Cuscal share market float bombs as P&N Bank cashes in part of its stake

The biggest stock market float of the year, payments platform Cuscal, has posted a disappointing debut, immediately losing more than $36 million of value. Shares in the Sydney-based company only briefly traded above their issue price of $2.50 on Monday before nosediving to close at just $2.31, revaluing the group at $442.5 million. The poor debut is another blow to Australia’s languishing initial public offer market as company promoters struggle to find float candidates capable of whetting the appetite of investors. Cuscal is the only company outside of the big banks with the infrastructure able to process card payments and ATM cash withdrawals. Set up nearly 60 years ago to support the country’s building and credit societies, it raised $336.8 million from new investors in a little-promoted float led by BofA Securities. With the exception of $40m in new capital, the raising was sourced from a sell-down by Cuscal’s shareholders, principally Mastercard and the mutual banks and credit unions who use its payments system. They include Great Southern Bank, Beyond Bank, Police Bank, Australian Mutual Bank and WA’s P&N Bank, a shareholder since its days as Police & Nurses Credit Society. Like the other mutuals, P&N sold half of its holding into the float, retaining 2.7 million shares worth $6.2 million at Monday’s close. A spokesman for chief executive Andrew Hadley said P&N had yet to decide whether it would keep the remaining shares when escrow conditions are lifted on the release of Cuscal’s 2025 financial results. Cuscal generated $244.9m in net fees and commissions from its more than 90 customers in the 2024 financial year, supporting an annual net profit of $31.1m. It has forecast earnings of $36.6m for the current year on revenue of $259.4m. The company traces its roots to the foundation in 1966 of the Australian Federation of Credit Union Leagues, which became the Credit Union Services Corporation in 1977 after a series of mergers.