Cash Converters Reports FY26 Revenue of $429.2m with 20% Net Profit Decline

Franchise Expansion Drives Revenue Growth Amid Lending Transition

Cash Converters International Limited (ASX:CCV) reported a solid 11.4% rise in revenue to $429.2 million for FY26, fuelled by aggressive franchise store acquisitions and strong same-store sales in Australia and the UK. The company acquired 42 franchise stores, 36 in Australia and 6 in the UK, expanding its corporate store network to 200 locations across its core markets. This store growth helped offset the planned rundown of legacy payday and vehicle loan portfolios, which weighed on earnings.

Despite the top-line momentum, statutory net profit after tax (NPAT) fell 20% to $19.7 million, reflecting the strategic pivot away from higher-risk payday lending products, increased depreciation and finance costs linked to the expanded store footprint, and $3.5 million in after-tax one-off transition and acquisition expenses. Operating profit after tax, excluding these non-operating costs, declined 8% to $23.2 million.

Loan Book Evolution: Scaling Cashies Loan, Exiting Payday Lending

The company’s gross loan book contracted 3.3% to $236.6 million as legacy payday loans (Small Amount Credit Contracts or SACCs) were largely wound down, now representing just 2.4% of the total loan book. In contrast, the new Cashies Loan product, a revolving credit facility up to $10,000 with flexible redraws, grew nearly fivefold to $114.1 million, underscoring strong customer demand and successful product repositioning.

Cash Converters’ proprietary AI-powered machine learning credit models contributed to a marked improvement in credit quality, with the net loss rate on loans dropping to 11.1% from 16.0% in FY25. The company processed over 300,000 loan applications during the year, leveraging enhanced digital platforms and Open Banking technology to refine credit risk assessment and customer experience.

Retail and Luxury Segments Gain Traction

The retail division also delivered robust performance, with store sales rising 38% to $240.5 million. Same-store sales grew 13% in Australia and 6% in the UK, driven by a shift towards higher-margin luxury pre-owned goods including watches, jewellery, handbags, and electronics. Following a successful Bondi luxury store pilot in FY25, the company opened three additional luxury-only stores in FY26 across Australia and the UK, with a fourth opening in Perth early in FY27.

Inventory turnover improved, and the company deployed AI-powered authentication and pricing tools to enhance product market fit and margins. The circular economy remains a core focus, with over 1.4 million pre-owned items purchased globally during the year.

Balance Sheet Strength and Capital Management

Cash Converters closed the year with a strong balance sheet, reporting total assets of $510.8 million and equity of $253.8 million, up 5% and 11% respectively. Goodwill and intangible assets surged 74% to $82.2 million following franchise acquisitions. Cash and cash equivalents halved to $37.2 million, reflecting $51.4 million of cash outflows on acquisitions and dividend payments.

The company’s securitisation facility limit stands at $173.3 million, with $59.3 million undrawn capacity, providing a solid funding platform for lending activities. An amendment in February 2026 permanently lowered the minimum draw amount to $90 million. The Board declared a fully franked final dividend of 1.0 cent per share, marking the sixth consecutive year of a 2.0 cent total dividend per annum.

Governance, Risk and Strategic Outlook

Cash Converters continues to strengthen its governance and risk management frameworks, particularly in credit risk and cybersecurity. The company has proactively begun mandatory climate-related financial disclosures, establishing a Sustainability Committee and quantifying Scope 1 and 2 emissions across its global operations.

Looking ahead, management remains focused on responsibly scaling the Cashies Loan portfolio, continuing disciplined franchise store acquisitions in Australia and the UK, expanding the luxury retail footprint, and leveraging AI technology to optimize credit decisioning and inventory pricing. The company aims to balance growth investments with shareholder returns, supported by a strong capital position and funding flexibility.

While the near-term earnings reflect the transitional phase with legacy loan run-downs impacting profitability, the strategic shift towards a simpler, lower-risk lending model and expanding retail footprint lays the groundwork for sustainable earnings growth in coming years.