Plenti Group Limited ($PLT)

Good morning, everyone, and welcome to Plenti Group Limited's 2026 Results Presentation. [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,Liam, and good morning to everyone who's joined the call. It's fair to say that Plenti team has delivered an outstanding set of results for FY 2026. And I'm here with Miles to walk you through the deck, and as Liam mentioned, leave some space for questions and answers. But I just wanted to acknowledge really the Plenti team right upfront. They've worked extremely hard on every front really to deliver for our customers, for our brokers, our strategic partners and most importantly, for you, our shareholders. So let's jump straight in. So obviously, Plenti is a high-growth, profitable and cash-generative digital lender with over $3 billion in prime consumer and commercial loan book. And our digital technology platform really sets us apart and allows us to deliver amazing experiences across a diverse set of lending verticals. And this diversity allows us to adapt to market conditions, and we've started generating meaningful cash to self-fund our growth. We're ambitious about growth, and we have a deliberate long-term strategy to become a more significant resilient digital lender in our chosen markets. We'll do this by using our digital platform to better assess risk, to enter new markets and to continue our track record of strong results. Our mission really is to build Australia's best lender as judged by our customers, our employees and our owners. The Plenti platform efficiently supports our lending verticals across automotive, renewables and personal loans. And this platform is a key differentiator that delivers great customer outcomes across all 3 of these market verticals. The Plenti platform makes us more cost-effective, is designed to be scalable and extensible into different markets and channels and delivers operating leverage as we go. The Plenti platform is also at the heart of our approach to lending and competing within our chosen markets and is delivering high growth. We achieved our ambitious $3 billion loan book a full 2 months earlier than anticipated and targeted. The platform easily supports different channels and these fast, simple and easy customer journeys are delivering profitable growth. In FY '26, we achieved a record cash profit before tax of $30.8 million, a full 117% above FY '25. This profitable growth is obviously cash generative, and I'm extremely pleased that we generated $20.6 million in corporate cash and we're able to pay down $12.5 million of corporate debt during Q4, and we still ended the quarter with increased corporate cash levels. We also announced today that we've recently established an employee share trust to help facilitate equity plans. And given the availability of corporate cash and our current financial position, Plenti intends to use this trust to acquire up to a maximum of $3 million worth of shares on market that will then be used to satisfy some of our obligations to participants in those plans. Now Plenti had an outstanding FY '26 on all of the metrics that matter to deliver cash PBT of $30.8 million, as I mentioned. In a nutshell, we delivered on our FY '26 guidance across loan originations growth of 32% above PCP to achieve the $3.1 billion loan book. Our cost to net margin reduced to 56.7%, demonstrating the leverage achievable as we scale and our cash NPAT was $27.3 million, a full 97% above PCP. And additionally, we continued our enviable track record of strong credit outcomes with closing 90-plus days arrears at 42 basis points. Now Miles and I will talk you through the following elements. Macro markets, I'd like to talk about how we look outward at the world and the positive elements we see our competitive advantages, and I'll share some of the key things that differentiate our business and the things I'm most excited about. And financial and operational results. Miles and I will cover off these in some detail. Strategy, I'll talk about that what we've achieved and importantly, what's now ahead of us. And finally, I'll talk about our outlook for Plenti in the coming year, and we'll also make sure there's time for your questions. Now it's obvious that our world is continuing to change. Global geopolitics has flared up again, and there is an uncertain macro with regard to oil prices, inflation, interest rates, employment and the government's resulting fiscal policy. This is true for the Australian economy, it's true for the financial services industry, and it's true for Plenti. However, I refuse to be intimidated by these forces, and my enthusiasm and excitement for this business and its potential is continuing to grow. And that's because Plenti benefits from attractive markets that demonstrate growth and positive margin opportunities through time. You'll see from this graph, the orange dotted line that the Australian 3-year monthly bond rate as an indicator of our cost of funds has been relatively volatile over recent years. During this period, we've seen RBA rate cuts, RBA rate rises, we've seen Trump's liberation day tariffs on top of the Ukraine-Russia conflict, and now there's a war in Iran. Through all of these changes, Plenti has continued to make money with an incredibly stable portfolio and net interest margins shown by the blue line. Through all of these changes, we have maintained effective NIM above our cost of funds. And through all of these changes, we've grown the loan book each year from $1.8 billion to now reach $3.1 billion. Within this overall macro context of attractive returns through time despite volatility, I'm very excited about our business because Plenti's proprietary technology enables our growth across several large prime lending verticals including automotive, renewables and personal loans. Now all 3 are incredibly attractive markets for us with strong continued growth being driven by Australian demographics and a growing population. The ongoing desire of Australians to borrow money to achieve their financial and life goals and the value of things being financed continuing to grow. And in the case of our renewables business, both state and federal government incentives and geopolitical forces have shined the light on fossil fuel consumption and excuse the pun, further energize the renewable sector. We're also thinking about technological change and what this will bring to society. For example, we're already financing far more EVs in our auto business and as home automation and personal robot technology inevitably develops, I anticipate people financing the purchase of these 2. So we are in very, very vibrant markets. We're also feeling extremely ambitious about the size of these markets and how much runway we have. Despite our continued strong growth, we have very small shares in the auto and PL market. And at Plenti, we have a deliberate long-term strategy to be a much larger lender. And when I look at the total addressable market, we need to secure just an additional 1.7% of this TAM to capture another $1 billion of loan book. Let me now talk about Plenti's competitive advantages and the great foundation to this business. And we do have proven competitive strengths that work together to deliver consistent performance and growth momentum. There are 3 key interrelated differentiators that I think set Plenti apart, and this is the digital platform, our diversification and our risk management. The Plenti digital platform delivers outstanding customer experiences across our lending verticals, and this makes us more cost-effective and creates operating leverage as we grow. We also operate across diverse and complementary lending verticals and channels that allows us to take advantage of shifts in market conditions to deliver consistent profitable growth. And lastly, our prime credit focus and disciplined risk management underpin a very resilient business. Let me bring a little bit more life to these. The essential heart of these differentiators is the Plenti platform, which delivers outstanding customer experience, diversity and the track record. And this drives consistently low loss rates supporting growing profitability. We have control of our platform, which significantly reduces reliance on third parties, and this helps us to be fast and agile and deliver rapid product generation. For example, we set up the West Australian battery scheme in just 6 weeks, and we've created subvention campaigns for Tesla in a matter of weeks. Our platform market sector not only facilitates deep partner integrations but also scales to enable the reuse of capabilities across all lending verticals and take advantage of additional growth opportunities. The diversification enabled by the platform makes Plenti somewhat unique. There doesn't seem to be any other lender quite like Plenti operating simultaneously across consumer auto, commercial auto, renewables and personal lending. And this is heightened by our complementary and diverse distribution channels across our own proprietary digital channel and our brokers, installers, OEMs like Tesla and Cadillac, NAB and an exclusive rebate administration arrangement with the WA government. All of these reduce our single reliance on a single channel or market. Plenti's purpose-built credit engine leverages data and AI to better assess risk and deliver consistently low loss rates. And our platform is highly responsive to changing loss trends, macro conditions and borrower performance, enabling the rapid adjustment of our underwriting rules and settings. And when you combine these strategic differentiators with our loan origination growth, consistently low losses and cost leverage, we believe we've started a virtuous cash generation flywheel. It all starts with continued investment and in FY '26, we invested $15.9 million into the Plenti platform, which is entirely expensed through the P&L. The increased level of straight-through processing and implementation of AI solutions within the platform adds cost leverage as we scale, this reduces our cost to net margin, which contributes to our steadily growing cash profit. The platform's in-build credit engine and disciplined decisioning delivers low loss rates, which not only improves our profitability, but leads to better treasury outcomes as Plenti's debt investors increase their confidence in us and require lower levels of equity in our lending structures, which also contributed to our steadily growing cash profit. And continued investment in our platform ensures that our fast, easy and simple journeys continue to resonate with consumers and brokers is leveraged across multiple channels, and helps us penetrate large and attractive markets to keep driving our growth, which contributes to our steadily growing cash profit. Now I realize it's easy to talk a good game about the things that differentiate and you'll hear from others about how good their systems are, but with Plenti, we believe that the proof and validation of our competitive advantage is definitely in the set of differentiated results we've been able to achieve. So Miles and I will now talk through Plenti's results for FY '26. So Plenti continued its strong growth trajectory in FY '26 across all verticals and distribution channels. The loan portfolio grew with a 3-year CAGR of 21% to over $3.1 billion with profitable growth in each of automotive renewables and PLs. This drove meaningful revenue growth with a 3-year CAGR of 30% to over $310 million. And we once again saw continued momentum in loan originations delivering an 18% 3-year CAGR. And the strategic differentiators I just mentioned across technology, diversity and credit have combined to more than double our cash PBT to $30.8 million, a full 117% above PCP. So let me now drop into some additional detail on our 3 lending verticals. Our automotive loan book continued to grow strongly, supported by diversified distribution across brokers, OEM partners and NAB. We originated $994 million in new loans to close the loan book at $1.779 billion. This represented loan originations growth of 29% on PCP, with strong growth across consumer and commercial. And this growth came from leveraging and growing broker relationships, offering great customer service, continued product and policy enhancements that make things easier and simpler and working closely with OEMs such as Tesla and Cadillac. We also saw the early benefits coming from our refresh and relaunch of our commercial auto lending proposition, which I'll talk to a little later. Our renewable loan book grew significantly, driven by demand for solar and battery systems spurred by federal and state incentives. We originated $239 million in new loans to close the loan book at $427 million. This represented loan originations growth of 26% on PCP, with strong growth from our national installer base and our exclusive administration and financing of the West Australian battery scheme. And the volumes from this game have exceeded our expectations. We also continued the expansion of our unique GreenConnect platform with the addition of several energy retail partnerships, broadening out the VPP offering and make it even more useful for our customers. With the ongoing war in the Middle East increasing cost of fossil fuels, I'm confident that the societal electrification drive for solar panels, batteries and EVs will continue to grow at an increasing rate, and we're extremely well placed to benefit from this. We also had significant growth in personal lending, which was driven by technology enhancements in our credit engine, customer journeys and third-party integrations. We originated $636 million in new loans to close the loan book at $900 million, and this represented loan origination growth of 23% on PCP across both the direct and broker channels. We've made investments in the credit engine to improve the customer journey, driving increased strike-through processing, which for us means no human touch that improved decisioning rates, and we've also implemented numerous AI use cases across bank statement and document review, automated testing solutions for application workflows, technology engineered copilots to assist in faster and better coding, and customer contact center to help operators answer questions and document calls. We once again saw the NAB powered by Plenti car loan continue -- offering continue to gain traction across the NAB customer base, especially in Q4 where we saw a 35% increase over Q3 daily originations taking the loan book to $121 million. We've agreed with NAB to bring forward our contractually scheduled review and to support greater investment in growth activities by NAB to drive higher originations. We've agreed to bring forward the scheduled step down in the upfront fee per loan funded and removal of the associated guaranteed minimum. Monthly value of the upfront fees. We've also agreed to a reduction in the level of the monthly service fee and subsequent schedule for scaling down of the service fee as the loan portfolio now continues to grow. These revised terms provide far greater flexibility for Plenti and NAB to invest in mutually beneficial marketing and promotional campaigns for growth. This will also facilitate the expansion of distribution through NAB's banker-assisted channels over the coming months, and we'll continue to optimize the customer journey to further improve conversion rates. In addition, NAB has conditioned -- committed to launching the renewables referral program previously announced as part of the NAB's strategic partnership with an anticipated launch date of first half FY '27, which we're very excited about. Let me now pass to Miles to talk you through some of our detailed financial results.

Thank you very much, Adam. On Slide 19, this slide summarizes some of the key financial drivers and results of the FY '26 year and there's an awful lot to like. The business performed very strongly across basically every financial metric. Growth was strong, margins expanded, loss rates were down and operating efficiency increased. This led to an overall doubling of cash PBT and a significant increase in business cash generation, and I'll talk through some of the details in the following pages. On Slide 20, with excellent originations growth of 32% in the prior year, Plenti grew our loan book strongly. This page focuses on average loan portfolio, given it is the average portfolio that drives financial results. The average portfolio was up 23% year-on-year, with 43% growth over the last 2 years. Portfolio growth with fairly stable customer margins saw interest revenue increased to $305 million and total revenue increased to $312 million. I note that loan amortization did tick up slightly again to 3.8% across the year, which, as I've noted previously, at least in part reflects the solid cash position of consumers with the corollary being a low credit loss rates. Slide 21 in relation to margins. Increasing our net interest margin was something of a highlight for me this year given that Plenti does operate in competitive markets. We continue to seek to differentiate our offer to customers through great digital experiences rather than competing purely on price. The key driver to highlight, however, is very strong outcomes in relation to funding this year for both warehouse and ABS structures. While debt market conditions were certainly a tailwind, the strong pricing results we delivered also reflect investors' appreciation of Plenti's consistent and strong credit results and increasingly well-established track record. The full year results and particularly the second half results, where we slightly increased margin on the first half was very pleased given the significant increase in market funding costs that we faced into from around October onwards. To be able to absorb the impact of some front book margin pressure and increased portfolio margins due to efficient funding was a great result for the business. You will see that the average margin on new originations in April was 5.7%, which is a tick up from the 5.4% we disclosed in the quarterly at Q4. So it's good to see new origination margins getting back towards our target levels. Talking to credit. Credit has been consistently strong through FY '26 and with the average related credit loss results of 94 basis points a real standout. What is equally important to me is the stability of Plenti's credit losses over the last 3 years. This is a testament to the strength of Plenti's credit evaluation processes and the overall quality of our loan portfolio. As we have consistently talked to, the type of consumer that Plenti lends to are in a good financial position, and this has been borne out in our credit results. We should also always acknowledge that the excellent originations and loan book growth that the business has put on this year will slightly flatter credit loss numbers. It is not surprising that the underlying ECL provision decreased during the year given portfolio loss performance and strong arrears. But we did make a decision to increase the macroeconomic overlay at 31st March, given risks arising from the conflict in the Middle East. Even with this, however, the provision as a percentage of the portfolio reduced from prior year. As reflected in the April actual credit results, there is nothing we're seeing in actual data showing a meaningful shift in consumer positions albeit we remain alert to how the economy develops over the year, as Adam has talked to in the macro environment. On Slide 23. This is our usual representation of cost operating leverage in the business. showing the relationship between net interest margin dollars, the cash we have to fund the business and operating costs. Over the last 5 years, Plenti has consistently opened the profitability jaws as the business has scaled, which should absolutely be the case given the entire design of our digital-first business is intended to allow us to scale efficiently. As we flagged at the first year result, we did a bit more investment in the second half with a view to setting the business up for future growth. But despite the increased spend, we were still able to reduce net cost to margin to 56.7% for the full year, down from 60.7% last year. Slide 24 brings together the financial drivers as outlined above in the profit and loss statement. It's hard to not get excited about the P&L this year, where cash PBT doubles to over $30 million, a great result. I won't go through the detail given it just reflects the various key lines I've discussed on prior pages. I will call out the tax line where there were a range of moving parts in both FY '25 and FY '26. For those investors who review the detail closely, there are various reconciliations in the presentation appendix. In terms of cash tax, our implied rate for FY 26% was about 11%. However, the really strong profitability delivered this year, we have now used up all of our historic carried forward tax losses. As a result, cash tax next year will be much closer to the statutory rate of 30%. Hence, why we demonstrate both the cash PBT and cash NPAT number to understand the trajectory of the business. FY '26 was a watershed year for Plenti in terms of cash generation from the business as growth and profitability flowed through to growing operating cash flow. As we've noted numerous times before, Plenti expenses all technology spend, and therefore, cash NPAT and operating cash have a direct relationship. In FY '26, Plenti generated $21.8 million of underlying corporate operating cash. Equally important this year with some very strong outcomes on our funding structures, both warehouses and ABS transactions, which allowed Plenti to reduce our blended equity contribution across the portfolio, releasing back cash to the corporate balance sheet. As a result of these two very strong outcomes, we were pleased to repay $12.5 million of corporate debt towards the end of the year while still seeing an increase in available corporate cash of $8.1 million as demonstrated on the bridge. Finally, in relation to funding. FY '26 was a standout year for Plenti and the treasury team. Certainly, favorable debt market conditions were a helpful backdrop, but the results delivered across our ABS and warehouse funding structures were also a reflection of the very good credit track record Plenti has built up over 10-plus years and excellent execution by the treasury team. We achieved record volume of ABS issuance at very attractive margins with lower capital contribution requirements for Plenti and introduced numerous large quality investors to the Plenti program. With close to $5 billion of ABS issued and additional warehouse capacity secured in the year, the Plenti funding platform is very well placed to support ongoing growth in the business. And on that growth note, I'll pass back to Adam to talk about the strategy and outlook.

Thanks, Miles. So having executed Horizon 1 successfully will now grow by also doing new things in Horizon 2. You'll recall that we refreshed our corporate strategy as we entered this year, and I'm extremely pleased with the successful execution of our Horizon 1 objectives. We grew by doing what we do better across customer experience, automation and increased conversion rates whilst implementing product pricing and credit optimization and straight-through processing initiatives. Above all, we did what we said we would do and delivered a $3 billion loan book a full 2 months earlier than targeted. Our focus for the coming 2 years of the Horizon 2 is to now grow by also doing new things. The word also is important because as you see from the graphic, we will continue to optimize and do some of the things well that we've been doing in Horizon 1. This means we'll continue to optimize carry forward opportunities while pushing into new adjacent opportunities where we can leverage the Plenti platform, increase our diverse markets and channels and directly leverage our credit expertise and automated decisioning engines. This means looking at new strategic partnerships, adjacent product opportunities whilst continuing to invest in growing our capabilities that improve our digital platform, build deep relationships and leverage data and AI to strengthen our credit capabilities. Horizon 3 is all about us leveraging the optionality that we've created by growing in Horizons 1 and 2 via additional products or potential acquisitions. And as I've mentioned, we have a deliberate strategy to be a more significant lender. So given the attractive returns from our relatively small shares of existing large markets, continued focus here makes absolute sense for this business. Our current investment focus is to continue optimizing our consumer auto proposition and increased straight through processing rates. We've extended our renewables offer to include air conditioning and energy-efficient appliances. We've relaunched our BNPL product, and we'll continue to target third-party integrations. We'll also keep driving our straight-through processing rates up for PLs and continue to invest in the Plenti platform to take advantage of AI use cases, expand and optimize our credit appetite and enhance customer self-service. And in addition to this, we've also done a very disciplined environment scan, looking at NIMs, customer needs, relationship potential, competitive drivers to identify the next wave of Horizon 2 opportunities for Plenti. So in addition to our existing focus to grow consumer auto renewables and PLs, we've refreshed and relaunched our commercial auto proposition as our first horizon 2 opportunity. Now the commercial auto market represents a significant and logical opportunity for Plenti. To be clear, commercial auto product is aimed at SMEs and trades seeking finance for cars, used small trucks using their ABNs. And it's a segment that we've served for some time, albeit from our existing predominantly consumer-focused brokers, our consumer-focused and organized teams and with more of a consumer style extended product. Having mapped the commercial market opportunity extensively, we're very excited about what we've found in the scale of the opportunity, representing a flow of over $13 billion per year through specialist aggregators and commercial brokers. We've therefore refreshed and relaunched our commercial auto proposition within the platform with an updated product proposition, including features such as early termination fees, and we've recruited a national business development team that has started to engage an entirely new ecosystem of specialist commercial lenders. We've also built a dedicated commercial underwriting team and adjusted our operating model to ensure that we can serve a new set of brokers and customers. And so far, commercial auto is delivering exciting early loan origination growth momentum. We've mapped commercial aggregators with a combined 341 commercial-focused brokers within their networks and focused engagement of these is already delivering early results with the originations with this broker set growing 70% year-on-year. Just on Monday, we hosted a webinar for 200 of these brokers. Current strong loan origination growth also continues to be generated from our existing consumer-focused broker network. So all in all, we are seeing commercial loan originations continue to accelerate. Q4 grew 15% over Q3 and 68% over PCP. We've also seen early momentum in small truck financing, and we see a compelling opportunity to push into commercial asset finance adjacency once foundations are established. Let me close by talking about our outlook for FY '27. And let me start with a quick recap because Plenti has an outstanding track record of delivering strong results every year since listing. Plenti has delivered loan portfolio growth, profit growth and credit stability every year. And this consistent growth means that the business is now at a scale where it's self-funding and generating meaningful profit. Looking ahead, we remain laser-focused on 3 key objectives: growth, profitability and continued efficiency. Our FY '27 objectives are to grow loan origination momentum and exit FY '27 having achieved a $600 million quarter. And we'll also continue to drive meaningful cash PBT growth and drive our cost to net margin below 55%. Plenti's ambitious loan origination growth target would see an implied steady state loan portfolio surpassed $5 billion. So having achieved our ambitious target of a $3 billion loan book, and build quarterly momentum to exit FY '26 at $475 million a quarter, we're squarely on our way to a $4 billion loan book. Our goals for FY '27 is to now accelerate this even further so that we exit FY '27 having delivered a $600 million quarter. And if we continually repeated this through time, we would then see a steady-state loan book start to hit $5 billion in the medium term. Now before opening up for questions, I'd like to pause here and acknowledge this will be Miles' last set of results call, and I'd like to recognize his significant contribution to Plenti over these many years, and thank him for his hard work, his professionalism and his dedication to our company. He's played a critical role in laying down building on the foundations that make Plenti such a great company and helping it drive forward with regards to growth, profitability and efficiency. And I'd like to wish him every success in his future endeavors. Let's now open up for questions to Miles and myself.

Thank you, Adam. We will now take questions from participants. [Operator Instructions] The first question comes from Tom Tweedie from Moelis.

Well done, Miles, on a great tenure there at the business. Just a couple of ones from me. Just regarding April NIM of 5.7%. This may be outlook-dependent, but I just want to see what your thoughts are on whether this is a sustainable level for the full year? Or alternatively, what scenarios do we need to see to allow you to sustain this in a full year scenario?

Look, I mean we've seen a long stability in funding rates from a swap point of view over the last month or 2, and that certainly helps when you're not continually facing into an increase. So that's helped us get back. 5.7% is in the range of sort of what I would consider normal over the last couple of years. Our ambition is always to do a bit better, and it does depend a little bit on mix. So things can move up and down. And as we say in the presentation, I said you need to originate a bit above the loan book to maintain loan book coverages. But certainly, in an environment where you've got margin stability, this type of level, and ideally a little bit above it would be broadly consistent with what we've seen over the last few years.

Appreciate it. And just on the $600 million per quarter origination target. Just want to confirm, does that include NAB? And also what do you think in terms of the mix across the different verticals that sort of drives you to that target number?

So yes. So it's something that we've committed to within the year, Tom. And it's really reliant on all 3 of our verticals growing and continuing to grow. And as I've said, we've got very small shares in auto and PL, which we're looking to obviously grow disproportionately. So we're confident of getting more flow in those. And the renewables business of which we've got a larger share is continuing to grow as well. And that will include the NAB on -- included in that.

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

Thank you.