Earlypay FY25 NPAT Soars 24% on Equipment Finance Surge
Earlypay Limited reported a 24% rise in underlying NPAT and a 30% increase in EPS for FY25, driven by strong growth in Equipment Finance that offset declines in Invoice and Trade Finance portfolios.
- Underlying NPAT up 24% to $5.1 million
- EPS rises 30% to 1.9 cents per share
- Equipment Finance Funds in Use (FIU) grows 33%
- Invoice and Trade Finance FIU decline amid portfolio rebalancing
- Credit loss expense falls 53%, net revenue margin improves to 13.4%
Strong Profit Growth Amid Portfolio Shift
Earlypay Limited has delivered a robust FY25 financial performance, reporting a 24% increase in underlying net profit after tax (NPAT) to $5.1 million and a 30% rise in underlying earnings per share (EPS) to 1.9 cents. This growth comes despite a flat overall Funds in Use (FIU) position, reflecting a strategic rebalancing of the company’s lending portfolio.
The company’s portfolio realignment saw a marked shift away from Invoice Finance (IF) and Trade Finance (TF), both of which experienced declines in FIU, towards Equipment Finance (EF), which grew FIU by an impressive 33% to $124.2 million. This pivot to EF, focused on wheel-based assets such as trucks and earthmoving equipment, has been a key driver of margin expansion and credit quality improvement.
Margin Expansion and Credit Quality Improvements
Earlypay’s net revenue margin improved by 39 basis points to 13.4%, supported by higher margins in the IF segment despite its reduced size, and stable margins in the growing EF segment. The company also reported a significant 53% reduction in credit loss expense, reflecting strong credit performance and a lower general provision rate.
Cost discipline remained a focus, with operating expenses and direct costs managed carefully despite increased sales commissions linked to EF originations. One-off items, including early funding termination fees and software development costs, had a modest net impact on earnings.
Capital Management and Growth Outlook
Earlypay strengthened its balance sheet by repaying all corporate debt and refinancing its EF warehouse facility, which is expected to release approximately $10 million in surplus capital in Q1 FY26. This capital flexibility positions the company well for potential share buy-backs, bolt-on acquisitions, or accelerated organic growth.
Looking ahead, Earlypay projects FY26 underlying EPS growth of 15% to 20%, underpinned by continued EF momentum and a focused strategy to leverage its referrer network to distribute IF products more effectively. The company also plans to enhance its platform and product offerings to simplify access to Invoice Finance for underserved small and medium enterprises (SMEs).
Strategic Pause on Change of Control Talks
Notably, Earlypay confirmed that active discussions regarding a potential change of control transaction have ceased, allowing management to concentrate fully on executing its growth strategy and capital management initiatives.
Bottom Line?
Earlypay’s FY25 results highlight a successful portfolio pivot and capital strategy, setting the stage for sustained growth and shareholder returns in FY26.
Questions in the middle?
- How will Earlypay balance growth and margin in its evolving product mix?
- What impact will the EF warehouse refinancing have on funding costs and scalability?
- Could Earlypay revisit change of control discussions amid improving financial metrics?
