Harmoney Upgrades FY25 Profit Guidance, Launches On-Market Share Buy-Back

Upgraded Profit Guidance Signals Confidence

Harmoney (ASX: HMY) has lifted its FY25 cash net profit after tax (NPAT) guidance to $5.5 million, up from the previous $5.0 million forecast, reflecting stronger-than-expected operational momentum. The company also set an ambitious FY26 target of exceeding $10 million in cash NPAT, alongside a cash return on equity (ROE) surpassing 25%. This upgrade underscores Harmoney’s confidence in its growth trajectory, driven by its proprietary Stellare® 2.0 platform.

Loan Book and Margins on the Rise

Key performance indicators from the first nine months of FY25 reveal a 5% increase in the loan book to $798 million, with net interest margin improving by 30 basis points to 9.1%. Risk-adjusted income also rose by 30 basis points to 5.3%, while credit losses remained well controlled. These metrics highlight the company’s ability to scale its lending operations efficiently while maintaining credit quality.

Stellare® 2.0 Driving Growth and Customer Retention

The rollout of Stellare® 2.0 across Australia and New Zealand is a pivotal factor in Harmoney’s growth outlook. This automated customer acquisition and credit assessment engine is attracting over 10,000 new applicants monthly and fostering a 140% return rate in additional lending from existing customers at near-zero cost. The platform’s scalability is reflected in a declining cost-to-income ratio, now at 18% excluding non-cash expenses, positioning Harmoney well for accelerated expansion.

Capital Management and Share Buy-Back

In a strategic move to enhance shareholder value, Harmoney announced an on-market share buy-back program commencing around 13 May 2025, authorized to acquire up to 5% of its ordinary shares within 12 months. The buy-back will be executed through Ord Minnett Limited, subject to market conditions. The company emphasized its strong capital position, with available cash and warehouse equity supporting loan book growth beyond $1.2 billion without the need for equity raising.

Debt Repayment Prospects

Harmoney’s improved cash NPAT and capital efficiency also pave the way for potential corporate debt repayments starting December 2025, following the recent cancellation of $7.5 million in undrawn debt facilities. This deleveraging strategy could further strengthen the balance sheet and reduce financing costs, enhancing long-term profitability.

Market Valuation and Investor Engagement

Despite a market capitalization of approximately $54 million as of late April 2025, Harmoney’s embedded business value, driven by its loan book income and proprietary technology, is estimated to exceed $120 million. The company continues to engage investors through its Investor Hub, providing transparency and direct access to management insights.