Solvar (ASX: SVR) has reported a 5.8% year-on-year increase in both statutory and normalised NPAT for H1 FY26, driven by the sale of its NZ written-off loan book, expanded Australian operations, and a new $488 million warehouse facility.
The company is accelerating its exit from New Zealand and strengthening its funding capacity.
Solvar reported a normalised NPAT of $20.0 million for H1 FY26, an increase of 5.8% year on year.
Statutory NPAT also rose 5.8% to $17.8 million, with normalised EPS at 10.4 cents.
The Australian loan book demonstrated solid growth, increasing 1.7% since June 2025 to reach $846.6 million.
The company also reported a decrease in bad debt expense by $6.2 million year on year, with the annualised bad debts ratio at 2.9%.
NZ Exit Accelerates
Solvar has accelerated its New Zealand exit strategy, highlighted by the sale of its NZ written-off loan book for NZD 9.4 million.
This transaction included an upfront cash payment of NZD 8.0 million and a NZD 1.4 million retention.
This sale significantly advances Solvar's withdrawal from the New Zealand market.
Proceeds from the NZ sale are contributing to capital returns, including a 2.5 cents per share special dividend paid in January 2026, with a further 2.5 cents per share special dividend due on 7 April 2026.
New Zealand interest income now represents less than 10% of the group's total interest income.
Strengthened Funding Position
The company has substantially bolstered its funding capacity by securing a new $488.0 million warehouse facility.
This, alongside a revised $270.0 million Money3 facility, brings Solvar's total funding limits to approximately $1.1 billion.
This expanded capacity provides funding headroom exceeding $500.0 million, which is critical for supporting future loan book growth.
The new facility is also anticipated to materially reduce interest expenses in FY27, improving the company's financial efficiency.
Strategic Growth Initiatives
Solvar continues to focus on strategic growth within Australia.
Its commercial loan book exposure stands at approximately $67.0 million, with key brands driving this expansion.
The Bennji commercial lending arm is expected to double its loan book by Q3 FY26; its loan book was around $13 million as at 31 January 2026.
Additionally, the AFS (Automotive Financial Services) unit delivered record new loan originations in H1 FY26, with its loan book around $207 million as at 31 January 2026.
The Money3 loan book scale is approximately $630 million.
Capital Management & Shareholder Returns
Consistent with its capital management strategy, Solvar declared total H1 FY26 dividends of 11.0 cents per share.
This comprises a 6.0 cents interim dividend and two special dividends of 2.5 cents per share each.
The company also completed an on-market share buyback of 5.3 million shares for $8.3 million during H1 FY26.
Since FY23, Solvar has repurchased 29.7 million shares for $45.7 million.
Franking credits stood at $73.6 million (pre-dividend). Solvar has reaffirmed its FY26 normalised NPAT guidance at $36.0 million.
Outlook and Risks
Solvar has delivered a solid H1 FY26 performance, underpinned by growing Australian operations and a significantly strengthened funding base.
The accelerated NZ exit and positive regulatory developments provide a clearer path forward, though execution risks remain around commercial lending growth and uncertain regulatory tailwinds.
