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Summary
- ASX 300 Company, FlexiGroup has recently completed Institutional Entitlement Offer worth ~AU$79 million and is all set to finalise Share Purchase Plan on 2 September 2020. The proceeds would be utilised to boost the Company’s balance sheet flexibility and assist the sustainable, as well as profitable growth outlook of its brand.
- Owing to COVID-19 pandemic, FlexiGroup posted mixed results for FY20 ended 30 June 2020, with statutory NPAT tumbling down by 65%.
- The Company is geared up to engross itself into buy now pay later and diversify its offering with humm90 and bundll (powered by humm). Further, the actions taken over the year have put FXL in the robust position to capitalise on AU$450 billion retail opportunity across, Ireland, New Zealand, and Australia.
While numerous individuals, firms, nations and businesses are still struggling with the turbulent waves of the COVID-19 pandemic, one of the sectors that had garnered attention and have emerged stronger from the unparalleled crisis is the e-payment space.
Digital financial services space has been experiencing expansion as numerous individuals across the globe have been leveraging the e-payments ecosystem to purchase stuff online amid restrictions on social movements.
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One of the financial services company, FlexiGroup Limited (ASX:FXL) benefits from a diverse business model with a product suite that spans BNPL, revolving credit and SME finance, which is a significant strength in a challenging economic environment.
The shares of ASX 300 listed FlexiGroup last traded at AU$1.235, indicating a fall of 5.364% from the previous close, on 28 August 2020.
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Let us quickly skim through the ASX 300 listed Company and its latest news.
Position boosted with the capital raising
Owing to accelerated shift towards online shopping amid the COVID-19 pandemic, FlexiGroup has benefitted massively. With an aim to provide balance sheet flexibility and further aid the sustainable, as well as profitable growth outlook of its brand, including its BNPL h service umm, FlexiGroup resorted to capital raising.
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The Company announced an equity raising through a 1 for 3.20 entitlement offer with a total offer size of ~AU$140 million.
On 28 August 2020, FXL’s financial position was bolstered by the successful raising of AU$79 million via fully underwritten Institutional Entitlement Offer at an issue price of AU$1.14 per New Share.
The raised capital would further administer funding certainty for the projected AU$115 million of the capital required to aid the Company’s growth outlook, while diminishing shareholder dilution.
To read about FlexiGroup’s trading update, click here
Notably, the subscribed New Shares under are anticipated to be finalised on 2 September 2020 and begin trading on ASX on 3, 2020.
Furthermore, FXL’s shareholders would soon be able to participate in a Retail Entitlement Offer on 2 September 2020 to subscribe for 1 share for every 3.20 existing ordinary shares held in FXL at the offer price of AU$1.14 per New Share.
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Request of a trading halt
On 26 August 2020, the Company had requested for its securities to be placed under trading halt pending the release of an announcement concerning the outcome of the institutional component of the entitlement offer.
The Company began normal trading of its securities on 28 August 2020.
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Financial performance
On 26 August 2020, FXL unveiled mixed results for the twelve months ending 30 June 2020, which included a massive drop of 65% in its Statutory NPAT to AU$21.4 million in comparison with AU$61.7 million in FY19 due to COVID-19.
Other key highlights for the last twelve months to 30 June include the following:
- The Company achieved a Cash NPAT of AU$29.2 million, demonstrating COVID-19 pandemic macro overlay provision.
- FlexiGroup witnessed an upsurge of 30% (y-o-y) in active customers and stood at 2.3 million.
- Furthermore, FXL’s retail and commercial partners experienced a boosted y-o-y growth of 13% to stand at 73,000.
- The Company noted a substantial increment of 17% (y-o-y) in the transaction volume and was recorded at AU$2.5 billion.
- FXL noted total receivables of AU$2.5 billion, as of 30 June 2020.
Source: Company’s Presentation, dated 26 August 2020
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Dividend
Furthermore, owing to the current economic challenges and equity raising by FXL, the Company did not announce any dividend and advised that deferred 1H FY20 dividend would be paid in October 2020.
Stay tuned for FXL’s dividend update in the announcement of 1H FY21 results.
With the near completion of the simplification of FlexiGroup’s and a common credit decision platform in place across its core consumer product portfolio, the Company is geared up to engross itself into a bigger ticket buy now pay later and diversify its offering with humm90 and bundll (powered by humm).
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Source: Company’s Presentation, dated 26 August 2020
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