Key Highlights

  • Harmoney (ASX: HMY) reported FY2026 Cash NPAT of $13.5 million, up 139% from $5.7 million, exceeding its upgraded $13 million guidance.
  • Revenue increased 10% to $145 million, while the Loan book expanded 7% to $889 million.
  • Net interest Margin improved by 90 basis points to 10.2%, although Credit losses increased 20 basis points to 3.9%.
  • FY2027 Cash NPAT guidance has been set at $16 million-plus, while the company may resume its on-market buy-back of up to 5% of issued capital.

Harmoney Corp Limited (ASX:HMY) reported FY2026 Cash NPAT of $13.5 million, an increase of 139% from $5.7 million in FY2025 and above its upgraded guidance of $13 million. Harmoney shares were trading at $1.54 at 3:44 pm on August 20, according to the market data provided, down 4.63%, or 7.5 cents, on the day. The result also included an 86% increase in statutory NPAT to $10.2 million and new FY2027 Cash NPAT guidance of $16 million-plus.

Profit Growth Outpaces Loan Book Expansion

Harmoney's loan book increased 7% to $889 million during FY2026, while loan originations rose 21% to $482 million. The Australian loan book grew 14% to $556 million, and the New Zealand portfolio increased 11% in local currency to NZ$406 million.

Revenue increased 10% to $145 million from $132 million. Average portfolio interest rates remained at 16.9%, while the net interest margin increased 90 basis points to 10.2%. The improvement was supported by a 100-basis-point reduction in the average funding rate to 6.8%.

Cash Return on Equity rose to 33% from 16%, reflecting the faster increase in Earnings relative to the company's equity base.

Credit Metrics Show Mixed Movement

Credit performance produced both positive and negative changes during the year. Credit losses increased to 3.9% from 3.7%, representing a 20-basis-point rise. The figure remained within Harmoney's stated 3% to 4% target range.

At the same time, 90-plus-day arrears improved to 0.67% from 0.74%. Harmoney said this was less than half the Australian market average of 1.61%.

The wider net interest margin more than offset the increase in credit losses, with the Risk-adjusted income margin rising to 6.4% from 5.7%, an improvement of 70 basis points.

Automation Supports Operating Leverage

Harmoney's operating expenses increased at a slower rate than Revenue and loan-book growth. Cash operating expenses increased 3%, compared with 10% revenue growth and 7% loan-book growth.

The cost-to-income ratio consequently improved to 17.8% from 18.9%, a reduction of 110 basis points. The company attributes the improvement to automation and increasing scale through its Stellare® platform.

The platform is also being used across Harmoney's newer distribution channels, including its intermediary offering. The Australian intermediary channel launched in August and had already generated more than $1 million of car-loan originations, while the first New Zealand intermediary partner commenced during the fourth quarter.

Vehicle Lending Adds Another Growth Channel

Harmoney's vehicle loan portfolio grew 20% to $119 million and accounted for 13% of the group's total loan book at the end of FY2026.

The company has also agreed secured lending terms for a New Zealand Warehouse facility, which it expects to support the expansion of its secured car-loan portfolio while providing access to lower funding costs as that portfolio grows.

Existing customers represented an important source of origination growth. Harmoney reported that originations to existing customers increased 41%, with the company highlighting the relatively low Acquisition cost associated with repeat lending.

Balance Sheet and Funding Position

Harmoney ended FY2026 with $27 million of unrestricted cash, compared with $23 million a year earlier, plus a further $12 million of accessible cash. This position was achieved after repaying $7.5 million of corporate Debt principal during the December 2025 refinancing.

Total warehouse credit capacity exceeded $1 billion. The company reported $15 million of corporate debt at June 30, equivalent to 31% of shareholders' equity, compared with 65% a year earlier.

The remaining $860 million of borrowings represented non-recourse receivables funding within warehouse trusts and was secured against $909 million of trust assets.

FY2027 Guidance and Capital Management

Harmoney expects Cash NPAT to reach at least $16 million in FY2027. Management expects loan-book expansion in Australia and New Zealand, further Operating Leverage from Stellare®, and continued development of newer channels to contribute to the result.

The company may also recommence its on-market share buy-back of up to 5% of Issued Capital following the FY2026 results. During the fourth quarter of FY2025 and FY2026, Harmoney acquired and cancelled 1,050,596 shares under the buy-back.

Conclusion

Harmoney's FY2026 results show a substantial increase in profitability alongside continued loan-book expansion and improved funding economics. Cash NPAT rose 139%, revenue increased 10%, and the net interest margin widened, while credit losses moved higher but remained within the company's stated target range. The improvement in 90-plus-day arrears and lower cost-to-income ratio provided additional positive operating indicators. For FY2027, Harmoney has set Cash NPAT guidance of $16 million-plus, with growth expected from its existing Australian and New Zealand lending operations, vehicle loans and intermediary distribution channels, although credit performance, funding conditions and broader consumer lending conditions remain relevant factors for the business.