Latitude’s Profit Soars but Regulatory Risks from 2023 Cyber Incident Persist

Strong Financial Momentum

Latitude Group Holdings Limited has delivered a standout performance for the half-year ended 30 June 2025, reporting a 13.3% increase in revenue to $600 million. The company’s statutory profit after tax from continuing operations surged by an impressive 341% to $39.7 million, reflecting a significant turnaround from the prior corresponding period. On a cash NPAT basis, which excludes certain non-cash and one-off items, profit rose 69% year-on-year to $46.2 million, underscoring the underlying strength of the business.

This growth was primarily driven by a 23% increase in net interest income, which rose to $396.1 million, supported by a 142 basis point expansion in net interest margin to 11.68%. The margin improvement was attributed to lower funding costs and strategic pricing actions. Despite rising cost-of-living pressures leading to higher delinquencies and net charge-offs, these remained within expected ranges, demonstrating disciplined credit risk management.

Operational Efficiency and Strategic Investments

Latitude’s cash operating expenses increased modestly by 3% year-on-year when excluding one-off benefits from the prior period, while decreasing 5% sequentially. The company maintained strong cost discipline, improving its cash cost-to-income ratio by approximately 700 basis points year-on-year to 45.2%. Investments in technology, marketing, and capability building continued to support growth ambitions without compromising operational efficiency.

The Group’s total receivables grew 9% year-on-year to $7 billion, with interest-bearing receivables up 11%, reflecting robust demand across its Pay and Money divisions. The tangible equity ratio stood at a healthy 7.0%, at the upper end of the Group’s target range, supporting a solid balance sheet position.

Capital Management and Dividend Policy

Reflecting confidence in its financial position and future prospects, Latitude declared an unfranked interim dividend of 4.00 cents per share, up from 3.00 cents in the prior period. The company’s Dividend Reinvestment Plan remains in place, allowing shareholders to reinvest dividends at an average market price.

During the half-year, Latitude successfully raised $1 billion in new term funding and refinanced $0.5 billion of private credit facilities on improved terms, extending its debt maturity profile and enhancing funding diversification. The Group maintained a 12-month liquidity runway with $1.25 billion of committed headroom available to support ongoing receivables growth.

Regulatory Environment and Cyber Incident Impact

Latitude continues to navigate regulatory scrutiny stemming from a 2023 cyber incident involving a supply chain attack and subsequent data breach. Investigations by the Office of the Australian Information Commissioner and the New Zealand Office of the Privacy Commissioner remain ongoing. The Group has maintained provisions for remediation costs related to customer support and regulatory responses but has not recognized any material financial loss or litigation at this stage.

The company has cooperated fully with regulators and continues to monitor potential customer complaints and representative actions. Insurance recoveries have been partially received, though further claims assessments are underway.

Looking Ahead

Latitude’s management remains focused on executing its Path to Full Potential strategy, targeting sustainable growth, margin optimisation, and disciplined credit management. The Group’s strong half-year results provide a solid platform as it advances technology investments and navigates a complex regulatory landscape.