Earlypay Limited reported a 24% rise in underlying net profit after tax for FY25, driven by robust growth in equipment finance and improved credit performance, while declaring a fully franked dividend and forecasting further earnings growth in FY26.
- Underlying NPAT up 24% to $5.1 million
- Equipment Finance portfolio grows 33%, offsetting declines in Invoice and Trade Finance
- Credit loss expense halved to 0.75%, reflecting improved risk management
- Declared fully franked final dividend of 0.65 cents per share
- FY26 EPS guidance projects 15-20% growth, focusing on organic expansion
Financial Performance Highlights
Earlypay Limited (ASX, EPY) has delivered a solid financial performance for the 12 months ending June 30, 2025, with underlying net profit after tax (NPAT) rising 24% to $5.1 million. Earnings per share (EPS) increased by 30% to 1.9 cents, reflecting operational improvements despite a 4% decline in net revenue to $33.7 million. The company’s net revenue margin expanded to 13.4%, up from 13.0% the previous year, underscoring enhanced pricing and portfolio quality.
Funds in Use (FIU), a key measure of the company’s lending book, remained steady at $249.4 million. However, this stability masks significant shifts within the portfolio segments, with Equipment Finance (EF) growing strongly by 33% to $124.2 million, while Invoice Finance (IF) and Trade Finance (TF) portfolios contracted.
Portfolio Rebalancing and Credit Improvements
The decline in Invoice Finance FIU by 10% was largely due to refinancing activity by large, low-margin clients and some client insolvencies. Trade Finance FIU saw a sharp 72% reduction as Earlypay actively rebalanced away from riskier exposures. In contrast, Equipment Finance originations surged 183% year-on-year, signaling a strategic pivot towards higher-margin, asset-backed lending.
Credit quality showed marked improvement, with credit loss expense halving to 0.75% from 1.58% in FY24. This was attributed to a more diversified portfolio and strengthened risk management frameworks, which have reduced loan impairments and enhanced overall asset quality.
Capital Position and Dividend Policy
Earlypay generated strong operating cash flow of $9.1 million and expects to hold approximately $10 million in surplus capital following a planned refinance of its Equipment Finance warehouse by the end of Q1 FY26. This capital buffer provides flexibility for potential share buybacks, bolt-on acquisitions, or reinvestment to accelerate organic growth.
The board declared a fully franked final dividend of 0.65 cents per share, representing 100% of available retained earnings, signaling confidence in the company’s cash generation and capital management strategy.
Strategic Outlook and Technology Initiatives
Looking ahead, Earlypay has ceased discussions around a potential change of control and is now focused on executing its organic growth strategy. The company plans to leverage its expanding referrer network, particularly in Equipment Finance, to cross-sell Invoice Finance products and deepen client relationships.
A key operational priority for FY26 is the consolidation of three legacy loan management systems into a single, modern platform. This technology upgrade aims to reduce complexity, lower operating costs, and enhance innovation capabilities, supporting distribution through both traditional and emerging channels.
FY26 Guidance
Earlypay projects underlying EPS growth of 15-20% in FY26, driven by portfolio expansion in Invoice and Equipment Finance and improved operating leverage. The company’s disciplined capital management and improved credit profile position it well to capture growth opportunities in the Australian SME working capital finance market.
Bottom Line?
Earlypay’s FY25 results set a strong foundation for growth, but execution on technology and portfolio strategy will be key to sustaining momentum.
Questions in the middle?
- How will Earlypay balance growth ambitions with maintaining low credit losses?
- What is the timeline and expected impact of the loan management system consolidation?
- Will Earlypay pursue acquisitions or focus solely on organic growth given surplus capital?