Ahmed Fahour to leave Latitude Financial by August 2023

Latitude says it will find a replacement for chief executive Ahmed Fahour within a year. Separately, it posted a slide in profits for the six months to June 30.

Latitude Financial Services chief executive Ahmed Fahour is leaving the company. Picture: NCA NewsWire / Ian Currie

Having shepherded Latitude Financial Services onto the ASX and through a pandemic Ahmed Fahour has called time and says he will step down from the company he has run since late 2018.

Mr Fahour, the former managing director of Australia Post, will leave the job by August 2023, and says he plans to spend more time focusing on a growing portfolio of private investments.

“It’s definitely a retirement from Latitude, I have no job I’m going to, ” Mr Fahour said. “I don’t know what retirement means in the modern world but I don’t think it means I’m going to pick up my golf clubs.”

Latitude’s said cash NPAT, its preferred measure of profitability, fell 11 per cent to $93m for the half year to June 30 compared to the first half of the 2021 year.

Volumes rose to $3.7bn, a 2 per cent rise, while indeptedness and delinquency rates were higher.

Statutory net profit hit $30.6m – a 66 per cent slide compared to the same period in the 2021 financial year. The company said it expected delinquencies to remain under historical levels given the low rate of unemployment.

Gross receivables were down 1 per cent, sitting at $6.3bn, as customers attempted to get ahead of the repayments. However, the company said the recent rise in the cash rate would erode savings contributing to an improvement in receivables growth.

Latitude will launch a search to find a replacement for Mr Fahour.

Mr Fahour said he was keen to lean into his passion for private investment as well as his support for Muslim Australians to grow their career opportunities.

“I think there’s some really big opportunities to assist the economy and the country,” he said.

Mr Fahour has previously revealed his stake in Hairhouse, a hair and beauty retailer, while his wife Hannah Fahour has taken a stake in women and baby goods retailer The Memo.

“I love private businesses and being involved and supporting entrepreneurs for a better world,” Mr Fahour told The Weekend Australian on Friday..

Mr Fahour’s departure comes after a turbulent period for Latitude, with a much hyped $250m acquisition of Humm’s consumer lending arm collapsing in June, as well as a push to transition the lender’s loans to a new platform.

Mr Fahour said it was a “difficult decision” but now was “the right time to prepare for my departure next year and support the board as it plans for my succession as chief executive”.

“Getting Latitude ready for life as a public company and then realising that goal during a global pandemic with last year’s IPO is something that I am particularly proud of,” he said.

“While I remain focused on leading Latitude until I depart next year, I am looking forward to preparing for the next phase of my career and exploring the chance to increase my contribution to the community.”

Latitude declared a 7.85c fully franked dividend, unchanged from 2021. The company has extended its ex-dividend period in the hopes shareholders will take up its reinvestment plan as it seeks to increase liquidity. Much of this is due to Latitude’s initial float, which saw KKR, Varde Partners and Deutsche Bank retain 66.4 per cent of Latitude,

Only $860m worth of shares in the lender hit the ASX in the IPO which valued the lender at $2.8bn.

Latitude’s failed deal with Humm would have seen 150 million more shares hit boards, alongside $35m cash.

Latitude shares fell 1.6 per cent on Friday, ending the day 2.5c lower at $1.56. They have fallen 21 per since December 31.

But Mr Fahour will retain exposure the company’s fortunes after purchasing an extension to his 15 million call options in Latitude for 18 months from March 2023 until September 2024.

The move was attributed to Mr Farhour’s initial options rights being impacted by the Covid-19 period, which trimmed any gains the company could make. Mr Farhour, who earned $1.68m in the 2021 financial year, is sitting on almost 2.69 million in shares which are set to exit escrow in November –as well as a potential $2.25m short term incentive.

Latitude chairman Mike Tilley said: “Ahmed has worked incredibly hard to transition the business to take advantage of the post-Covid recovery in demand for consumer finance, while maintaining great discipline in risk, productivity and margins.”