How Harmoney’s New Car Loan and Loan Growth Power $12M Profit Target

Strong Growth Momentum

Harmoney Corp Limited (ASX, HMY) has delivered a confident update for the first quarter of FY26, reaffirming its profit guidance of $12 million Cash NPAT. This target represents a remarkable 111% increase over the previous financial year, underscoring the company’s accelerating growth trajectory. The company’s loan book expanded by 8% year-on-year to $833 million, supported by robust loan originations in both Australia and New Zealand.

In Australia, loan originations rose 15%, while New Zealand saw an even more impressive increase of over 50%, aided by the full rollout of Harmoney’s proprietary Stellare 2.0 platform in June 2025. This platform upgrade has been pivotal in enhancing the company’s lending capabilities and operational efficiency.

Margin Expansion and Credit Stability

Harmoney’s net interest margin (NIM) improved significantly to 10.3% from 8.9% a year earlier, reflecting the company’s ability to lend at higher margins while managing funding costs and credit losses effectively. The risk-adjusted income, which accounts for credit losses, increased by 130 basis points to 6.5%, signaling improved profitability on a risk-adjusted basis.

Credit losses remained stable at 3.8%, with a slight uptick in 90+ day arrears to 0.77%, still well below the Australian market average. The company expects credit losses in New Zealand to stabilize as Stellare 2.0’s predictive analytics continue to enhance credit decisioning.

Innovation with Secured Vehicle Loans

One of the standout developments this quarter is the launch of a secured vehicle loan product, enabled by the Stellare 2.0 platform’s “money in seconds” technology. This new offering allows customers to become cash buyers with pre-approved secured credit lines, bypassing traditional dealer finance options. Early customer interest appears strong, and Harmoney plans to expand marketing efforts to educate consumers on the benefits of this innovative product.

Operational Efficiency and Capital Strength

Harmoney continues to impress with its cost discipline, maintaining a cost to income ratio of 19%, consistent with FY25. This efficiency is largely attributed to the automation capabilities of Stellare 2.0. The company holds $35 million in available cash reserves and has access to approximately $1 billion in warehouse credit capacity, providing ample funding headroom for future growth.

Looking ahead, Harmoney plans to refinance its $22.5 million corporate debt facility in December 2025, reducing the drawn balance by $7.5 million on improved terms. This move will further strengthen the company’s balance sheet and reduce financing costs.

Investor Confidence

Investor sentiment appears positive, with new active investment funds joining the register during the quarter, replacing pre-IPO investors. Post-IPO investors now constitute over 50% of the shareholder base, reflecting growing market confidence in Harmoney’s strategy and execution.