Strong financial performance

What we measure: The closing amounts receivable from customers translated at constant exchange rates.

Why it’s important: This enables changes in customer receivables to be compared on a consistent basis, which is important because it is a key driver of revenue growth.

How we performed: Closing net receivables increased by 14% to exceed £1bn reflecting strong growth in customer lending. All three divisions delivered double-digit growth. With strong customer demand and our continued focus on disciplined growth, we expect receivables to continue to show similarly strong growth in 2026.

What we measure: Revenue divided by average gross receivables before impairment provision.

Why it’s important: It reflects revenue earned from receivables and customer charges, supporting fair pricing and delivery of target returns within our 56% to 58% range, which reflects our product structure and the regulatory landscape, including rate caps in most markets.

How we performed: Revenue yield decreased by 2.2ppts to 52.5%, reflecting lower central bank base rates. Excluding Poland, which has been adversely impacted by the reduction in rate caps implemented over recent years, the Group’s revenue yield of 56.0%, was in line with our target range of 56% to 58%. The change in mix towards higher-yielding products is expected to grow Group revenue yield towards our target range.

What we measure: Impairment as a percentage of average gross receivables before impairment provision.

Why it’s important: Profitability is maximised by optimising the balance between growth and credit quality. Impairment rate helps us assess the amount of principal we are unable to collect. Our target range is 14% to 16%.

How we performed: Strong customer repayment performance and robust credit quality, together with a strong debt sale market and £7m reduction in the cost of living provision, drove a 0.6ppt improvement in the impairment rate to 9.0%, despite accelerating growth and higher up-front IFRS 9 charges. Excluding Poland, the rate was 13.3%. As lending increases, we expect the rate to move gradually towards our 14%–16% target range over the next two years as we rescale Poland.

What we measure: The direct expenses of the business including customer representatives’ commission as a percentage of revenue.

Why it’s important: To ensure we run our business in the most efficient manner as this ratio is a key driver of profitability. Our medium-term target range is 49% to 51%.

How we performed: The cost-income ratio remained broadly flat at 61.1%, reflecting lower revenue yield and the current lack of scale in Poland following regulatory change over the past three years. Excluding Poland, the Group’s cost-income ratio was 56.2%, compared with 55.7% in 2024. We are committed to our target as we deliver growth, build scale and execute our cost-efficiency programme.

What we measure: RoRE is pre-exceptional profit after tax divided by average required equity of 40% of receivables. RoE is profit after tax divided by average equity.

Why it’s important: RoRE and RoE are good measures of overall shareholder returns. We target 15% to 20%, as this is a return which we consider to be sustainable and balances the needs of all our stakeholders.

How we performed: RoE is lower than RoRE due to the additional capital held above our target level of 40%. Consistent with our guidance, pre-exceptional RoRE moderated to 14.9% reflecting the investment and acceleration in growth. The Group’s RoE, based on actual equity, reduced to 10.7%. We expect returns to moderate in 2026 as we invest to build scale before reaching target returns again in 2027.