Treasure Chest | 10:00 AM
FNArena's Treasure Chest reports on money making ideas from stockbrokers and other experts. Today's idea is on financial services provider Generation Development.
By Greg Peel
Whose Idea Is It?
Petra Capital
The subject:
Generation Development's ((GDG)) relationship with the world's largest funds manager, BlackRock.
More info:
Generation Development Group is a diversified financial services business. The group has three divisions: Generation Life, which offers investment bonds and lifetime annuities; Lonsec, a leading qualitative financial research house; and Evidentia, a leader in self-managed accounts (SMA).
Generation Development acquired its first 37% equity stake in Lonsec in September 2020. It become the sole owner (100%) in mid-2024. Evidentia was acquired in early 2025. The group’s FY25 result release in late August featured the first full year of Lonsec’s contribution and a part year of Evidentia.
Generation Development’s FY25 saw revenue up 191% year on year, underlying profit up 170%, investment bonds up 33% and managed accounts up 48%. Underlying profit beat consensus by 13%, Lonsec outperformed, but most other metrics were in line with expectations.
Lonsec delivered a particularly strong earnings margin increase in the second half over the first (49.8% versus 41.7%). Gross profit margins in both key Lonsec sub-businesses (Research and Ratings and Lonsec Investment Solutions) increased by 5%-8% sequentially.
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