Solvar (SVR) H1 2026 earnings summary

Executive summary

• Commercial lending, led by the Bennji division, expanded the loan book to AUD 67 million, with plans to double by March and replace New Zealand contributions; Australian loan book up 1.7% to AUD 846.6 million since June 2025.

• Strategic exit from New Zealand accelerated by the sale of the written-off loan book for NZ$9.4 million, repatriating funds to Australia and supporting special dividends.

• Regulatory issues with ASIC largely resolved, with most claims dismissed, providing operational clarity.

• Strong Christmas demand and commercial lending growth reversed initial H1 FY26 slowdown.

• Debt facilities increased by $250 million, providing headroom for further loan book growth.

Financial highlights

• Normalized net profit after tax reached AUD 20.012 million for the half, up 5.8% year-over-year, underpinned by the sale of New Zealand assets.

• Earnings per share rose 13.6% to 10.4 cents; statutory EPS up 13.5% to 9.3 cents.

• Fully franked dividends declared totaled 11.0 cents per share, including special dividends from NZ asset sale.

• Cash collections up nearly 5% year-over-year, reflecting strong consumer repayment trends.

• Bad debts at 2.9%, below target range, aided by one-off NZ asset sale benefit.

Outlook and guidance

• Reiterated normalized net profit after tax guidance of AUD 36 million for the full year, including one-off NZ loan book sale.

• Expect Bennji loan book to double by March and to offset NZ business wind-down by FY 2027.

• Dividend payout ratio expected to remain high, supported by strong free cash flow and capital position.

• Anticipate continued loan book and origination growth, especially in Bennji and AFS.

• Final stages of New Zealand exit and ongoing regulatory focus anticipated.