Solvar Limited reported a 5.8% rise in half-year NPAT to $20 million, driven by the sale of its New Zealand written-off loan book and expanded debt facilities. The company also announced a special dividend and outlined growth plans in commercial lending.
- Normalised NPAT up 5.8% to $20 million for H1 FY26
- Special fully franked dividend of 2.5 cents per share paid and another planned
- Australian loan book grows 1.7% to $846.6 million
- New $488 million warehouse debt facility and repriced existing facility increase funding headroom
- ASIC litigation largely resolved with most claims dismissed
Strong Financial Performance Amid Strategic Portfolio Changes
Solvar Limited (ASX, SVR) has delivered a solid first half for FY26, reporting a 5.8% increase in both normalised and statutory net profit after tax (NPAT) to $20.0 million and $17.8 million respectively. Earnings per share rose an impressive 13.5% to 9.3 cents, reflecting improved capital efficiency and operational discipline.
The standout catalyst for this uplift was the sale of Solvar’s New Zealand written-off loan book for NZ$9.4 million in November 2025. This transaction accelerated cash flow recognition and simplified the company’s exit from the New Zealand market, reducing bad debt expenses by $6.2 million compared to the prior corresponding period.
Capital Management and Funding Enhancements
Solvar has taken decisive steps to strengthen its balance sheet and funding flexibility. The introduction of a new $488 million warehouse debt facility, alongside the repricing and resizing of its existing Money3 warehouse facility to $270 million, has expanded total funding capacity to approximately $1.1 billion. This provides over $500 million in headroom to support loan book growth, while the improved pricing terms are expected to reduce interest costs significantly in FY27.
During the half, the company also executed an on-market share buyback, acquiring 5.3 million shares at an average price of $1.58, a discount to net tangible assets. However, with the share price now trading near or above net tangible asset value, the board has decided not to renew the buyback program, opting instead to prioritise special fully franked dividends aligned with ongoing collections from the New Zealand loan book.
Regulatory Clarity and Growth Outlook
On the regulatory front, Solvar welcomed the September 2025 judgment largely dismissing claims against its Money3 subsidiary in the ASIC litigation. While a penalty hearing is pending, the resolution marks an end to a period of uncertainty. The company has invested heavily in improving underwriting standards, credit risk management, and community engagement, particularly focusing on vulnerable groups.
Looking ahead, Solvar anticipates continued disciplined growth in its Australian loan book, which increased 1.7% to $846.6 million, and expansion in its commercial lending segment, now valued at around $67 million. The company reaffirmed its FY26 guidance of normalised NPAT of $36 million, inclusive of the one-off New Zealand loan book sale.
CEO Scott Baldwin highlighted the strategic importance of the New Zealand exit and the company’s commitment to innovation and market expansion through initiatives like the Bennji commercial lending platform.
Bottom Line?
Solvar’s strategic portfolio reshaping and funding enhancements set the stage for steady growth, but the pending ASIC penalty and loan book retention remain watchpoints.
Questions in the middle?
- What financial impact will the pending ASIC penalty have on Solvar’s future results?
- How will Solvar’s commercial lending platform Bennji perform amid competitive pressures?
- What is the likelihood and timing of realising the NZ$1.4 million retention from the New Zealand loan book sale?