How Cash Converters’ Strategic Shift Fueled a 41% Profit Surge in FY25

Strategic Transformation Drives Earnings Growth

Cash Converters International Limited (ASX – CCV) has delivered a strong FY2025 financial performance, reporting a 41% increase in statutory net profit after tax to $24.5 million. This impressive growth underscores the success of the company’s ongoing strategic transformation, which focuses on reshaping its loan portfolio and expanding its retail footprint.

While revenue remained largely stable at $385.3 million, the company’s gross loan book contracted by 15% to $244.6 million as it exited legacy payday and vehicle lending products. This deliberate shift has improved loan book quality, with net loss rates falling from 17.5% to 16.0%, reflecting more prudent lending practices supported by advanced machine learning credit models.

Expanding Retail Presence and Luxury Offerings

Cash Converters is capitalising on growing consumer demand for value and sustainability through its retail operations. The successful pilot of a luxury-only store in Bondi Junction has paved the way for further luxury store openings nationwide, tapping into a lucrative market segment. Elevated gold prices have also bolstered transaction values and gross profit margins, contributing to a 29% increase in store operating EBITDA in Australia.

The company’s hybrid distribution model, combining digital channels with a physical store network, continues to be a competitive advantage. Digital platforms now generate approximately 65% of approved loans and 23% of retail sales, enhancing customer engagement and operational efficiency.

Franchise Acquisitions Fuel Growth in Australia and UK

Corporate-owned stores expanded through strategic franchise acquisitions, with 20 stores acquired across Australia and the UK during the year. This brings the Australian corporate store count to 86, with an additional six stores under agreement for acquisition. The UK business, contributing 19% of EBITDA, remains a significant growth opportunity with a large franchise network of 135 stores and ongoing acquisition prospects.

Cash Converters’ strong balance sheet, featuring $73.2 million in cash and equivalents and $81 million in undrawn funding lines, positions the company well to support future growth initiatives and maintain disciplined capital management.

Looking Ahead – Sustainable Growth and Innovation

For FY2026, Cash Converters is focused on three strategic pillars – scaling a sustainable loan book with innovative, lower-cost lending products; expanding its store network through acquisitions and new greenfield sites; and optimising profitability via operational efficiencies and disciplined cost control. The company also plans to unify its loan products to simplify the customer experience, reinforcing its commitment to responsible lending.

With a fifth consecutive fully franked dividend declared, Cash Converters signals confidence in its sustainable earnings trajectory and ongoing value creation for shareholders.