FlexiGroup lists cash net profit 8pc

Shares in financial services provider FlexiGroup have climbed 6pc after it posted cash earnings in line with forecasts.

FlexiGroup’s Symon Brewis-Weston, with his wife, TV newsreader Sandra Sully.

Financial services provider FlexiGroup’s shares have surged 6 per cent as investors digested a full year report that revealed cash earnings in line with its forecasts.

In the 12 months to June 30, its cash net profit rose 8 per cent to $97 million, in line with the revised guidance provided in May.

However, the group’s statutory earnings slumped 39 per cent to $50.2m owing to previously declared impairments, with the number falling just shy of projections for a $54.2m reading.

FlexiGroup (FXL) also reported a 19 per cent lift in new business volume to $1.35 billion and 22 per cent growth in cash flow from operations to $147.4m.

Chief executive Symon Brewis-Weston expressed confidence around the outlook as the ASX-listed company looks to revitalise its sales culture.

“Over the last six months we have added new merchant partners to our 20,000-strong store network, our sales and marketing culture has been reinvigorated and we have a rapidly growing new business pipeline in place, particularly across our commercial and cards businesses,” he said.

“Momentum is building in the cards business, which now makes up 45 per cent of group receivables, and our expanded contract with Flight Centre is one example of the deals we are able to chase and win in this segment.”

FlexiGroup said its cash net profit would likely fall marginally in FY2017 as the company looks to ramp up investments in long-term growth, which is predicted to see a return to double-digit earnings growth from FY2018.

The long-term guidance encouraged investors, which pushed Flexigroup shares up 5.7 per cent to $2.40 at 11.35am (AEST).

“These investments, in line with strategy and focused on delivering improved returns on invested capital, include growing Ireland, commercial leasing and Oxipay,” Mr Brewis-Weston said.

“While still at a very early stage, we have identified opportunities to expand in Ireland and will be investing in this business to capture the significant market opportunity which we believe exists there.”

The group said M & A would be considered, but was not a key focus in the near-term.

FlexiGroup declared a final dividend of 7.25c a share and added its payout ratio would remain at 50 to 60 per cent of its cash earnings.