Latitude Group Surges with Record $7bn Receivables and 341% Profit Jump
Latitude Group Holdings reports a remarkable 341% increase in statutory profit for 1H25, driven by record receivables and strategic partnerships. The company’s strong balance sheet and AI investments set the stage for sustained growth.
- Statutory NPAT up 341% to $39.7 million
- Record gross receivables reach $7.0 billion, highest since 1H20
- New partnerships with major retailers and online travel group
- Cash cost-to-income ratio improves by 700 basis points
- Unfranked dividend declared at 4.00 cents per share
Strong Profit Growth Amid Rising Volumes
Latitude Group Holdings Limited (ASX – LFS) has delivered a standout performance in the first half of 2025, reporting a statutory net profit after tax (NPAT) of $39.7 million; a staggering 341% increase compared to the same period last year. This surge was underpinned by a 12% rise in total new volumes to $4.2 billion, including a 13% increase in purchase volumes driven partly by the David Jones store card partnership launched last year.
The company’s Money division also hit a record high with $783 million in new personal and auto loan originations, up 8% year-on-year, contributing to gross receivables climbing to $7.0 billion; the highest level since the first half of 2020.
Margin Expansion and Operational Efficiency
Latitude’s operating income rose 19% to $408 million, with margins improving by over 100 basis points year-on-year. This margin expansion reflects strategic pricing initiatives, lower funding costs following Reserve Bank cash rate cuts, and ongoing productivity programs that have reduced the cash cost-to-income ratio by approximately 700 basis points to 45.2%.
Despite elevated competitive pressures, the company maintained disciplined margin management while investing in growth areas such as technology, marketing, and AI-driven automation aimed at enhancing customer experience and employee productivity.
Strategic Partnerships and Funding Strength
Latitude expanded its retail footprint through new partnerships with prominent brands including E&S Trading, Adairs Retail Group, Mocka Furniture, and online travel group Webjet. These alliances have bolstered purchase volumes and diversified revenue streams.
On the funding front, Latitude raised or refinanced $1.5 billion in secured financing, optimizing funding costs and extending maturity profiles. The company also completed a $3.3 million buyback of Capital Notes, further strengthening its balance sheet. The tangible equity ratio stands at a robust 7.0%, positioning Latitude well within its target range.
Outlook – Growth Supported by Macroeconomic Tailwinds
Looking ahead, Latitude expects continued asset growth supported by anticipated further reductions in central bank cash rates, which should boost consumer confidence and spending. The company remains focused on maintaining predictable credit performance amid stable labour markets and normalized household savings.
Strategic investments in AI, digital channels, and cyber defence are set to drive profitable growth and market share gains. Latitude’s management signals confidence in sustaining revenue margin expansion through disciplined pricing and funding strategies, despite ongoing competitive challenges.
Bottom Line?
Latitude’s robust first half performance and strategic initiatives position it well for continued growth, but sustaining margins amid competition will be key to watch.
Questions in the middle?
- How will Latitude manage margin pressures as competition intensifies?
- What impact will AI investments have on long-term operational efficiency?
- Can new partnerships sustain volume growth in a potentially volatile consumer environment?
