Plenti Group Limited

Good morning, everyone, and welcome to Plenty Group Limited's second quarter 2026 results update. All participants are in a listen-only mode. Today's presenters are Adam Bennett, Chief Executive Officer, and Myles Durie, Chief Financial Officer. The presentation will be followed by a question and answer session. If you're an analyst and you wish to be added to the question queue, please press the raise hand button visible at the bottom of your screen. For all other investors who would like to ask a question, please click the Q&A button at the bottom of your screen and type in your question. I will now hand over to Adam Bennett, Chief Executive Officer of Plenty. Please go ahead, Adam.

Thanks, Tom, and good morning, and thanks for joining the call. I'm delighted to once again be sharing an outstanding set of results for Plenty for the second quarter end of 30 September 2025. And I know most of you know who we are, but for those who might be new to our share register, let me just start with a very quick recap. So we're one of Australia's largest and fastest growing fintechs. We focus on the renewables, auto and personal loan verticals and we do that via really an obsession about our customers and using our technology, our proprietary technology to deliver very fast, simple and easy experiences for our customers and our brokers. We only fund the prime borrowers and we're very diversified funding and we've got a very long-term focus on the creation of shareholder value. Now the entire Plenty team across all aspects of our business have worked extremely hard over the last quarter on all fronts to deliver these results for our customers, for our strategic partners and brokers and also for you, our investors. Pleasingly, we've been able to build and maintain the momentum created in quarter one and deliver a really good set of numbers for quarter two. So as is our usual practice, Miles Drury, our CFO and I will talk you through our results and then we'll ensure that we leave some time to answer any questions you may have regarding those results. So let's just jump straight in. So we had an outstanding quarter two, really on all of the metrics that matter. So cash profit before tax to finish the first half was $14.1 million. And this translates to a cash and patent number of $12.8 million. And that's really to reflect the payment of tax and us consuming our carry forward tax losses. And Myles will talk a little bit more about that. But let's just say it's not every day you reference paying tax as a good thing, but for us it is a clear milestone that we're growing, we're becoming increasingly and consistently profitable, and we're really scaling away from our early fintech roots in terms of our financials and what we're generating in terms of shareholder value. Our H1 cash and PAT of $12.8 million was 133% above PCP. Especially pleasing was the growing momentum in loan origination. So investors may recall we hit an all-time record in Q3 last year of $383 million. We then did $407 million. We did $437 million in quarter one. And I'm delighted to announce we did $475 million for the quarter two just finished. And that's 47% above PCP and 9% above the prior quarter. And this took our loan portfolio to $2.83 billion, which is a 24% increase on PCP. What's extremely pleasing about the result is all three verticals, including automotive, renewables and PLs, all did very, very well. And I'll give you a little bit of colour for each of those. So our automotive loan originations were $264 million. That's up 57% on PCP. And that was driven by commercial and consumer. And really strong growth quarter on quarter, despite June, as you'd anticipate, always being a very seasonally high month. So we're very, very pleased with the momentum that we're seeing across the automotive business. And that consumer demand in there is reasonably strong. And also our offer in terms of fast, simple and easy for our brokers and our customers, the consistency of our credit underwriting and just the overall ease with which we do business was very good for our customers and for our originations. We've also refocused our commercial team, so we've added resources around the country and that's really helping us build out the relationships with brokers and convert more deals. So we're quite pleased with the momentum we've got in the automotive part. Renewables loan originations were $57 million, which is up 28% on PCP and 18% on prior quarter. And this is a sector we're delighted with. So we're seeing very strong growth across the country. That demand is spurred by federal and state government rebates. The push for green and climate-related change is really driving the uptake of batteries and more solar. And we also saw a very strong demand from the West Australian Battery Rebate Scheme that we won the administration rights to previously, and we're now seeing that deliver some really good volumes. So very excited about the renewable side of our business. And finally, personal loans. So originations were $154 million, up 39%, but they were slightly down on our quarter one by 4%. We continue to see strong volumes from our broker partners. Our proprietary technology and straight-through processing is really... giving us an edge in that space. But it is an area where we are looking at and focusing on again because we did have resource pressure in there and that's something that we're looking at and put a little bit of pressure in the system and we did miss out on some deals, which I'm not too happy about. But that is still a good result and we think we can really go on from there into the next quarter. We also saw continued growth in the NABPAL by plenty car loan. So that's really starting to hit its straps. Average value of originations per business day was growing at about 23% over Q1. And that loan portfolio has just got to 66.7 million. So again, we're quite happy with that and we want to see more from that. It's great to see. I'm very pleased with the overall increase in loan book growth and how we've built momentum. And it really is a clear function for plenty in terms of Our company continues to grow and scale as designed, and it demonstrates when all of the aspects of our business, our business development, our underwriting, our fulfillment, our risk, our technology, when all of that works well, the business is scaling and scaling well and starting to throw off more shareholder returns, which is a really good result for everyone. The growth is also the result of several active decisions we've made as a result of refreshing our corporate strategy. So number one is continued investment in our proprietary technology platform and that really we want to just continue to remove friction, deliver a fast, easy and consistent customer and broker journey and we're really building a head of steam on that. Number two is an investment in operations and underwriting staff. We want to ensure we can process and credit decision all potential deals within SLA. I mentioned the personal loans there for our brokers and customers and really get a fast, easy and consistent experience. That is really what we're all about, faster and fairer loans. Number three is we do continue to leverage our very deep relationships and the complementary distribution channels we have to market. That is something we're very focused on. We want to have a strategic portfolio of different distribution channels, and when they're all firing on all cylinders, it delivers a great result. And number four is the power of a clear target. So we've set and communicated a very clear target of a $3 billion loan book, both externally to investors but internally as well, And that's been a very good rallying cry for the entire company as we move further and further towards that goal. So I might pause there. I'll pass to Myles, and Myles is going to speak about margins, credit performance and overall profitability.

Thank you, Adam. And just to re-emphasise what Adam said, from a CFO point of view, I'm delighted with these results. To see such strong origination momentum over the last 12 months and then see that translate into bottom-line profitability is just fantastic. In relation to margins, we made a comment that they were slightly down in the quarter range, You will recall in the first quarter we had Mr. Trump's Liberation Day, which dropped swaps by some margin. That gave us a bit of a benefit. I think in this quarter we saw market funding costs go up a bit. And, you know, markets were particularly in order relatively competitive. We didn't see our competitors move their prices very much. And that led to a small amount of margin compression. Having said that, they're very much within the normal range, levels we're very comfortable with from an economic point of view, and we do tend to see a bit of variability quarter to quarter in our margins. In terms of credit, I said at the end of the first quarter that if investors sort of expected a less than 1% net credit loss result, they were brave. I'm pleased to say that I was wrong on that. we delivered a 94 basis point credit loss result for the quarter, which is fantastic. I do note July and August were around that 1% mark. In September, we saw some really strong recoveries came through, which brought the entire quarter down under the 1%, but really fantastic to see another 94 basis point result for credit in the quarter. I think equally pleasing is arrears. We had our lowest 90-day arrears at 35 basis points that we've had in some time, probably back to 2022. That was against 49 basis points at the end of the last quarter. I think there are a couple of things that are playing into that. One is obviously the types of customers that Plenty lends to are actually in a good place financially. Unemployment's strong, inflation's under control, rates have come down. Secondly, I think our offering is resonating really well with strong credit quality customers. Our straight-through processing offer, those really fast, efficient turnaround times that Adam was talking to, that resonates and attracts quality customers. And the third thing we do need to recognise is the book is growing really strongly, and when you have a strong growing loan book, you do get a base effect because you've got more new loans on the book at any point in time. But really strong credit results across the business, which is great to see. And finally, in relation to profit, 1H... Cash PBT, it would be fair to say that was a fantastic result. Cash PBT of $14.1 million, up 147% on last year. To put that in context, we've delivered in the first half of this year effectively the same cash PBT we delivered in the whole of FY25, which is a pretty fantastic thing to be able to say from a CFO point of view. At the risk of being boringly consistent in my commentary, the results were the same factors that drove the really good year in FY25. strong origination growth, driving strong loan book growth, good margin discipline, good credit results and operating leverage through the cost base. We did flag quite clearly the full year results that we were getting towards the end of utilising our carried forward tax losses. And given just how strong the 1H26 performance is, we do expect to use all $20 million of those tax losses in the current year and therefore pay some cash tax. And so we've effectively provided for the proportionate share of full year tax that would relate to the first half earnings in the current period, which that gives you $1.3 million of cash tax and therefore a cash cash impact number of $12.8 million, up 133% on the prior year. Again, a very, very strong result. All in all, an excellent result from the business, both on the quarter and for the half. I'll pass back to Adam to wrap up with our outlook. Thank you, Myles.

And is it boringly inconsistent or excitingly consistent or pleasingly consistent? But it is consistent. So let me provide an update on our FY26 objectives. Look, I'm really pleased with the progress the company's making on our number one strategic push this year, which is to grow by doing what we do but better over the first half. And as I said, we would. We have continued to refine how we work. We've continued to deepen our relationships and strategic partnerships and really keep investing in our proprietary technology platform. If you think about the three areas in which we gave guidance, I'll give you an update on each of those. So number one, we've continued to build momentum and strong profitability as we drive towards our primary growth goal of a $3 billion loan book by March 2026. Some of you may recall that on our previous growth rates, that $3 billion loan book was out in the future somewhat, and we've pulled that in significantly from the historical trajectory, and I'm extremely pleased with our performance in the first half towards achieving that ambitious goal. Number two, we also said we'd continue to drive meaningful cash impact, and you've just heard from Myles the extent of that as we scale the business, and that's exactly what we've done, delivering $12.8 million in cash impact And we expect to continue to generate more in the second half, albeit at a slightly lower half-on-half growth rate than in recent years. We've had above-budget loan originations for now six months in a row, and I remain very confident in both the dynamics of the auto renewables and personal loan businesses in which we operate and our ability to drive greater loan originations. And we absolutely remain committed to driving efficiency as we scale. So if I talk about the third element of our guidance, However, the rapid growth, as I mentioned, has put pressure into some of our teams as they basically deliver against very, very much increased volumes. And we've had a couple of things through the system, regulatory change, et cetera, that they've had to contend with. So we're now looking to invest in the second half in some additional growth-related roles in our fulfillment technology and product teams. and take some of the pressure off, but also, importantly, to better position us for Horizon 2, which is quickly approaching. And Horizon 2 is to grow by also doing new things, with the key word there being also. So we will continue the strong momentum we have on making our business better whilst also doing some new things. And so we're therefore going to spend more than the $69 million we said in the guidance for the full year, but we are absolutely committed to making sure we maintain a cost to net margin of below 57%. So we'll just continue to really be disciplined in how we grow the business. So let me close by saying I'm extremely pleased with the momentum across the entire business. We've started the active implementation of our refreshed strategy. We're making progress against our clear goals. And we've aligned our people to execute the strategy with enthusiasm, with growing confidence and determination. And that's delivering great results across all the metrics that matter. As many of you know, we're planning a more fulsome half one ASX release to the market on 18th of November. And we'll provide a more detailed update on specific financial performance and strategy developments there. But for now, let me open up the call to any questions that might be on the line, and Tom can curate those.

Thank you, Adam. As mentioned, we will now take questions from participants. As a reminder, if you're an analyst and you wish to be added to the queue, please press the raise hand button visible at the bottom of your screen. When your position in the queue is reached, you will be unmuted and can ask your question directly. For all other investors who would like to ask a question, please click the Q&A button at the bottom of your screen and type in your question. Questions will be selected for answering where they are broadly applicable to investors. If your question is not answered during the call, we will follow up after the conclusion of today's webinar. I'll now pause while the question queue is compiled. And our first question comes from James Pisanella. from Unified Capital Partners. Go ahead, James.

Hi, Miles. Congrats on the result. That was materially ahead of where I had my numbers. Maybe just two questions from me. Firstly, looking at profitability and operating leverage in the business, that was clearly a highlight. So I think revenue grew by $25 million this half versus PCP and cash NPBT grew by $8 million. So kind of 30% of that revenue is dropping through to cash NPBT. So just wondering, sort of balancing some of that higher investment flag, should we expect continued operating leverage in the business looking forward?

I mean absolutely. I mean this business is all about driving operating leverage. I think that the thing we're flagging is rather than just trying to continue to squeeze that really, really hard in the second half, given how strong the performance has been given where we're at from a profitability point of view, making some prudent investments to both make sure we've got capacity for growth on our operational side but also as Adam said, set ourselves up for operating efficiency and driving into new things into next year and the year beyond. you know, it makes a lot of sense. So, yes, we've got the luxury, given where the business is financially, to make some investments. We think that's the right thing to do for shareholders for long-term value, and so we're making that decision. And when we release the results, you'll see kind of what efficiency looked like in the first half and what that overall 57%. So, look, Operating leverage is absolutely part of the business, but we're just flagging in our second half. Expect to see something that's a bit more consistent with the first half, given the extra investments we're making to drive the long term, while we're still focused on growing cash, PBT and cash in pattern for the second half.

Definitely that makes sense. And then switching gears to originations, I think when we spoke at June, the commentary was that September's seasonally slower in terms of originations, and you've just printed $37 million above last quarter. So obviously a great result there. If I look back at December last year, originations were plus $60 million on the September quarter. So just wondering any comments on typical seasonality into the December quarter. Thank you.

I mean, October and November actually tend to be pretty decent months. December is a really hard one to call. Some years it's strong, some years it's less so. I think we are facing into, and I should actually know this number off the top of my head, a few less business days into the last quarter, which will probably have something to impact. I mean, you know, our objective is always to keep our heads down and grow, and I guess we'll see. But, yeah, October and November generally pretty strong, but obviously we've shown some pretty strong momentum in the last quarter as well.

Definitely. I did say a couple of questions, maybe just one more in terms of the loss rates and arrears. Again, they came out sort of lower or better than you perhaps flagged previously. So any comments on, you know, was there any one-offs in there or what was the driver and How should we be thinking about those into the next couple of quarters, potentially, you know, crystal ball gazing type stuff?

Yeah, not really a lot of one-offs. It was pretty, and obviously, you know, they do go up and down a little bit quarter to quarter, although we're obviously exactly the same in the last quarter. As I said, recoveries in September were particularly strong. You know, we had some really good auto recoveries come through there, so that was a better result. Look, I'm always, you know, I always think about 1% as a safe place to start. Having said that, with arrears at the end of the quarter so low, it does say that things are going in the right direction, but I'm always of the view that if you're less than 1%, you're on the braver end of the spectrum. That's great.

That's great. Well, congrats again. I'll jump back in with you. Thanks, guys.

Appreciate it. Thank you. Thank you, James. Our next question comes from Lachlan Woods of Canaccord. Lachlan, you can go ahead.

Hey, guys, a cracking result. Just on the last question, so September, the loan loss is coming in a bit stronger. Was that driven by, I guess, like tax rebates or just like... Why did the auto recoveries come in stronger than you guys were, like, expecting? Like, just any commentary there?

I think it was probably less than what we were expecting in the quarter. And, you know, I'm probably not looking, you know, each month exactly what's in the recoveries pipeline. But, you know, we probably had a bit of a larger backlog of vehicles. We cleared those out quite well, got some good some option results. And so... We're not talking a couple of hundred thousand dollars here, but you add that into the numbers and it all helps. So I haven't actually... That might mean that October's a little bit softer, so you do get the sort of court month-to-month variation. But no, it was just that the collections team did a great job. They cleared out a bunch of the inventory that they had, and so we saw some strong recoveries in the month, which is good to see. But I think, you know, look at it over the medium term in terms of what those... what those loss rates tend to look like. But, you know, clearly the credit of the market's good, the credit we're writing is good, and when the book is growing fast because we're driving really strong originations, you get a base effect that does help to make the percentage losses, you know, on the lower side, which is a good place to be. Perfect. Cracking result, guys.

Thank you. And our next question is on the Q&A line. So it is from Lachlan Scott of Mollis. He asks, called out in the release that Plenty and NAB are focused on building even greater momentum for the product in coming quarters. What are your expectations for originations in the second half? Should we expect the run rate to accelerate?

Yeah, so we really value the relationship that we've got with NAB, and that's something that we've worked very hard on over the last kind of year or two. And so we do want to see that keep growing. But the way we look at it, it is one part of our business and, you know, we want it to go as high as it can go. And that's really a function of NAB and us working well together to generate interest in that product with their customer base and then for us to convert that that interest into actual loans, and that's what both parties are focused on. So I think we can expect some more investment in marketing, and then we'll continue to look at ways that we can make that product conversion rate even better. We don't particularly give guidance month on month or quarter on quarter for that product, for obvious reasons, but we will keep the market updated as we pass through the various quarters ahead. Look, I'm very pleased with it. I wanted to see it go harder.

Great. And our next question on the chat is from Graham Walker. Do you feel there has been any significant pull forward of originations from the various federal and state government battery schemes? And if so, how do you see this impacting future originations and performance in that vertical?

Look, there's no doubt that the federal schemes have encouraged a lot more people to put batteries in their houses, and solar and battery attachment rates have gone through the roof in the applications we've got coming through. Does that pull forward people, or is what you're seeing people who may not previously have been putting solar and battery in their houses now deciding that they will do that because there's battery schemes. Look, I think it's hard to tell, I guess, from our point of view. We're in the early days of a pretty meaningful $2.3 billion federal scheme, and so our job is to make the very most of that as we possibly can. But I think broader awareness of solar and battery, and as you get to a point into replacement cycles, the more people that have got solar and battery in their roofs in some ways, the better from our point of view. So look, we will tell long term, but definitely there's probably elements of both

And it's worth just adding, I mean, we do see the electrification of society as a very strong strategic thematic for us. And so the whole renewables, solar, batteries, EVs is a space we are in strongly and we really want to make sure we're extremely well positioned.

Thank you. Our next question on the chat comes from Jerry Sells. He's asked for further clarification on exceeding the $69 million in operational costs, precisely what that refers to, and will the amount of additional investment over that number depend on anything?

So we've previously given guidance around hitting $69 million when we hit a $3 billion loan book. As we said, given the performance of the business and the very strong profitability, we're taking the opportunity to invest into the second half. Look, I think there's a range of dependencies as to exactly what that number looks like in the second half, the speed of hiring people into the business, strategic decisions that we made. We've looked at a number of things we might like to do in the business, exactly what's when, how, where we pull the trigger on that. I guess the important thing, certainly from my point of view as CFO, is we are committing to an overall cost-to-net-margin ratio, maintaining to improving the cost efficiency of the business, and that's really important. But I think it's a smart thing to do when you've got some capacity to make sure that you're setting the business up. We're in a position where there's a lot of opportunity around us to get after, and so to make some additional investment to get after that is a good decision from our point of view for our shareholders and investors.

Yeah, and I'd add to that. I mean, we are absolutely driving towards the $3 billion loan book by 31st of March, but for us, the 1st of April is another day where we have to start then So I certainly don't want to slow down momentum or have a false kind of cap on the momentum we can build, and that's why we're being so transparent around that desire to invest. And we will absolutely continue to be frugal, but I certainly don't want to slow down the momentum towards goals one and two, by almost artificially staying obsessed with number three, which is the 69. And I think use of a ratio is far more appropriate in our growth phase rather than a hard number. And that's why we've been as clear as we have been.

Thank you. And our final question in the chat this morning is from Raymond Wang. He asks, is the company able to comment on the two large shareholders that have recently sold down part of their holdings? The shareholders referred to are the Meyer Family and the Westbourne Trust. Any comments would be appreciated.

I think something both of those shareholders have shown a track record of doing is where there have been investors who want to go on the register, who are looking for larger parcels of stock that sometimes are harder to get through the market, being able to facilitate that. We've seen that happen a couple of times over the last few years. We see that as a positive thing. Obviously, getting a broader shareholder investor base, particularly institutions who tend to buy larger parcels, is a positive thing from our point of view. So the fact that those shareholders have been willing to facilitate that, we see as a really positive thing to build out the strength of the register and support liquidity in the stock, and it's great to see that we've got people who are interested and looking to take larger stakes in plenty. It's been very pleasing to see that. So obviously they make decisions independently, but that's our observed behaviour that we've seen, and we think that's a positive thing for the register and for the company. Thank you, Myles, and thank you, Adam.

As there are no further questions, we'll now conclude the webinar. So thank you for joining Plenty Group Limited's second quarter 2026 results update. Have a good morning. Thank you.

Thank you very much.