Pepper Money (PPM) investor relations material

Executive summary

• Net profit after tax for 1H 2025 was $47.0m, up 2% year-over-year, with profit before tax and loan loss expense at $109.2m, up 1% year-over-year, driven by stable operating income and disciplined cost management.

• Total originations reached $4.5bn, a 38% increase year-over-year, with mortgages up 53% and asset finance up 19%.

• Total assets under management (AUM) hit a record $20.1bn, up 4% year-over-year, with robust servicing growth and a shift toward prime lending.

• Special and interim dividends totaling over $83m were declared for 2025, with annualized yields up to 20.9%.

Financial highlights

• Net interest margin (NIM) at 1.98%, up 6bps year-over-year, with asset finance NIM up 21bps and mortgage NIM down 9bps.

• Total operating income was $185.0m, down 1% year-over-year; total expenses fell 2% to $116.7m, improving cost-to-income ratio to 51.7%.

• EBITDA for the half was $89.5m; underlying profit before tax and loan loss expense was $109.2m, up 1% year-over-year.

• Loan loss expense was $40.9m, nearly flat year-over-year; total provisions increased to $124.7m.

• Basic EPS was 10.62c, up from 10.46c in 1H 2024.

Outlook and guidance

• Confident in a strong finish to 2025 and a fast start to 2026, supported by market stabilization, RBA rate cuts, and improved consumer confidence.

• Expect continued growth in originations and AUM, leveraging technology, process efficiencies, and new product pipeline.

• Anticipate steady state expenses in the second half, with some inflation and marketing spend increases.

• Prudent provisioning and cautious credit risk management continue amid macroeconomic uncertainty.

• Demand for Whole Loan Sales and servicing is expected to remain strong.