• Consolidated software platforms boosting productivity & system efficiency
• Launching new commercial lending business unit in FY25
• Executing expense reduction programs including lower employee expenses
• Repaid debt facilities in New Zealand with unrestricted cash
• Introduced Money3 mezzanine funding, providing headroom for growth

Solvar Ltd has reported a strong H1 FY25 performance, with a 26.9% increase in normalised NPAT to $18.5 million. The company's Australian operations saw a 4.6% increase in interest income and a 6.7% rise in net interest income, despite a 2.3% decline in normalised NPAT due to higher impairment and bad debt expenses. Group-wide, Solvar has seen stable bad debt levels at 4.1% (annualized) and a reduction in operating expenses by 8.2%. The company has also repaid higher-cost debt in New Zealand, introduced mezzanine funding from Money3 to support growth, and maintained a strong capital position with $132.6 million in debt facility headroom and $59 million in unrestricted cash. Solvar is focused on technology simplification in its Automotive Financial Services (AFS) business to improve efficiency and broker experience, as well as the launch of a new commercial lending business unit in FY25. The company expects normalised NPAT of $34 million for FY25, with bad debts expected to be within the 3.5%-4.5% target range. Solvar is well-positioned to take advantage of the upcoming interest rate cut cycle and growing consumer confidence in the Australian market.

Solvar forecasts normalised NPAT of $34 million for FY25, with bad debts expected to be within the 3.5%-4.5% target range. The company expects to maintain a similar dividend payout ratio in H2 FY25.

Solvar is strategically situated for robust growth in FY26, growing its resilient, stable profit profile. The company's Money3 back book will benefit from the rate-cutting cycle, and the launch of the new commercial lending business unit is expected to drive growth into FY26. Solvar is also focused on technology simplification in its AFS business to improve efficiency and broker experience, supporting growth in originations.