Trading Update and Withdrawal of FY26 Earnings Guidance
| Stock | Earlypay Ltd (EPY.ASX) |
|---|---|
| Release Time | 23 Dec 2025, 9:14 a.m. |
| Price Sensitive | Yes |
Earlypay Withdraws FY26 Earnings Guidance
- Increased costs associated with new Invoice Finance system
- Higher investment in product and distribution capabilities
- Credit loss expense in Equipment Finance higher than expected
Earlypay Limited (ASX:EPY) has announced that the Board of Directors has withdrawn the Company's FY26 earnings guidance of 15% to 20% higher EPS than FY25. The Board notes that trading conditions have evolved since the AGM, resulting in increased downside risks to previous earnings guidance for FY26. The Company has incurred increased costs associated with the implementation of its new Invoice Finance loan management system, which are expected to persist in H2 until the migration is complete around the end of FY26. Increased investment in product and distribution capabilities is supporting Funds in Use (FIU) growth, but higher short-term costs will weigh on earnings in FY26. Credit loss expense in Equipment Finance has been higher than expected, at around 1.5% of EF FIU on an annualised basis, compared to general provisioning of ~1%. After experiencing month-on-month growth in FY26 until November, Invoice Finance FIU growth and customer utilisation has moderated in December, although customer attrition has not had a material impact on FIU and new originations are solid. The Board has determined that maintaining quantitative guidance at this time would not be appropriate and has withdrawn previous guidance. The Board intends to provide updated earnings guidance following the release of the Company's half-year results in late February.
The actions we are taking now are about building a larger, more resilient and more profitable Earlypay with a clear mission and targeted investment in people, products, systems and distribution. The short-term increase in costs is supporting portfolio and revenue growth, while improving the future productivity of the Company. We are confident in our ability to execute this strategy and significantly increase earnings and long-term shareholder value, although I do accept that this is taking longer than shareholders would like.