Solvar Limited (ASX:SVR) has declared fully franked dividends totalling 19.5 cents per share for FY26, a total that includes special dividends paid on top of its ordinary payouts. Its latest payment combines a fully franked 6.0 cent ordinary final dividend with a fully franked 2.5 cent special dividend. According to the company's Appendix 4E, no Dividend Reinvestment Plan (DRP) was offered for the FY26 final and special dividends.

Latest developments

Solvar reported its FY26 results, with normalised net profit after tax (NPAT) rising 7.5% to $36.1 million, while statutory NPAT fell 6.2% to $29.5 million. The company pointed to continued growth in its commercial lending business, with the commercial Loan book reaching $109.8 million at the end of FY26.

For the six months to the end of FY26, the board declared a fully franked ordinary dividend of 6.0 cents per share and a fully franked Special Dividend of 2.5 cents, together 8.5 cents. The half-year to December 2025 followed the same pattern, with a 6.0 cent ordinary dividend and a 2.5 cent special. A separate 2.5 cent fully franked special dividend, linked to the sale of the New Zealand written-off loan book, was also paid during FY26.

Solvar renewed its on-market share buy-back for a further 12 months. Managing director Scott Baldwin and director Stuart Robertson subsequently bought shares on market, according to change of director's interest notices lodged with the ASX.

Key numbers

Solvar declared three payments across FY26: a 2.5 cent special dividend in the first half, an 8.5 cent interim payment (6.0 cents ordinary and 2.5 cents special) and an 8.5 cent final payment (6.0 cents ordinary and 2.5 cents special), all fully franked, for a total of 19.5 cents.

Of the 19.5 cents, 7.5 cents came from the three special dividends and 12.0 cents from ordinary dividends. Franking credits are based on a 30% company tax rate, and their value depends on each investor's tax position.

About the company

Solvar, formerly Money3 Corporation, is an Australian consumer and commercial finance company focused on secured automotive loans. Its brands include Money3, Automotive Financial Services and Bennji, and it has been expanding its commercial asset finance lending. Its New Zealand business, Go Car Finance, ceased new lending in 2024 and is collecting its existing receivables.

Scott Baldwin is managing director and chief executive. As a lender, Solvar earns interest income on its loan book and funds those loans through a mix of Equity and Debt facilities. Its profits depend on growing the book while keeping Bad Debts and funding costs under control, which is why loan growth and Credit quality are commonly monitored alongside dividends.

How the DRP works

Solvar has a DRP, managed through its share registry Computershare, and its website states that when the company declares a dividend it will also announce whether the DRP applies. The company's Appendix 4E states that no DRP was offered for the FY26 final and special dividends, and its Appendix 4D states that no DRP was offered for the interim and special dividends earlier in FY26.

Where a DRP operates, shareholders elect to receive shares instead of cash, typically priced at an average Market Price over a set period and sometimes at a discount set by the board. Participants avoid brokerage, but they take on the same share price risk as any other buyer, and new shares issued under a plan can dilute holders who take cash.

Dividends and Capital management

Fully franked payments carry franking credits, which may have value for shareholders who are able to use them.

Special dividends are discretionary. The Ordinary Dividends declared for FY26 total 12.0 cents, with the remaining 7.5 cents coming from special dividends.

The buy-back is another form of capital return. Reducing the share count can support earnings per share, though it also uses capital that could otherwise fund loans or dividends.

What comes next

Areas of focus include growth in the loan book, credit quality, the pace of the buy-back and any update on trading at the company's annual general meeting. Management has said it expects continued growth in both its consumer and commercial lending portfolios in FY27, although outcomes will depend on market and credit conditions.

Future ordinary and special dividends, and whether the DRP applies, will be determined by the board and disclosed to the ASX. Special dividends featured in both halves of FY26, and there is no assurance that this pattern will continue.

Risks and context

Past dividends are not a forecast. The 19.5 cents of dividends declared for FY26 exceeded normalised Earnings Per Share of 19.0 cents, and statutory profit was lower than normalised profit, so any repeat of that level would depend on future earnings, capital and board decisions. Special dividends may not recur.

Solvar lends to consumers and small businesses, so rising arrears, cost-of-living pressure, funding costs and regulatory changes in consumer credit can affect profits. Where a DRP applies, reinvested dividends are still assessable income, and each DRP parcel sets a new cost base for Capital Gains Tax purposes.

Conclusion

Solvar Limited (ASX:SVR) declared 19.5 cents of fully franked dividends for FY26, including 7.5 cents of special dividends, alongside a renewed buy-back and on-market director purchases. No DRP was offered for the latest dividends, and the recurrence of specials, credit conditions and earnings coverage remain key factors.

Key Insights

Solvar Limited (ASX:SVR) lifted normalised NPAT in FY26 while statutory profit declined, and declared fully franked dividends that included a meaningful special component. Ordinary dividends accounted for 12.0 cents of the 19.5 cent total.

The company operates a DRP but did not offer it for its FY26 dividends, and it has indicated it will state on each declaration whether the plan applies. Future dividends, including any specials, remain at the board's discretion.