The FlexiGroup Limited
(ASX: FXL) share price jumped 12% today after reporting its FY19 result.
FlexiGroup offers a range of finaning options for consumers and businesses through a network of retail and business partners. It has buy now, pay later options called Humm, credit cards and consumer & business leasing. It’s been operating in Australia for more than three decades and serves 1.2 million customers.
FlexiGroup’s 2019 Financial Result
The financial business reported that its revenue rose by 3% to $472.7 million.
FlexiGroup’s active customer rose by 8% to 1.76 million, its retail partners rose 8% to 65,000 and its transaction volume rose by 12% to $2.56 billion.
The company’s underlying cash net profit fell by 12% to $76.1 million, which excludes a number of adjustments, one-offs and amortisation of acquired intangibles. This profit delivered was in line with its revised guidance.
Statutory
profit improved to $61.7 million, from a statutory loss from $9.1 million in the previous year.
FlexiGroup also announced a number of new products. Bundll, Wiired lease and Wiired Money. It also revealed a new card brand called Cartt, consolidating five card brands into one consumer facing offering.
Bundll is being launched with MasterCard, which will allow customers to buy “everything, everywhere and pay later.” And of course, it’s targeting millennials. This is a clear challenge to Afterpay Touch Group Ltd (ASX: APT).
Wiired lease is Australasia’s first digital integrated leasing platform with a focus on transactions under $100,000. It delivers lease quotes in real time.
Wiired money is a digital wallet that will allow interest free instalment payments of up to $30,000 for small businesses.
The buy now, pay later option called Humm had a solid year with Australian volumes up 6% to $574 million. In the year to date total transactions are up 19%, with volume in ‘little things’ up 36% and ‘big things’ up 12%.
Around 63,000 new Australian customers have joined in the four months since relaunch and added 5,000 sellers to the platform, up 42% on the prior comparable period.
In New Zealand volumes were up 383%, it now has 114,000 BNPL customers (up 138%) and 1,800 sellers, up 201%.
FlexiGroup Dividend
The FlexiGroup Directors declared a fully franked final dividend of 3.85 cents per share, bringing the total year dividend to 7.7 cents per share, the same as last year.
Is FlexiGroup A Buy?
It’s only in year one of a three year plan but it’s doing well it seems at revitalising the offerings and introducing new ones.
In FY20 it’s aiming for volume growth of at least 15% due to the new product launches, wider audience and new partnerships.
It certainly seems FlexiGroup could be one to watch over the next few years, but it’s not in the industry that I’d want to buy for my own portfolio. I’d rather think about the long term winners in the free report below instead.
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