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The diversified broking and non-bank lending group has released its annual report for the 2019 financial year, attributing 12.8 per cent revenue growth to its diversification strategy.
N1 Holdings Ltd (N1) has published its annual report for the 2019 financial year (FY19), in which it has recorded revenue growth of approximately $4 million, up 12.8 per cent from $3.6 million in FY18.
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The largest portion of its revenue came from mortgage broking trailing commissions (31.9 per cent), followed by commercial lending and interest revenue (25.6 per cent), realty revenue (13.1 per cent), residential broking origination commission (12.9 per cent), commercial broking origination commission (9.6 per cent) and other revenue (6.6 per cent).
Executive chairman and CEO of N1 Ren Hor Wong attributed the revenue growth to the group’s diversification strategy, particularly its move to expand its presence in the commercial lending space, amid the slowdown in the residential mortgage market.
In the June 2019 quarter, N1 had secured an additional $10 million to support commercial lending activities, $6.2 million of which was raised through its new One Lending Fund, with the remaining $3.8 million taken from the company’s balance sheet and committed capital.
“The company has achieved another critical milestone in its third full financial year since listing on the ASX,” Mr Wong said.
“On behalf of N1’s management, I am pleased to conclude that our diversification strategy has been [successful].”
Despite the revenue growth, the group delivered a net loss of $2.57 million, up from $1.85 million in FY18.
According to N1H, the increased net loss was primarily due to the following non-cash expenses totalling over $1 million:
- The sale of its Finsure aggregated mortgage trail commissions book, which saw the contract assets and related contract liabilities for the trail book reclassified as assets held for sale as at 30 June 2019 (cash net loss of $592,432)
- Increased depreciation and amortisation cost of $166,419
- Reduced deferred tax benefit of $265,356
In its annual report, N1H also outlined its plans for further expansion, which involves the addition of a residential mortgage management business.
This is an expansion that will empower N1 to have a more concrete position to capture market share,” Mr Wong added.
“Being a lender allows N1 to have better client retention, better cross-sell opportunities, and a more flexible profit margin.”
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