Australian lending business FlexiGroup Ltd (ASX:FXL) released its half-year financial report to investors today showing a rise in client numbers, especially its Humm product line.
FlexiGroup offers a range of financing options for consumers and businesses through a network of retail and business partners. It also offers a Buy Now, Pay Later (BNPL) option called Humm, and other types of financing.
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Flexigroup’s Key Results
In its 2020 half-year financial report FlexiGroup revealed it had a total of 1.87 million customers, up 12% over the prior corresponding period. That helped the company increase the total transaction volume going through its platform by 28% to $1.3 billion. On the other side of the ledger, Flexigroup has now partnered with 69,000 retail partners, such as stores and smaller businesses.
Unfortunately, the positive movement in user numbers didn’t translate to revenue growth during the period, with the company’s total income falling 4%. That said, at the bottom line (profit) there was a modest 6% increase in profit to $33.3 million. Flexigroup declared a 3.85 cents per share fully franked dividend.
“The transformation strategy put in place 12 months ago is delivering, demonstrated by the key indicators over the last six months,” Flexigroup CEO Rebecca James said.
“Profit growth, strong double digit volume growth across all current product propositions, and a significant reduction in losses in proportion to volume.”
The company’s key BNPL product is Humm, a payments tool designed for the purpose of allowing consumers to use their phone or device to spend up to $30,000 interest-free. In this regard, it’s similar to the propositions offered by Afterpay Ltd (ASX: APT) and Splitit Ltd (ASX: SPT), although there are meaningful nuances.
“We’ve seen strong growth in key verticals where our ability to service any transaction up to $30,000 interest free is standing out as a key differentiator,” James added. “That has driven a 32% increase in the number of humm customers over the last 12 months.”
Looking toward the future the company expects transaction volume to grow between 15% and 20% for the full year driven in part by new product launches. However, the company reiterated it is just part-way through its, “three year comprehensive business transformation plan.”
FlexiGroup shares were last seen trading at $1.84, giving the company a market capitalisation more than $500 million.
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