Why did this ASX 300 share just crash 40%?

This automotive lender is being sold off on Thursday.

| More on:
A man holds his head in his hands, despairing at the bad result he's reading on his computer.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Solvar Ltd (ASX: SVR) share price is having a day to forget on Thursday.

In morning trade, the ASX 300 share is down a very disappointing 40% to $1.04.

Why is this ASX 300 share crashing?

Investors have been selling this automotive-focused loans company's shares following the release of a trading update.

For the 12 months ended 30 June, the company formerly known as Money3 expects to report:

  • Revenue up 11.4% to $209.3 million
  • Earnings before interest, tax, depreciation, and amortisation (EBITDA) up 11.9% to $110.8 million
  • Net profit after tax down 7.8% to $47.6 million
  • Fully franked final dividend of 9 cents per share

The ASX 300 share's CEO and managing director, Scott Baldwin, said:

I am pleased to report that, subject to audit, our FY23 results are in line with guidance. The Australian operations continue to perform well, with pleasing loan book growth of 31%. A total dividend for FY23 of 16.5 cents per share, fully franked, would equate to a payout ratio of 86% of the second half earnings.

So why the selling?

Investors have been selling down this ASX 300 share due to its FY 2024 guidance rather than its results.

Unfortunately, management is expecting rising interest rates and the tough macroeconomic environment to weigh on its loan book growth and profits over the next 12 months.

In respect to the latter, the company is expecting its FY 2024 net profit after tax to be in the range of $24 million to $30 million. This will be a 37% to 50% decline year on year. Management explained:

FY24 NPAT will be impacted by the full year cost of central banks rate rise cycle. Increases in funding costs are being passed through on new loans written, however it reduces the profit contribution from the back book.

Should you invest $1,000 in Estia Health right now?

Before you buy Estia Health shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Estia Health wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Financial Shares

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Financial Shares

Want a financial stock outside the big 4 banks? Macquarie tips 15% upside for this small cap financial

For those searching on the edges, this name could be worth a second look according to Macquarie.

Read more »

A man looking at his laptop and thinking.
Financial Shares

Are IAG shares a buy, hold, or sell following the RAC WA deal?

How does Goldman Sachs rate IAG shares after the $1.35B deal with The Royal Automobile Club?

Read more »

A female financial services professional with a manicured black afro hairstyle turns an ipad screen to show a client across the table a set of ASX shares figures in graph format.
Broker Notes

8 alternative ASX financial shares to buy instead of bank stocks: broker

Top broker Macquarie has put an outperform rating on scores of non-bank ASX financial shares.

Read more »

Ecstatic woman looking at her phone outside with her fist pumped.
Financial Shares

IAG share price charges higher on $1.35b deal and guidance update

This blue chip has made a big announcement. Here's what you need to know.

Read more »

A woman holds up hands to compare two things with question marks above her hands.
Financial Shares

Which is better value right now, Soul Patts or Brickworks shares?

Let's dive in and see what the experts have to say.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Financial Shares

How much upside does Macquarie tip for Pinnacle Investment Management shares?

Pinnacle could be a contender to continue rising, according to experts.

Read more »

Delighted adult man, working on a company slogan, on his laptop.
Financial Shares

Macquarie tips 28% upside for this ASX financial stock

This stock has a lot of potential.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Earnings Results

Why is the QBE share price racing ahead of the benchmark on Friday?

Investors are bidding up QBE shares today. But why?

Read more »