SOLVAR LIMITED (SVR)
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22/11/2024

1

Buy

$1.48

18.40%

The AGM trading update from Solvar provided a positive outlook for the start of FY25, Bell Potter observes, with growth in Australia.

Management's guidance for the FY25 loan book stands at $850m, reflecting growth of 8%, with net profit of $34m versus $29m in FY24, exceeding the consensus estimate of $31.5m.

The broker highlights 1Q25 net profit rose 18.7% on 4Q24, with the Australian loan book increasing 8.5% on the previous corresponding period. The run-off in the NZ loan book continued.

Bell Potter lowers net profit estimates by -3.4% and -11.9% for FY25/FY26 due to changes in net interest.

Target price lifts to $1.48 from $1.30, arising from better NZ loan book growth expectations. Buy rating unchanged.

FORECAST
Bell Potter forecasts a full year FY25 dividend of 11.30 cents and EPS of 16.00 cents.
Bell Potter forecasts a full year FY26 dividend of 12.90 cents and EPS of 16.00 cents.

06/08/2024

1

Buy

$1.50

20.00%

Solvar announced it has resolved to exit the New Zealand market and refocus its strategy on the Australian consumer lending and commercial markets, where it believes it can achieve higher returns on capital.

Canaccord Genuity agrees there is scope to redeploy capital into the Australian commercial lending market in particular but perceives management taking a measured approach to growing both the consumer and commercial books while also being front-footed on capital management initiatives.

Management has slightly lifted the FY24 guidance range and the company expects to declare a 5cps final dividend, in line with the broker.

Target falls to $1.50 from $1.55, Buy retained.

FORECAST
Canaccord Genuity forecasts a full year FY25 dividend of 11.00 cents and EPS of 15.00 cents.