Fund Manager Summary on Humm Group Ltd (ASX:HUM)
In December 2025, Collins St Asset Management commented that Humm Group Ltd (ASX:HUM) was trading materially below their assessed intrinsic value (c.90c–$1) despite stronger earnings and excess cash, and that a contested control process involving Abercrombie’s lowball 58c proposal, Credit Corp’s non‑binding 77c approach and an activist‑led board challenge could be the catalyst to unlock value. Across fund managers the consensus is that Humm is fundamentally supported by a shift to higher‑margin commercial lending, record assets under management and solid liquidity (including c.$125m cash against a sub‑$400m market cap), with tailwinds from lower interest rates and operational initiatives (eg. the Cognigy.AI “Emm” virtual assistant reducing cost‑to‑serve) improving margins and customer servicing; however, material risks remain—notably governance concerns around opportunistic takeover activity and board performance (which led at least one manager to exit on governance grounds), elevated net credit losses from impaired 2023 deals expected to persist into 1H26, a drag from the transaction cards business, and a recent $8.5m software impairment—making near‑term outcomes dependent on corporate action (competing bids and potential board change) as well as the company’s ability to contain credit losses and sustain net interest margins, so investors should weigh the structural lending tailwinds and strong cash position against governance and credit‑cycle execution risks when assessing valuation and catalysts.
Commentary From The Managers
There are 7 insights from 3 fund managers regarding their investment in Humm Group Ltd (ASX:HUM) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Ryder Capital
31 Dec 2025
$0.70
Summary
- Ryder Capital has completed the exit of their position in Humm Group Ltd.
- Sales were conducted progressively due to governance concerns.
- These decisions highlight a focus on maintaining investment integrity.
- Ryder Capital prioritizes robust governance in their investment selections.
Tamim Funds Management
31 Dec 2025
$0.70
Summary
- Tamim Funds Management believes the combination of a Credit Corp non‑binding indicative proposal and an activist board challenge materially increases the chance of a change of control or board renewal, and continues to hold because these catalysts could unlock value through an acquisition at the proposed price or a successful board reset.
- Takeover notice received: HUM acknowledged a section 203D notice and receipt of a non‑binding proposal from Credit Corp Group to acquire 100% of HUM for $0.77 per share, with due diligence access discussions initiated.
- Proposal status: The proposal is explicitly non‑binding, subject to further due diligence and approvals, and therefore not assured.
- ASX confirmation: A separate ASX filing confirmed the proposal details and reiterated the conditional, non‑guaranteed nature of the transaction.
- Activist campaign: A group of activist shareholders is seeking to remove the chair and three board members; Tamim views this as a positive catalyst if the vote succeeds.
- Voting intention: Tamim Funds Management intends to support the vote to remove the current board to facilitate potential strategic outcomes.
- Key risks: Outcome uncertainty remains — the bid may not proceed, due diligence or regulatory issues may arise, and the activist challenge may fail.
- Portfolio approach: Continued holding reflects a view that the potential upside from an acquisition or board change outweighs the present risks and preserves optionality for these catalysts to play out.
Collins St Asset Management
31 Dec 2025
$0.70
Summary
- Collins St Asset Management believes Humm is materially undervalued and continues to hold because 2025 results and excess cash create a large valuation gap versus our conservative intrinsic range, while an unfolding boardroom and takeover contest provide catalysts to unlock shareholder value.
- 2025 earnings rose to $47 million and excess cash now exceeds $125 million.
- Market capitalisation is ~$350 million, implying under 5x earnings after adjusting for surplus cash and a price-to-book <1.
- On conservative valuations we expect Humm to trade between 90c–$1.00 per share, yet the stock currently sits at 70c.
- Chairman Andrew Abercrombie’s 58c takeover proposal fell short and is viewed as opportunistic given his prior rejections of materially higher offers and our intrinsic assessment of ~90c.
- We have engaged with activist investor Jeremy Raper to seek board change due to disappointment in Humm’s performance and governance.
- The board recommended investors reject our proposal; shareholders will vote on February 14.
- Separately, Humm disclosed it received a takeover approach from Credit Corp of up to 77c a month earlier, raising questions about the board’s handling and timing of disclosures.
- With potentially two competing bidders and a contested boardroom, 2026 looks likely to be an eventful year and we expect active competition to help unlock value for shareholders.
Collins St Asset Management
30 Sept 2025
$0.66
Summary
- Collins St Asset Management continues to hold HUMM Group (ASX:HUM) as a longstanding investment in the Fund.
- Recent corporate activity has positively impacted HUMM's share price, which rose by almost 18% in the September quarter.
- Collins St previously assessed the non-binding proposal from The Abercrombie Group as opportunistic and below the company's value.
- Despite Abercrombie's ongoing discussions, HUMM's share price remains above the indicative offer made in June.
- HUMM reported a full year cash profit after tax of $52.9 million, supported by a 10% growth in assets under management to a record $5.5 billion.
- The company maintains a stable Net Interest Margin of 5.4%.
- While the transaction cards business is a drag on profitability, the Commercial business achieved a stable cash profit after tax of $45.3 million.
- Net credit losses remain elevated due to impaired deals in 2023 but are expected to trend down through the year.
- The Board impaired $8.5 million of software capitalised in earlier years, anticipating reduced volumes in FY26.
- HUMM declared a fully franked dividend of 0.75 cents per share, totaling 2.00 cents for FY25.
- HUMM is currently trading at approximately 7x forward earnings, representing 5.5% of the Fund.
- HUMM focuses on maintaining a wide 'jaws' between revenue and expenses, minimizing customer service costs.
- A partnership with Cognigy.AI has led to the development of a Virtual Assistant, Emm, enhancing customer service efficiency.
- Emm has achieved a 50% resolution rate for inbound customer inquiries, improving customer experience and reducing costs.
Collins St Asset Management
9 Sept 2025
$0.64
Summary
- Collins St Asset Management continues to hold Humm Group Ltd due to its resilient business model.
- Humm Financial reported revenue of $666 million (+8%) and underlying NPAT of $55 million (flat).
- The stock trades at approximately 5.8x PE, indicating potential value.
- Strong liquidity with undrawn facilities and $125 million cash against a $320 million market cap.
- Possesses a substantial franking credit balance.
- Stable net interest margins contribute to the overall resilience of the business.
- Concerns regarding governance, particularly with founder and chairman Andrew Abercrombie's lowball privatization offer of ~59c/share.
- This offer is seen as opportunistic and disappointing, especially given Abercrombie’s previous rejection of Latitude Financial’s bid as too low.
Collins St Asset Management
30 June 2025
$0.56
Summary
- HUMM Group (ASX:HUM) provides financing solutions to consumers and businesses.
- Originally named Flexigroup, HUM focused on financing for furniture and white goods.
- Increased competition from Afterpay has led HUM to develop its business lending division, now a major earnings driver.
- Despite strong performance and favorable conditions from falling interest rates, HUM’s share price has struggled.
- Chairman Andrew Abercrombie made an offer to purchase all shares at 58c, a 30% premium to the share price at the time.
- Abercrombie previously rejected an offer equating to 90c, claiming it was too low and opportunistic.
- Collins St Asset Management anticipates a revised offer in the coming weeks due to institutional investors likely viewing the current offer as too low.
- While a revised offer is expected, it may not reflect HUM's true value, estimated between 90c - $1.
- The situation may attract other bidders or prompt Abercrombie to increase his offer for a successful takeover.
Ryder Capital
31 Mar 2025
$0.55
Summary
- Ryder Capital continues to hold its position in Humm Group due to recent share price weakness.
- The decision to add to holdings is based on what Ryder Capital considers a strong performance in 1H25.
- Confidence in Humm Group's prospects has contributed to the fund manager's ongoing investment thesis.
- Ryder Capital believes the current valuation reflects long-term growth potential.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Humm Group Ltd (ASX:HUM)?
Fund managers including Ryder Capital, Collins St Asset Management and Tamim Funds Management have invested in Humm Group Ltd (ASX:HUM).
Why do fund managers invest in Humm Group Ltd?
Fund managers invest in Humm Group Ltd due to its financing solutions for consumers and businesses, which have shown resilience and growth potential. The company's recent earnings indicated growth in assets under management, supported by a stable net interest margin. Despite recent share price volatility, there is optimism about potential acquisition interest, as recent offers were considered undervalued. Additionally, the presence of a dividend and a healthy cash position enhance its attractiveness, despite governance concerns.
What happened to Humm Group Ltd (ASX:HUM)?
Fund managers have invested in Humm Group Ltd due to its recent corporate developments and financial performance. The company's share price saw an increase of nearly 18% in the September quarter, indicating positive market sentiment following insufficient acquisition proposals. Humm's financials show a full-year cash profit after tax of $52.9 million and a record $5.5 billion in assets under management, reflecting solid growth. The strategic partnership with Cognigy.AI to enhance customer service via automation also points to effective cost management. However, concerns over governance have led some investors to exit their positions. With current valuations suggesting Humm is trading at approximately 7x forward earnings, fund managers view the company as a potentially valuable investment, balancing growth prospects against operational challenges.
What is the short interest in Humm Group Ltd (ASX:HUM)?
The short interest in Humm Group Ltd (ASX:HUM) is 0.78% which makes it the 231st most shorted stock on the ASX. Of the 500.1M shares that Humm Group Ltd has on issue, 3.9M have been sold short.
What does Humm Group Ltd (ASX:HUM) do?
Humm Group Ltd. operates as a financial services group, which engages in the financial products through a network of retailers and brokers. The firm's activities include a variety of financial risks, liquidity risk, funding risk, credit risk and market risk. It operates through the following segments: PosPP, New Zealand Cards, Australia Cards, and Commercial. The company was founded by David Berkman and Andrew Abercrombie in 1988 and is headquartered in Sydney, Australia.