Recommencement of DRP Could Signal Cash Converters’ Shift in Capital Strategy

Background and Reinstatement

Cash Converters International Limited (ASX: CCV), a prominent player in consumer lending and second-hand retail, has resolved to recommence its Dividend Reinvestment Plan (DRP) from 20 February 2026. This move comes after the DRP was suspended in August 2021, marking a significant shift in the company’s approach to shareholder returns and capital management.

The DRP allows shareholders to reinvest their dividends into additional fully paid shares, effectively compounding their investment without incurring brokerage or transaction fees. Importantly, the terms of the DRP remain unchanged, including a 2.5% discount on the acquisition price of shares issued under the plan. This discount is calculated based on the volume weighted average price of shares traded on the ASX in the five trading days following the dividend record date.

Expanded Eligibility and Participation Details

One notable update is the Board’s discretion to permit institutional accredited investors (IAIs) in the United States to participate in the DRP, provided they supply certification confirming their status. This inclusion broadens the plan’s accessibility beyond Australian shareholders, although participation remains subject to regulatory compliance and the company’s discretion.

Shareholders who wish to participate can elect to reinvest dividends for all or part of their shareholding, with the flexibility to vary or withdraw their participation at any time before the dividend record date. Existing participants prior to the suspension do not need to reapply if they wish to continue their involvement. The company has also updated contact details for shareholder communications related to the DRP.

Implications for Shareholders and the Company

Reinstating the DRP signals Cash Converters’ confidence in its financial position and outlook, offering shareholders a convenient way to increase their holdings without incurring additional costs. For the company, the DRP provides a mechanism to conserve cash while supporting equity capital growth, which can be particularly valuable in managing balance sheet flexibility.

While the announcement does not specify which future dividends will be eligible for the DRP, the Board has committed to advising shareholders accordingly. This measured approach allows the company to maintain discretion over capital allocation in response to market conditions and operational needs.

Overall, the recommencement of the DRP aligns with Cash Converters’ ongoing strategy to enhance shareholder value and reflects its evolving capital management framework amid a transforming consumer finance landscape.