Solvar (SVR) H2 2024 earnings summary

Executive summary

• Group comprises Automotive Financial Services, Money3, and Go Car Finance, focusing on underserved customers overlooked by mainstream lenders.

• Revenue grew 3.2% year-over-year to $216.0m, driven by Australian loan book growth despite a planned New Zealand rundown.

• Normalised net profit after tax was $29.0 million, while statutory NPAT fell 64.2% to $17.0 million due to one-off impairment and legal costs.

• Loan book reached $930.3m, up 2.2% year-over-year, with Australian gross loan book up 11.2%.

• Strategic review led to exit and rundown of New Zealand loan book, reallocating capital to Australian commercial lending.

Financial highlights

• Group revenue increased from AUD 157 million to AUD 173 million year-over-year, with total revenue up 3.2% to $216.0 million.

• Normalised NPAT was $29.0m; statutory NPAT: $17.0m (-64.2% year-over-year).

• Gross Australian loan book increased 11.2% year-over-year to $791.1 million; group loan book rose to $930.3 million.

• Portfolio yield maintained at approximately 23% for the year.

• Cash position at year-end was $152.9 million, with $87.5 million unrestricted.

Outlook and guidance

• Expectation of continued double-digit growth in Australian operations for FY 2025, with loan book expected to close between $930–$970 million.

• Ceasing new lending in New Zealand from August 2024, redeploying capital to Australia and reducing NZ debt.

• Yield expected to decrease slightly as AFS business grows, but overall revenue growth to continue.

• Confident in producing normalized profit exceeding FY 2024 results.

• Focus on expanding commercial lending and leveraging strong balance sheet for organic and potential inorganic growth.