Cuscal’s H1 FY26 Profit Jumps 76% to $21.5m, Revenue Up 10%

Strong Financial Performance Amid Strategic Expansion

Cuscal Limited (ASX: CCL) has delivered a standout half-year financial performance for the six months ending 31 December 2025, reporting a 76% jump in net profit after tax to $21.5 million. This surge was driven by a 10% increase in total net operating income to $161.5 million and a significant uplift in profit before tax, which rose 71% to $30 million compared to the prior corresponding period.

The company’s results reflect both organic growth and the impact of its recent acquisition of Indue Limited, completed on 1 December 2025 for $75.2 million in cash. Indue, a well-established payments solutions provider, contributed $10.2 million in revenue and $9.7 million in expenses post-acquisition, with the integration expected to unlock substantial synergies.

Acquisition to Drive Long-Term Value

The Indue acquisition is a strategic move to diversify Cuscal’s revenue streams and strengthen its market position in the Australian payments infrastructure sector. Management anticipates $15–20 million in annual post-tax cost synergies once integration is complete, which is expected to drive earnings per share (EPS) accretion of over 25% and a return on invested capital exceeding 20% by the 2029 financial year.

However, Cuscal cautions that integration will incur non-recurring post-tax costs estimated between $25–30 million over three years, predominantly in the first two years. These costs, alongside the timing of contract transitions, mean the acquisition is expected to be dilutive to statutory EPS in the near term.

Operational Highlights and Dividend Declaration

Underlying operational performance remains solid, with transaction volumes growing 9% year-on-year and net operating income across core capabilities such as issuing, acquiring, and payments increasing by 9%, 10%, and 15% respectively. The company also saw a 19% rise in revenue from its financial crimes monitoring services, reflecting heightened demand for fraud prevention.

Reflecting confidence in ongoing performance, the Board declared an interim dividend of 4.5 cents per share, fully franked, payable on 26 March 2026. This follows a final dividend of 5.5 cents per share paid in September 2025.

Capital Position and Outlook

Cuscal’s balance sheet remains robust with a total capital ratio of 19.7%, comfortably above regulatory requirements despite a decline from 27.3% in June 2025 due to the Indue acquisition. The company maintains an investment-grade credit rating and a well-capitalised position to support growth initiatives.

Following the strong first-half results and acquisition, Cuscal has raised its full-year outlook, now expecting mid-teens growth in underlying net profit after tax, supported by high-single-digit transaction volume growth and the benefits of the Indue acquisition. The company anticipates the first half to represent approximately 55% of full-year underlying NPAT, factoring in higher net interest income before capital deployment.