19/06/2017 - 14:20

AFG upgrades profit forecast

19/06/2017 - 14:20

Bookmark

Save articles for future reference.

Australian Finance Group announced today its net profit for the current financial year would come in nearly 45 per cent higher than consensus forecasts, after a change in the way its treated certain commission income.

AFG upgrades profit forecast
AFG shares were 13 cents, or 10.8 per cent, higher at $1.33 at midday.

Australian Finance Group announced today its net profit for the current financial year would come in nearly 45 per cent higher than consensus forecasts, after a change in the way its treated certain commission income.

The company said net profit for the year to June 30 would be between $37 million and $37.8 million, compared with a consensus forecast of $25.5 million.

The upgrade followed a change in accounting treatment of its AFG Home Loans 'white label' mortgage products.

The company said there was now sufficient history and data to enable an actuarial estimate of future customer behaviour, and therefore future trail commission revenue.

The updated treatment of the 'white label' home loans has brought them into line with the actuarial treatment of the trail commission from AFG's residential business.

The company said the new accounting treatment would have no impact on cash profit or dividends paid for FY17.

AFG shares bounced nearly 10 per cent higher after the announcement before closing just 2.5 per cent up at $1.23.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options