COG Financial Services lifted revenue 10% to $403.4 million and net profit after tax attributable to members by 29% to $24.24 million for FY26, driven by a 51% jump in its Salary Packaging segment including the Easifleet acquisition. The company declared a fully franked 7.0 cents per share dividend, suspending its dividend reinvestment plan.
- 10% revenue increase to $403.4 million
- 29% rise in net profit after tax attributable to members
- Salary Packaging revenues surge 51% with Easifleet acquisition
- Broking & Aggregation revenues up 3%, Lending down 9%
- Full year dividend raised to 7.0 cents per share, fully franked
Strong Salary Packaging Growth Drives Profit Surge
COG Financial Services Limited (ASX:COG) delivered a solid financial year ended 30 June 2026 with revenue climbing 10% to $403.4 million and net profit after tax attributable to members rising 29% to $24.24 million. Earnings per share rose to 11.58 cents, reflecting both improved profitability and a growing share count.
The standout performer was the Salary Packaging segment, which recorded a remarkable 51% revenue increase to $88.7 million, boosted by the strategic acquisition of Easifleet Pty Ltd in September 2025. Easifleet alone contributed $14.6 million in revenue and $9.2 million in EBITDA, underpinning the segment’s 88% jump in EBITDA attributable to COG shareholders to $31.0 million. Salary Packaging customers grew 31% to 68,510, with novated lease customers nearly doubling to 22,281.
Mixed Results in Broking & Lending Segments
The Broking & Aggregation segment posted a modest 3% revenue increase to $273.7 million, maintaining EBITDA at $24.5 million. This segment now includes several businesses reclassified from Lending, such as Centrepoint Finance and AAA Finance. Net amount financed grew 5% to $8.5 billion, consolidating COG’s position as Australia’s largest finance broker aggregation platform with an estimated 24% share of commercial equipment finance volume.
Conversely, the Lending segment saw revenues decline 9% to $38.1 million and EBITDA attributable to COG shareholders drop 37% to $1.2 million. Reduced lending activity, particularly from Westlawn Finance and TL Commercial Finance (now in run-off), alongside increased expected credit loss provisions, weighed on performance despite an 8% rise in new loans and leases to $115.1 million.
Balance Sheet and Dividend Highlights
COG’s net assets remained stable at $206.6 million, though net tangible assets were negative $72.2 million due to significant intangible assets of $216 million, primarily goodwill from acquisitions. The company’s capital management strategy continues to balance organic growth with strategic acquisitions, supported by a strong cash position of $187 million.
The Board declared a fully franked final dividend of 3.5 cents per share, matching the interim dividend for a total of 7.0 cents per share for FY26, up from 6.0 cents in FY25. The dividend reinvestment plan remains suspended for this year’s dividends, reflecting a preference for cash returns amid ongoing investment in growth.
Acquisitions and Ownership Consolidation
During the year, COG continued its acquisition spree, notably completing the Easifleet purchase and acquiring Agri Finance. It also increased stakes in several subsidiaries, including raising its holding in Fleet Network to over 92%, funded partly by a $20 million equity placement. These moves aim to deepen COG’s footprint in salary packaging and broking services, with the Easifleet deal enhancing scale and operational synergies.
COG’s management remains focused on disciplined acquisitions that are earnings accretive, while investing in technology and human capital to sharpen competitive advantages. The CEO highlighted expectations for continued profit growth in FY27, driven by both organic expansion and bolt-on acquisitions.
Credit Risk and Market Conditions
COG’s credit risk profile reflects cautious provisioning amid macroeconomic uncertainty. The expected credit loss (ECL) provision for the Group increased to 2.5% of financial assets at 30 June 2026, up from 1.8% the prior year, signaling a more conservative stance on potential defaults. The company’s lease and loan portfolios remain diversified across sectors and geographies, with security interests mitigating risk.
Interest rate exposures are managed through cash flow hedges, and the company maintains compliance with all debt covenants. Variable rate debt and cash holdings expose COG to interest rate movements, with a 100 basis point rate increase estimated to reduce profit after tax by approximately $1.45 million.
Executive Remuneration and Governance
COG’s remuneration report reveals a balanced mix of fixed and variable pay, with the CEO’s total compensation at $1.1 million including a $310,000 short-term incentive. The company’s long-term incentive plan now primarily uses a loan-backed employee share scheme with time-based vesting, reflecting a shift away from EPS growth hurdles.
Non-executive directors received fees within the approved cap of $400,000, and new appointments in 2025 have been integrated into the governance framework. The Board continues to oversee risk management and compliance, supported by an independent audit conducted by BDO Audit Pty Ltd, which expressed an unqualified opinion on the financial statements.
Bottom Line?
COG’s FY26 results underscore the growing dominance of its Salary Packaging business amid strategic acquisitions, but investors should watch how credit risks and lending headwinds play out in FY27.
Questions in the middle?
- How will COG manage rising credit loss provisions amid economic uncertainty?
- Will the company sustain Salary Packaging’s rapid growth and integration of acquisitions?
- What impact will the suspended dividend reinvestment plan have on shareholder returns and capital flexibility?