HG Holdings Reports $11.5 Million Revenue for Fiscal Year 2024, Highlights Growth in Management Fees

HG Holdings, Inc. reported a total revenue of $11.5 million for the fiscal year ending December 31, 2024, reflecting a 3.6% increase from $11.1 million in 2023. The company's net title premium written rose to $6.0 million, up from $5.9 million in the previous year, while management fees increased significantly to $3.0 million, compared to $2.3 million in 2023. However, the company did not generate any reinsurance premiums in 2024, a decline from $300,000 in 2023. The overall gross profit for the year was $10.9 million, an increase of $385,000 from the prior year, while operating expenses decreased to $12.6 million from $13.0 million, primarily due to workforce optimization efforts.

In terms of operational metrics, the company maintained a stable employee count of 69 as of December 31, 2024. The title insurance segment, which is heavily reliant on real estate market activity, faced challenges due to high mortgage interest rates that have dampened transaction volumes. The company noted that the demand for title insurance services is closely tied to the cyclical nature of the real estate market, which has seen a decline in activity over the past two years. Despite these challenges, the company anticipates a potential increase in loan originations in 2025, as projected by the Mortgage Bankers Association.

Strategically, HG Holdings has focused on expanding its management services segment, which has contributed positively to revenue growth. The company entered into management advisory contracts with related parties, generating additional income. Furthermore, the company continues to explore potential acquisitions to enhance its market share and operational capabilities. As of December 31, 2024, the company held a 28% voting interest in HC Government Realty Trust, which is expected to remain a significant source of revenue, although it is subject to risks associated with government lease agreements.

Looking ahead, HG Holdings expressed cautious optimism regarding its financial outlook, contingent on the stabilization of interest rates and improvements in the real estate market. The company is closely monitoring economic conditions that could impact its operations, particularly in Florida, where it generates the majority of its title insurance revenues. Management believes that its current cash reserves, totaling $20.4 million, are sufficient to support operational needs for at least the next 12 months, despite the ongoing challenges in the title insurance sector.