Plenti Group Limited ($PLT)

Good morning, everyone, and welcome to Plenti Group Limited's Fourth Quarter 2026 Trading Update. [Operator Instructions] Today's presenters are Adam Bennett, Chief Executive Officer; and Miles Drury, Chief Financial Officer. [Operator Instructions] I will now hand over to Adam Bennett, Chief Executive Officer of Plenti. Please go ahead.

Thanks, Leon, and welcome, everyone, to the call. Now Plenti is a high-growth profitable digital lender to prime consumer and commercial borrowers. We leverage our proprietary technology platform to deliver outstanding outcomes and customer experiences and deep partner integrations. And this is helping us grow our market share very rapidly across our 3 verticals of automotive, renewables and personal loans. We've got an enviable 10-plus year track record in very disciplined and effective credit, and we've got very deep and diversified funding and a long-term focus on the creation of shareholder value. I'm delighted to once again be presenting an outstanding set of results for the fourth quarter ended March 31, 2026. The entire Plenti team across all aspects of our business has worked extremely hard on all fronts to deliver great results for our customers, for our strategic partners and brokers and importantly, for you, our investors. Now these results continue to demonstrate the leverage in our business, our differentiated data, technology and credit capabilities and our ability to forge deep relationships and strategic partnerships. Pleasingly, during Q4, we've been able to maintain the momentum that we've established to deliver another great quarter of loan originations. As usual, Miles Drury, the CFO, and I will talk you through our results, and then we'll ensure we leave some time for questions at the end. But let's jump straight in. So we, Plenti, had an outstanding quarter for quarter 4 on all the metrics that matter across loan originations, credit performance, revenue and funding. Our Q4 loan originations were $475 million, up 17% on PCP. And we once again set a new record daily originations level throughout the month -- throughout the quarter. This took the loan portfolio to $3.1 billion, which was extremely pleasing. It's 22% above PCP and 4% above prior quarter and a full $100 million above where we projected we would land the year when we set our very ambitious targets last year. These results drove our cash profit before tax to $30.8 million, unaudited, up 117% on PCP and our FY '26 cash NPAT of $27.3 million unaudited, up 97% on PCP. This is a great achievement and for the entire company and really a clear signal that our fast, easy, simple, consistent lending proposition really resonates with our customers and that our proprietary technology platform continues to deliver for our brokers and our strategic partners. And as I mentioned before, it's also a testament to the hard work of the entire Plenti team. Now we have a strategy, a very deliberate long-term strategy to be a large lender in big markets. And all 3 of our verticals, including automotive, renewables and personal loans performed well. Our automotive loan originations were $251 million, up 29% on PCP, driven by both consumer and commercial and slightly up 1% on last quarter. Our new commercial auto proposition has landed well in the market with solid support from brokers and good uptake by new customers. We also saw pleasing volume growth in NAB, which I'll talk to in a second. Disappointingly, demand for consumer auto just slowed somewhat, delivering a softer result. But our renewables loan originations were a record $68 million, up 30% on PCP and 4% on prior quarter. This was driven by strong demand across the country, spurred by federal and state government incentive programs such as the WA battery scheme for battery and solar uptake. And we saw very positive growth in the flexing of the supply chains across the country as installers and importers get their batteries and installations accelerating in terms of that demand. So we see that as very positive. Our personal loan originations were $157 million, down 2% on PCP and 5% on prior quarter as we saw some seasonal effects, some pricing competition and some consumer demand impacts playing out. On the personal loan front, though, we are continuing to invest heavily in our proprietary technology stack to support our competitive positioning, and that was including our straight-through processing, where we continue to invest, and we launched an entire new borrower journey delivered much faster by using AI coding and AI-enabled development. Finally, we saw continued growth in our NAB powered by Plenti lending proposition, so with average loan originations per day increasing by 35%, taking the loan portfolio to $121 million. It's very pleasing to see the impact of a range of initiatives we said we would do last quarter. We implemented those with NAB to drive top of funnel growth and also to improve the conversion rate. In summary, I'm extremely pleased that our continued momentum in loan originations helped us exceed our ambitious target of $3 billion by $100 million for the full year. Plenti's total loan originations benefited from our diverse and complementary channels to market, and operating across attractive prime lending verticals allowed us to take advantage of shifts in the market conditions to deliver consistent profitable growth. It's also a clear function of how our company continues to grow and scale as designed and demonstrates that when all aspects work well together, including business development, underwriting, operations, fulfillment, our technology, we deliver a great result. The Q4 result is also the culmination of several active decisions, but very deliberate decisions we've made as a result of refreshing our corporate strategy. Number one is continued investment in our proprietary technology platform. We're removing the friction, delivering a fast, easy and consistent customer journey and broker journey. And this includes deploying Agentic AI tools to assist in customer servicing, sales engagement and supporting our technology engineers to code and develop IT faster. Number two is an investment in operations and straight-through processing. We want to ensure that we can process all incoming applications as fast as we can according to very strict and fast SLAs. And that's something we've put a lot of focus in, and it's a commitment to our customers and our brokers that we keep delivering a very fast, easy and consistent experience. And again, we used AI tools throughout that process to ensure better customer outcomes and also to improve some of the efficiency. And number three is we continue to leverage our deep relationships and complementary distribution channels. We're seeing continued strong volumes from our strategic partners and volumes across all of our verticals and all of our relationships. So I'll now pass to Miles, who'll speak to margins, credit performance and overall profitability.

Thanks, Adam. I mean it's great to close out the FY '26 year with another really solid quarter. I'm talking first to margin. I think it's fair to say that this was an area with some challenges we needed to overcome in the quarter. You'll recall that in the last quarter, we faced into some rising funding costs, and we were actively increasing our customer rates to offset that. Obviously, there was the small matter of a war in the Middle East that occurred in the quarter, particularly in March. And those expectations of energy-driven inflation did see a step-up in swap costs, particularly in the March month. As a result, our overall blended new origination margin for the period was on the slightly lower side at 5.4%. But I have observed before that overall, on a book of $3 billion, one quarter with slightly lower originations doesn't have a huge impact. I think really importantly, we also benefited in the period from some really strong warehouse and ABS outcomes. And the repricing effect of these transactions was more than sufficient to offset the impact of the tighter new margins on originations. And what we've actually seen is that the portfolio margin in Q4 was, therefore, above the average portfolio margin in the first half, notwithstanding those margin impacts. And I think that's a really strong outcome for the business and a testament to the funding capabilities of Plenti. In terms of credit, as you can see from the numbers, another really strong credit quarter for the business. Realized losses at 96 basis points is a great result for the business. And the fact that 90-plus day arrears were stable at the end of the quarter at 42 basis points, suggests near-term stability in the credit position. Obviously, we're alert to what's happening around the world and the macroeconomic effects of the Middle East. But I think it's fair to say that regardless of what the next 12 to 18 months delivers in terms of the overall picture for Australia, our disciplined approach to credit, our prime focus, our high-quality book puts Plenti in a really good place to navigate through as the situation evolves. In terms of funding, as I noted earlier, we had some really good funding outcomes in the quarter, and I think the highlight of that was the $400 million PL Green ABS that we priced in February. This was another outstanding trade for the Plenti business and shows that the consistent high-quality credit outcomes that Plenti is delivering are well understood and recognized by debt investors. We had a record number of investors participating in that transaction for Plenti deal, and we priced at about -- on a blended basis, about 25 basis points inside the comparable deal that we did in May 2025, which at the time, I actually thought was a very good transaction as well. That's Plenti's 12th ABS transaction, and it brings our lifetime origination to over $4.7 billion. So it's fair to say that we're now very well established as a scale, consistent issuer of high-quality transactions into the market. I think it's probably also worth noting, obviously, there have been some market shocks through the end of the quarter. It's good to see that ABS markets are still functioning pretty effectively, and there is good demand for Australian ABS paper. We've seen some peers complete successful transactions over the last couple of weeks at margins that while still slightly higher than they were in February, are still very attractive on a medium-term basis. So that's been positive to see. I guess the other balance sheet development to really call out for the period was the fact that we were able to repay $12.5 million of corporate debt, which brings our corporate debt balance down to $20 million. The ability to start to repay corporate debt reflects the increasing cash flow generation of the business as our cash NPAT increases as well as some of the really good funding outcomes we achieved and the ability to bring down the amount of equity we need to hold against the portfolio. Even though we repaid the $12.5 million in the period, I'm pleased to say that actually our available corporate cash balance at the end of the period was actually higher than it was as at the end of September, which just talks to the level of cash generation through the last half, which is really pleasing to see. So overall, a really, really solid fourth quarter for the business, which supported an outstanding set of results for the overall Plenti Group for the FY '26 year. We were really pleased to again be able to deliver against all 3 of our objectives that we set at the start of the year, covering growth, profitability and efficiency. As Adam has mentioned, cash PBT of $30.8 million was up 117% on the prior year. Cash NPAT, and obviously, we are now moving into partial tax paying, which is why we're giving both numbers, was up 97%, notwithstanding that additional cash tax drag for the year. So a really strong out in terms of profitability. This result was underpinned by excellent originations and loan book growth, which Adam has talked to, the fact we're able to get to that $3 billion target a couple of months ahead of where we originally said. And also, as the business continues to scale, and this is a core focus of ours, profitability is supported by the opening of what we refer to as the profitability jaws, so net margin growing faster than operating costs, we were able to come in under the target we set or the threshold we set of 57% with a cost to net margin result of 56.7% in the period, and this compares to 60.7% in FY '25. So continuing to step that operating leverage up and show the results as they drop to the bottom line for the business. So overall, a great set of results. And with that, I'll pass back to Adam.

Thanks, Miles. And it's great to finish Q4 having delivered all the things that we said we would do with regards to those 3 elements of guidance. And as Miles mentioned, it's great to see that the cash generation flywheel of the business is really continuing to spin up and enabling us to pay down a significant part of our corporate debt and to self-fund our ongoing lending. In closing, we finished Q4 extremely pleased with the momentum across our entire business. We've continued the active implementation of our corporate strategy. We're making progress against our clear goals. We've aligned our people to execute that strategy with enthusiasm, confidence and determination, and this is delivering a great set of results across all of the metrics that matter for our company. So let me pause now and answer any questions that might be on the line.

[Operator Instructions] The first question comes from Lachlan Woods from Canaccord.

Do you mind just talking through the step-up in the NAB products in terms of originations? Like was that across the broad and what drove that? Or was it more like the EV product specifically?

Across the NAB?

Yes, for NAB.

Yes. If you recall in Q3, we -- at Q3, we highlighted the fact that NAB wasn't as high as either NAB or us wanted it to be. We thought it had more potential. So we did outline some of the activities that we would be collectively doing with NAB to really drive that, and that was really about improving the amount and volume through the funnel and then improving, which is kind of NAB's part of that and then improving the conversion rate through the funnel, which is our part of that. And so we work very closely with NAB to make sure that was the outcome we were able to get to. So it was very pleasing to see the impact of those initiatives play out during the quarter, and that's what has driven the increase in volume.

So it's pretty broad-based and across a whole range of initiatives that we've been active on in the period.

Perfect. And then just given, I guess, you are obviously having to increase your pricing on your products just given obviously the cost of funds have stepped up. Can you kind of just talk us through the competitive landscape? And is it like completely rational? Or is there anything to point out there?

Look, I would say, I think it is broadly, broadly rational. As we always say, there are slightly different dynamics in different markets, and different segments of markets. But if you look across what the major competitors have been doing and the people that we really look to as core competitors, everyone has been moving prices up. And given the change in swap costs over the period, you'd absolutely expect that. So we can see and we track sort of day-to-day, week-to-week what competitors are doing and all of them are moving their prices up, slightly different -- slightly different timing, and we're probably slightly more on the front foot in terms of that. We are focused on running a profitable business. But overall, I'd say the markets have been sensible and broadly rational. It's just that there is a timing and transition effect. Obviously, you see swap costs move and pricing doesn't adjust sort of the day after. And so you do see that transition effect coming through, which we had in the period.

The next question comes from Lachlan Scott, and it reads, great outcome on NIM management given the interest rate environment. But to what extent do you think higher interest rates will weigh on originations in subsequent quarters? Should we expect the shape of originations to remain stable at $475 million per quarter from here as consumer demand impacts play out?

Do you want to get that one?

Yes. Look, we're not at this point wanting to really give some forward projections for what we think might happen from here on in. We'll be doing that in May when we do the full year results, and we share kind of an update on strategy and outlook and all those types of things. But picking up on the thematic of the last question, what we really want to make sure we do is we continue to offer a very competitively priced and competitively positioned set of loan products in terms of being fast, easy for customers and also for our brokers, and we want to keep the foot down and keep our originations engine really kind of accelerating, but we'll go into a lot more detail in May. Is there anything you want to add?

No, I mean, obviously, higher rates is -- you put the price of anything up, it's not necessarily helpful for us, but as Adam said, our focus has got to be the big markets we're in and what do we do to differentiate and win market share regardless of whether it's rates, consumer sentiment obviously has an impact on credit demand. We've just got to be delivering the best experience, the best product that we possibly can because there's plenty of market share out there, and that's what we need to focus on.

Yes. I mean the key thing on my mind is we have very, very, very small shares of very, very, very large markets. And so we really want to make sure we get a disproportionate share.

The next question comes from Michael Beasley, and they ask, can you give your current views of capital management given strong cash flows and paying down corporate debt?

Look, I think -- I guess that question there is around the balance sheet, corporate debt, dividends, those sorts of questions. I think, obviously, what we've seen in this period, it was really pleasing to see both the operating cash flow and our ability to be capital efficient from a funding point of view, delivering some really good cash flows. We've obviously made the decision at this point in time to reduce debt, which I think is absolutely a prudent decision to make, particularly in a slightly more volatile broader environment. In terms of the go-forward position, obviously, the Board continues to make those decisions depending on exactly where the business is at but continue to strengthen the balance sheet. And over time, particularly at a point in time, once we actually start paying cash tax, the question of dividends is definitely on the Board's mind. But clearly, I can't be precise as to how if and when, but it's definitely under review, but we think at the moment, continuing to improve the strength of the balance sheet was the right thing to do with the cash position that we have.

Yes, 100%. And the only thing I would add to that is as we remarked earlier, the initiation of the financial flywheel has started in terms of the balance sheet and the generation of free cash flow. So we think that's a really important milestone and inflection point for the business, and we want to keep that flywheel spinning even faster.

The next question comes from Akash Todkar, and they ask, to what extent is the quarter-on-quarter growth flattening driven by competition, risk selection or macro headwinds?

I think my view would be, it's a combination of everything that's happening. I think there are a couple of points, one, this quarter is generally a seasonally slightly softer quarter. January is typically pretty weak because everyone is on holidays, which is understandable. I think you had pricing effects through there. We've obviously been improving -- increasing our prices. And I think we do tend to be a little bit more front-footed. As I said, we're focused on business profitability and inherent profitability. Obviously, we're in a slightly more volatile macro environment. Different markets have different shifts. EVs, for example, had a brilliant last month or so because everyone wants to buy an EV now. That's one of the benefits of the diverse markets we play in. Renewable has obviously had a great period. There's lots of underlying demand there. Consumer appeal, consumer auto probably a little bit softer, probably a bit more of the macro. So look, I think it's a combination of all of the different factors. Again, as Adam said, what we need to be focused on going forward is just how do we execute from a really disciplined point of view, leverage our digital technology advantages, deliver great proposition to customers and keep taking market share.

Yes. And the other thing I'd add to that is the -- we are very deliberate about having a set of diverse and complementary distribution channels into the 3 markets and now 4 verticals that we are focused on. And they each have different characteristics, so -- as Miles mentioned. So we want to build that out. And I think we're building quite a unique set of distribution channels and markets, and that's really our strategy. So consumer auto, commercial auto, personal loans, renewables, they each have different characteristics, but we want to really succeed in each of those 4 verticals.

The next question comes from Tim Curtis, and they ask, in order to drive further growth in personal loans, are you considering selling to customers with lower credit scores and broadening your credit appetite?

Yes. I think maybe I'll make some comments on that and Miles can follow up. I mean we really do have a focus on prime borrowers. That has been our kind of North Star for the last 10-plus years. And I think that is very much at the heart of our credit engines and the way we think about credit and is actually the largest part of the market. So we believe that, that is the place where we want to play, and that is absolutely our focus. And it was interesting to see our Q4, our average Equifax score went up from 849 to 850. So we are certainly very much focused on that prime borrower cohort.

Well, I think my observation would be are there always opportunities within that prime segment to -- if we were not at 850, at 830, on a risk adjusted basis, could we be more [ nimble ], and we're always looking at ways to try and find the right optimization shift. And so that's obviously not lending to 300 credit scores, but could we get more 600, 700 into the book. We're always looking at ways to do that. But I think at the moment, we've also got a very sensible eye to the broader macro environment as well, and we want to make balanced risk decisions within the environment that we play in.

[Operator Instructions] As there are no further questions, we'll now conclude the webinar. Thank you for joining Plenti Group Limited's Fourth Quarter 2026 trading update. Good morning.

Thank you.

Thank you very much.