Cuscal management said the company delivered a solid first-half performance for the six months ended Dec. 31, 2025, supported by growth across its core capabilities and the initial contribution from the recently acquired Indue business.
Managing Director Craig Kennedy said transaction volumes rose 9% in the half, which helped drive 13% underlying net profit after tax (NPAT) growth. Cuscal’s board declared an interim dividend of AUD 0.045 per share, which Kennedy noted was in line with the AUD 0.045 pre-IPO dividend paid last year.
Indue acquisition and integration plans
Management described the integration as a multi-year program, with full run-rate cost synergies expected by FY 2029. Kennedy said early progress included setting up an integration committee, appointing Peter Wright to the board as a non-executive director, and establishing workstreams focused on execution, including planning for client migrations.
Chief Financial Officer Jennifer Brice, who joined in October 2025, said Indue contributed one month to the half-year results, and Cuscal provided commentary on both reported and “excluding Indue” organic performance.
Revenue and transaction trends across the business
Brice said net operating income (NOI) increased 10% in the half, including an AUD 5.3 million contribution from Indue in December. Excluding Indue, NOI grew 6%, which Brice attributed to solid transaction growth and incremental revenue from product innovation. She also noted December is typically a seasonally strong month for volumes, aided by higher retail spend, gift card activity, and interest income linked to higher client balances.
- Transaction volumes: Up 9% overall, including 20 million transactions from Indue in December; up 8% excluding Indue.
- Issuing: Revenue growth aligned with 7% volume growth; issuing volumes rose 9%.
- Acquiring: Transaction volumes rose 18%, supporting transaction-based revenue growth of 14% and a 10% increase in acquiring overall, helped by volume-based commercial incentives.
- Payments: Payments grew 15% and transaction-based revenue grew 14%, supported by “continued NPP momentum” and take-up of Confirmation of Payee.
In the Q&A, Kennedy said the payments segment growth reflected Cuscal’s role supporting a large portion of clients deploying innovation on the New Payments Platform (NPP). He also pointed to adoption efforts by specific clients that have promoted NPP payments to consumers.
Asked about volume growth relative to Reserve Bank of Australia datasets, Kennedy said Cuscal’s client portfolio includes a mix of customers performing at, below, and above system growth, and that several banking and acquiring clients delivered growth above system in the period.
Cost growth, investment priorities, and financial crime
Underlying operating expenses increased 10% year-over-year, or 6% excluding Indue, Brice said. She cited employee costs as the main driver, rising 20% due to the addition of Indue as well as ongoing investment in fraud and scam monitoring, cybersecurity, and risk management. Brice said other expenses declined 22% as internal capability grew, reducing reliance on third-party consultants.
Technology expenses increased in line with enterprise licensing and product investment, while depreciation and amortization fell 4%, helped by Cuscal’s premises move and “non-recurring R&D benefits,” Brice said.
Looking ahead, Brice said Cuscal would remain “disciplined” on spending, but cautioned there could be a “slight near-term drag” from Indue given its lower margin profile.
On questions about financial crime investment and whether higher staffing costs are being recovered through revenue, Kennedy said cybersecurity costs are largely internal and driven by industry-wide regulatory requirements. For the financial crime domain, he said the company aims for the business to be “self-funding,” balancing the need to provide a safe environment for clients to grow payments without pricing customers out of competitiveness.
Kennedy also addressed Cuscal’s previously discussed investment “envelope,” which he said remained around the level outlined at IPO time, with the mix varying by period. He noted that the Indue integration investment is separate from that envelope, and added that near-term work includes KYC/AML and other regulatory changes, but management was not seeing exceptional investment items like prior initiatives such as open banking.
Balance sheet, capital, and guidance update
Brice said Cuscal’s balance sheet remained strong, and the company retained a stable AA- credit rating from S&P. She reminded investors that, as a regulated ADI, Cuscal holds client deposits to eliminate settlement risk and must maintain appropriate capital levels. Following the Indue acquisition and deployment of excess capital, Cuscal’s capital adequacy ratio declined to 19.7% from 27.3%, sitting just above its 18%–19% target range. Return on equity for the half was 6.3%, in line with the prior year, she said.
In response to a question about period-end client deposit balances of AUD 4.1 billion, Kennedy said balances tend to be commensurate with transaction volumes and warned against extrapolating from December, which is typically the peak month for pre-settlement and security deposit holdings. He said there was no attrition in the client base and that deposit patterns have been consistent aside from seasonality.
For FY 2026, Kennedy said Cuscal lifted its outlook following the first-half performance and the completion of the Indue acquisition. Management now expects “high single-digit” transaction volume growth to translate to “mid-teens” underlying NPAT growth. Kennedy said first-half earnings should represent about 55% of full-year underlying NPAT, partly because net interest income was higher in the first half and because excess capital has now been deployed into the Indue acquisition.
On capital management, Kennedy said Cuscal continues to explore M&A opportunities but had nothing to disclose. He also said Cuscal does not expect to be directly impacted by interchange or surcharging changes, and does not expect those to be material in the second half.
Discussing dividends, Kennedy said the interim payout at the lower end of the company’s stated payout range reflected a conservative approach consistent with the board’s historical practice of being cautious at the half-year and “making it up” at the full year.
About Coca-Cola Amatil (ASX:CCL)
Coca-Cola Amatil Limited produces and distributes non-alcoholic and alcoholic ready-to-drink beverages in Australia, New Zealand, Indonesia, Papua New Guinea, Fiji, and Samoa. The company offers various non-alcoholic beverages, such as energy drinks, juices, bottled water, coffee and tea, flavored milk, and other drinks. It also offers alcoholic beverages, including beer, cider, whisky, rum, and vodka. The company was founded in 1904 and is headquartered in North Sydney, Australia. Coca-Cola Amatil Limited is a subsidiary of Coca-Cola European Partners plc.
