Humm Group (ASX:HUM) reported statutory profit after tax of AUD 13.9 million for the half-year ended 31 December 2025, as management highlighted continued progress in what it described as a multi-year transformation program. Chief Executive Officer Angelo Demasi said the result was achieved “despite external headwinds,” while noting that statutory figures were affected by irregular items, including adjustments to provisions tied to foreign finance litigation following a recent Federal Court judgment.
Group results and dividend
Demasi said annualized statutory earnings per share were 5.6 cents and annualized return on equity was 5.4%, with both impacted by the irregular items. The group’s reported cost-to-income ratio was 57.4%; management said that excluding irregular items it would be in the “52% range,” reflecting what it characterized as improving efficiency.
The company declared a fully franked interim dividend of AUD 0.015 per share. In the Q&A, management linked the increase to the repayment of perpetual notes in FY25, which removed an ongoing perpetual note dividend expense. Demasi said the group paid about AUD 7.7 million in perpetual note dividends in FY25, and that capacity “comes back to us” and allowed the board to increase the dividend by AUD 0.0075 in the period. He added the dividend remained within the payout ratio but toward the upper end, and said the board had initiated a capital management strategy review that would include the target dividend ratio for future periods.
Shift to statutory reporting and key one-offs
Interim CFO Tony Taylor said the company shifted external reporting to statutory accounting measures for profit metrics, moving away from cash-based metrics that he said could be difficult to compare due to differing definitions. Taylor said focusing on statutory profit after tax was intended to provide a clearer and more consistent view of performance relative to the company’s own history and peers.
Taylor and Demasi cited several items they described as irregular or “specific,” including changes to the foreign finance litigation provision, duplicate system costs related to running legacy systems alongside new implementations, legal costs tied to responding to an ASIC inquiry, and a release of an “onerous contract provision” following renegotiation and renewal of a key supplier agreement. Taylor also noted an AUD 800,000 negative impact from unfavorable New Zealand dollar foreign exchange movements during the half.
Management discussed comparability issues with the prior corresponding period (PCP), highlighting that PCP included an approximately AUD 7.9 million expected credit loss (ECL) provision release connected to the initial forward flow receivables sale. Taylor said first-half FY26 statutory profit after tax was up 13% on the second half of FY25 but down 49.1% on PCP, citing the absence of that prior-period ECL release, higher commercial credit losses tied to portfolio seasoning, and higher irregular items.
Credit performance, liquidity, and funding
Demasi said credit losses remained low, with annualized net loss to average net receivables (ANR) at 1.95% (presented as 2% in the materials). Taylor said the increase from 1.8% to 2% primarily reflected commercial portfolio seasoning. He added that flexicommercial net loss to ANR rose from 0.9% in PCP to 1.3% in the first half and was expected to “normalize and trend back towards 1.2%” for full-year FY26.
In consumer, Taylor said net loss to ANR rose by 30 basis points to 2.6% versus PCP, mainly due to the run-off of the humm Classic portfolio; management said underlying loss performance was stable when adjusting for the denominator effect. The company said its balance sheet provision coverage remained strong at 2.5%, about 50 basis points above actual losses.
On liquidity, management provided a breakdown of what it previously referred to as unrestricted cash of AUD 124.1 million at 31 December 2025. Demasi said the group operates to a minimum liquidity balance of AUD 70 million, reflecting liquidity covenant requirements and risk appetite settings. At the reporting date, drawn corporate debt was AUD 63.6 million, leaving liquidity net of corporate debt of AUD 6.4 million. Demasi added that at least AUD 30 million was required on an ongoing basis for working and settlement capital due to daily fluctuations, and that AUD 19 million of available cash had been allocated and reserved for payment related to the foreign finance litigation outcome.
Net tangible assets (NTA) increased to AUD 413.9 million from AUD 376.9 million in the second half of FY25, which Demasi attributed to capital management activities (including share buyback and repayment of perpetual notes), hedging mark-to-market movements, profit and dividends, and foreign exchange.
On funding, Taylor said the group remained well supported by banks and credit investors, using a mix of warehouse funding, private and public term transactions, a forward flow arrangement, and corporate debt facilities. He highlighted a NZD 247 million public issuance under the QCARD Master Trust program, which he said was executed at “very favorable prices.”
Regarding forward flow, Taylor said the original arrangement provided capacity of up to AUD 1 billion, with AUD 680 million utilized before the availability period expired in October 2025. In January 2026, the group executed a new forward flow program with AUD 500 million of capacity, with availability expiring in October. Taylor said the forward flow program delivered outcomes consistent with expectations and cited benefits including capacity to fund commercial growth without significant equity raising, fee income generation, funding diversification, and the ability to continue originating. He also said the company saw an opportunity to expand the program to other asset classes.
Segment performance: commercial and consumer
In flexicommercial, Taylor reported statutory profit after tax of AUD 13.4 million, down 11.8% on the second half of FY25 and down 52.8% on PCP. Management said performance was more comparable to the second half of FY25 than PCP due to forward flow timing and portfolio seasoning effects. Taylor said the commercial portfolio continued to grow assets under management and was operating in an SME market showing “early signs of recovery” amid rising competition, supported by underwriting standards and broker networks. He also said the business was expanding into rural and regional Australia and progressing new products including Flexi Premium and Flexi Ag.
In the consumer segment, Taylor said statutory profit after tax was AUD 14.3 million, up 76.5% on PCP and up 180.4% on the second half of FY25, driven by humm Island and Cards New Zealand. Consumer volumes were AUD 1.1 billion, down 13.1% on PCP, and closing loans and advances were AUD 2.0 billion, down 5.1% on PCP due to the reduction in the humm Australia portfolio and the weaker New Zealand dollar.
- Cards New Zealand: Taylor said the business delivered higher profit versus PCP and the prior half, supported by 11.8% volume growth in the core acquiring Mastercard portfolio. Management said market share rose to 8.45% in the quarter and the company remained the market leader in New Zealand card issuance, capturing 31% of newly issued cards. Net credit losses to ANR increased slightly to 3.6%.
- Cards Australia: Statutory profit after tax was AUD 3.1 million, down versus PCP and the prior half, driven by higher operating costs related to the ASIC inquiry. Management said tighter credit settings reduced net credit losses and brought net credit loss to ANR to 2.4% in the half. Volume increased 1% year-on-year as the company moderated new customer acquisition while focusing on existing customer spend.
- Point-of-sale payment plans: Statutory profit after tax was AUD 3.2 million, with management citing contributions from humm Australia and humm Island, partially offset by investment in the UK and Canada. Volumes were AUD 369 million, down 32.3% on PCP, reflecting the run-off of humm Classic and technology issues, partly offset by growth in humm Island and the UK.
Technology transformation and international momentum
Demasi said the group continued investing in product platforms and IT modernization. He said humm Loan was operational and that key credit and technology performance metrics had materially improved following launch challenges in June 2025. The company has begun implementation of a new cards product platform, which Demasi said commenced in the first half and, in the Q&A, he expected to take “the best part of 12 months,” followed by a subsequent customer migration process in Australia and New Zealand.
On infrastructure modernization, Demasi said the company had retired more than 1,170 servers—about 75% of its fleet—and was decommissioning physical data centers as it migrated to the cloud. He said cloud-hosted product systems were delivering 99.9% availability. In the Q&A, Demasi said the company had migrated out of two data centers and expected to be fully out of the last remaining data center by the end of August.
Internationally, Demasi said Ireland delivered a profit of AUD 6.9 million, up 103% on PCP, driven by strong volume growth and a 250 basis point improvement in gross interest yield. In the UK, he said volumes rose 56% and interest income increased 100% versus PCP, supported by a strategy of following Irish merchants into the UK. In Canada, management said an operating model reset was completed and delivered AUD 1.7 million of cost reductions versus PCP in the half, inclusive of restructuring costs. In the Q&A, Taylor said cost savings could be more pronounced in the second half, though additional restructuring costs could still be incurred.
Overall, management said global statutory profit after tax improved from an AUD 3.4 million loss in the first half of FY25 to an AUD 1.1 million profit in the second half of FY25 and to an AUD 2.1 million profit in the first half of FY26.
Looking ahead, Demasi said selected commercial losses had peaked and were expected to normalize through the second half, while the company would remain disciplined on costs as it continued targeted investment in end-to-end technology platforms. He said the new humm Loan product was expected to expand its merchant offering and support improved profitability over the medium term, and that management was optimistic about continued growth in global businesses.
About Humm Group (ASX:HUM)
Humm Group Limited provides various financial services in Australia, New Zealand, Ireland, the United Kingdom, and Canada. The company operates through four segments: Point of Sale Payment Plans (PosPP), New Zealand Cards, Australia Cards, and Commercial. It offers long term interest free finance and everyday spend solutions under the humm90 brand; Q Mastercard, an interest free credit card; FlexiCommercial, a business financing solution, which includes leasing and chattel mortgages for small and medium businesses; and leasing solutions and small and medium enterprise financing services.
