Shares in finance company Flexigroup (FXL) jumped 14% yesterday after the company reporting a solid 9% rise in interim earnings, thanks in part to the strong New Zealand economy.
Flexigroup shares have been weak for the past 15 months, dropping 37% from November 2013. But the half year result showed all the company’s divisions back in profit for the first time in more than two years.
Interim cash profit rose 9% to $42.5 million, while statutory profits were also up 11% to $38.5 million and CEO Tarek Robbiati confirmed the company was on track to meet full year 2015 guidance of between $90 and $91 million.
Flexigroup will pay a fully franked interim dividend of 8.75c a share, up 9% on the previous half.
As a result the shares jumped more than 14% to close at $3.49.
FXL 1Y – Flexigroup profit, share price jumps
The company saw a 9% rise in business“volumes” to $587 million and a 10% jump in “receivables” to $1.35 billion.
“Looking at the divisions it is worth highlighting the turnaround in the consumer and SME leasing segment which has shown positive cash NPAT growth for the first time since financial year 2011,” Mr Robbiati said in a statement to the ASX yesterday.
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The company saw the biggest profit rises in its NZ division, which were up 23% to $3.2 million; its biggest earner, the mostly solar panel leasing business Certergy, saw a 10% rise to $16.6 million. Earnings from its new ‘no interest’ retail credit cards (marketed by major retailers) were also 10% higher at $5.6 million.
Its consumer division includes its traditional electronic goods leasing business which is offered via big retailers like Harvey Norman and Dick Smith. This has suffered from lower growth from the switch to cheaper mobile devices away from more expensive desktops and laptops.
