitalisation at the offer price of $1.82 billion.