COG Reports 1% NPATA Decline but Novated Leasing EBITDA Surges 26%
COG Financial Services reported a slight dip in net profit after tax but saw strong growth in its Novated Leasing segment, alongside strategic acquisitions and a steady dividend.
- FY25 NPATA to shareholders down 1% to $24.0 million
- Novated Leasing EBITDA up 26%, driving segment growth
- Revenue increased marginally by 1% to $363.5 million
- Declared fully franked final dividend of 3.0 cents per share
- Acquisitions include 5% stake in QPF Holdings and 70% of AAA Finance
Steady Financial Performance Amid Market Challenges
COG Financial Services Limited (ASX – COG) has released its audited results for the financial year ended 30 June 2025, revealing a nuanced picture of steady revenue growth tempered by a slight decline in net profit after tax attributable to shareholders. The company reported a 1% increase in revenue to $363.5 million, while NPATA edged down 1% to $24.0 million. However, when excluding the run-off impact of its TL Commercial lease business, underlying NPATA actually rose 4%, underscoring resilience in core operations.
Novated Leasing – The Growth Engine
The standout performer was the Novated Leasing segment, which delivered a robust 26% increase in EBITDA to shareholders. This segment, operating through Fleet Network and subsidiaries Paywise and beCarWise, continues to benefit from organic growth and favourable government incentives promoting electric vehicle uptake. CEO Andrew Bennett highlighted this momentum as a key affirmation of COG’s business model, especially through varying economic cycles.
Strategic Moves and Divestments
COG also made strategic portfolio adjustments during FY25, divesting its 19.89% stake in Alliance Limited to sharpen focus on core segments. The company expanded its footprint by acquiring an additional 5% equity interest in QPF Holdings Pty Ltd and securing a controlling 70% interest in AAA Finance and Insurance (Australia) Pty Ltd. These acquisitions align with COG’s strategy to bolster its finance broking and lending capabilities, positioning the group for future growth.
Dividend and Future Outlook
Investors were rewarded with a fully franked final dividend of 3.0 cents per share, reflecting management’s confidence in the company’s cash flow and earnings stability. Looking ahead to FY26, COG plans to maintain dividend payouts at similar levels while shifting its performance focus from NPATA to EBITDA metrics. The company also signalled increased attention on its Insurance Broking segment and remains active in pursuing strategic acquisitions at attractive valuations.
Navigating Opportunities and Challenges
With a relatively small market share across its three complementary businesses; Finance Broking & Aggregation, Novated Leasing, and Asset Management & Lending; COG sees significant room for growth through both organic expansion and consolidation. The ongoing government incentives for electric vehicles and the company’s strategic acquisitions could be catalysts for enhanced profitability. However, the transition in performance metrics and the impact of acquisitions on future earnings will be closely watched by investors and analysts alike.
Bottom Line?
COG’s FY25 results set the stage for a strategic pivot focused on EBITDA growth and targeted acquisitions, with the Novated Leasing segment leading the charge.
Questions in the middle?
- How will the shift from NPATA to EBITDA reporting affect investor perception and valuation?
- What impact will the AAA Finance acquisition have on COG’s lending portfolio and earnings?
- Can government incentives sustain the strong growth trajectory in Novated Leasing?
