Cash Converters International (CCV) H1 2025 earnings summary

Executive summary

• Revenue for 1H25 was stable at $192.1m, with operating NPAT rising 24% to $12.2m, reflecting successful execution of strategic initiatives, improved credit models, and strong store trading.

• Net profit attributable to members increased 21% year-over-year to $12.1m.

• The business derives earnings from lending, retail store operations, and franchising across 15 countries with 668 stores.

• Continued transition away from Small and Vehicle Loans, focusing on lower-cost, longer-term lending and luxury retail expansion.

• Acquired 47 UK and 12 Australian franchise stores since FY21, with further acquisitions in the pipeline.

Financial highlights

• Revenue stable at $192.1m (up 0.3% year-over-year); operating EBITDA up 12% to $36.5m; operating NPAT up 24% to $12.2m.

• Net profit increased 21% year-over-year to $12.1m; gross profit up 9% to $123.3m, driven by lower bad debts and improved credit quality.

• Net loss rate reduced to 7.3% (from 9.0% in 1H24); cash and equivalents rose 17% to $57.3m.

• Gross loan book declined 5% to $274.4m due to strategic shift away from Small and Vehicle Loans.

• Fully franked interim dividend of 1c per share, ninth consecutive half-year dividend, payable 11 April 2025.

Outlook and guidance

• Targeting further franchise store acquisitions in Australia and the UK, with each new store expected to be earnings accretive within the first year.

• Scaling sustainable loan book with lower-cost products and leveraging machine learning for credit risk assessment.

• Focused on operational efficiencies, expanding luxury retail, and optimizing capital allocation to drive sustained earnings growth and consistent dividends.

• No significant events after balance date expected to affect operations or results.