Diversified financial services company, FlexiGroup Limited (ASX: FXL) has announced its first half year results for FY 2019. For the half-year period, the company has reported Cash Net Profit After Tax (NPAT) of $31.9 million and, after adjusting for an impairment related to a vendor programme in FlexiGroup’s Australian Commercial Leasing division, underlying NPAT for 1H19 is $41.9 million. Cash NPAT of $31.9 million is 22% lower than the previous corresponding period (pcp).
The net receivables increased by 13% to $2,547 million in 1H FY19 as compared to pcp. The company reported Cash EPS of 8.2c in 1H FY19, representing a decrease of 25% on pcp.
During the first half of FY 2019, the company attracted 272k new customers to its products, resulting in an active customer base of 1.24 million. In the half-year period, the company added 5,000 new retail partners to its network which increased the company’s valued partnerships with retailers across Australia and New Zealand to 62,000. The transaction volume increased by 19% to $1.31 billion in 1H FY19 as compared to pcp.
The company has declared an interim dividend of 3.85 cents per share, fully franked with a payment date of 12 April 2019 and register date of 7 March 2019.
The company has undertaken a comprehensive strategic review of its business over the past five months wherein the Management has identified a $5.8 billion Trans-Tasman market opportunity in FlexiGroup’s core product range.
The company has identified a $435 million ‘Buy Now Pay Later’ market in Australia which currently represents 25% of FlexiGroup’s 1H19 Net Income. The company has also identified a $3.7 billion Credit Cards market in Australia which currently represents 45% of FlexiGroup’s 1H19 Net Income. The company has identified a $1.3 billion Consumer and SME Equipment Leasing market in Australia which currently represents 12% of FlexiGroup’s 1H19 Net Income.
According to FlexiGroup CEO Rebecca James, “there is an extraordinary opportunity to grow with the market in these core products i.e., Buy Now Pay Later, Credit Cards, Consumer and SME Equipment Leasing”. She further informed that Consumer spending, saving and financing preferences are changing, and the management of the company believes that FlexiGroup can win more of the market by being customer led.
Today the company also announced its transformation plan. The first step in the transformation is to simplify the company’s offering and get fit to fight. The company’s objective is to improve service while reducing the cost to serve by around 40% over three years.
The second step in the transformation is to lead in Buy Now Pay Later. The third step is to streamline originations with instant credit decisions. And, the fourth step is to expand the company’s reach, its target market, its audience and its relevance.
Meanwhile, in the last six months, the share price of the company decreased by 45.23% as on 25 February 2019. FXL’s shares traded at $1.270 (+5.394% intraday) with a market capitalization of circa $451 million as on 26 February 2019 (AEST 1:29 PM).
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