19 results: What reporting season is saying about rates, wages and the consumer

Execution was mostly strong: guidance was raised or beaten at Avita (AVH), Vista Group (VGL), Block (XYZ) and others, and two REITs met guidance exactly. 

Yet the season's information sits in the cost lines rather than the top line. Employee costs across the comparable cohort grew 0.3-2.2% against revenue growth of 4-12%, with AI adoption widely claimed. 

On the finance side, there's a line split in the coverage into two halves, with one half still absorbing higher interest, and the other half now earning from it. 

And the consumer data describes two different households: one shopping at record levels in convenience formats, the other funding consumption on credit at the fastest rate since before COVID.

The finance line: repricing, not a crunch

• Charter Hall Retail's (CQR) finance costs have risen 60% over two years, from A$66.6m to A$106.9m, and now absorb 38% of net property income against 27% two years ago. 
• Contact Energy (CEN)'s net interest rose roughly 40% after absorbing Manawa's debt. 
• Light & Wonder's (LNW) US$700m swap fixed at 2.83% expires in April 2027; reverting to floating would add an estimated US$15-20m of annual interest. 
• Dexus Convenience Retail's (DXC) hedge book steps up mechanically from 3.33% in FY27 to 4.57% by FY29, which in our assessment places its earnings trough in FY28.

Access to credit is not really a problem at this stage, as every refinancing this season completed, several on improved terms - i.e. Charter Hall Retail (CQR) cut its margin 40bps to 125bps. This repricing has been orderly; but it is also, based on the hedge expiry schedules observed, not quite done yet.

The picture of employment, labour costs, and AI

The elephant in the room in this regard is what AI contributions are to this restraint.

Kinatico (KYP) is the only company in the cohort to attach a dollar figure to it: annualised savings of approximately A$300,000 from an AI agent named Vera, achieved within roughly 30 days of deployment, against a A$10.7m employee cost base. Management's framing was direct: "we are not a business at risk of being disrupted by AI; we are one of the businesses doing the disrupting." Elsewhere, adoption was disclosed without measurement. Vista Group (VGL) reported that more than 70% of its engineers are agent-assisted daily, with no associated cost or productivity figure. Credit Corp (CCP) described AI applications live across call summarisation, quality assurance and dialling, alongside a 20% improvement in digital collections outcomes, without isolating the AI contribution; we assess the current applications as worth low single-digit millions annually.

No company disclosed a wage inflation rate, cited an enterprise agreement, or referenced an award decision, with limited disclosure around headcounts. 

We would also caution against extrapolating the flat prints: Nick Scali (NCK) flagged ongoing award-driven cost pressure, Pinnacle's (PNI) parent employee expenses rose 73% on acquisition and incentive charges, and forward plans across the cohort generally assume employee cost growth resuming at mid-to-high single digits.

Two consumers

Credit Corp (CCP) reported market-wide interest-bearing credit card balances up 8%, which management identified as the fastest rate since pre-COVID, while its own lending book grew 10% to A$510m and settlements rose 15% to A$424m. Arrears were described as "within pro-forma levels", with no numeric rate disclosed. Block (XYZ) reported the same pattern at higher frequency in the United States: Cash App Borrow originations up 59%, transaction and loan losses up 134% to US$1.086bn across the half on a lending book up 49% to US$6.9bn, with loss rates described as stable.

Guidance and positioning into 2027

Avita (AVH) raised FY26 revenue guidance to US$86-89m, Vista Group (VGL) raised for the second time in 12 months to NZ$179-184m, Block (XYZ) guided FY26 gross profit to US$12.51bn after six consecutive beats, and Light & Wonder (LNW) guided to mid-to-high single-digit Adjusted EBITDA growth. 

The exception is instructive: Credit Corp (CCP), the most conservative guider in the cohort, guided FY27 NPAT growth of 4-12% against the 12% just delivered, with purchased debt investment and the lending book both guided lower.

Fair values sit below prevailing prices on 12 of the 19 names, with three Buys, and roughly half the theses swing materially on the rate cycle. That skew reflects valuation rather than deteriorating fundamentals: in our assessment, markets have largely capitalised a rate-cutting cycle that central banks have not yet delivered. 

The tension is that the same labour market strength visible in these results is what delays the cuts; rate relief and continued consumer resilience are unlikely to arrive together.

In summary