Shares in consumer finance group FlexiGroup (FXL) didn’t find the weak retail environment, especially for consumer electricals such as computers, a barrier to improving 2012-13 earnings.
And it doesn’t see any barriers in the coming year – and believes a switch to solar power to limit the impact of high electricity prices, will help it boost earnings by up to 19% in 2013-14 – to a range of $84 million and $86 million.
The company reported a 12% rise in net profit to $65.8 million in the year to June, against the $58.9 million earned in 2011-12.
That was on a 15% rise in group revenue to $284.1 million from $246.2 million in 2011-12.
Directors declared a fully franked final dividend of 7.5c per share, compared to 6.5c per share paid for the same period last year.
The final dividend is at the top end of the 50-60% payout range. That took total payout to the year to 14.5c a share from 12.5c in 2011-12.
FlexiGroup shares rose 3c to $4.67, within sight of this year’s high of $4.70 hit in May.
FXL 1Y – FY profit lift boosts shares
The company’s products include business and individual equipment rental, lay-by plans and credit card finance.
It said yesterday that higher government solar subsidies had helped its payment plan business Certegy.
Certegy’s Ezi-Pay system allows customers to pay off their solar panels and other energy-efficient systems over a period of time. (Power on the never never?)
"Certegy seized the volume opportunity induced by high government solar subsidies to grow strongly in the first half of (fiscal) 2013," FlexiGroup chief executive officer Tarek Robbiati said in yesterday’s statement.
The move by state governments to reduce these subsides would not adversely affect the company, according to the CEO.
"We see continued contribution of solar volumes as energy costs rise for customers and businesses and the industry recovers from the significant reduction of government subsidies."
Mr Robbiati said Certegy had prepared for the subsidy cuts by funnelling customers to a new VIP program, which delivered $84 million in new non-solar revenue.
He said, “With full-year net profit after tax growth accelerating relative to the 1H13 growth rate, this is a strong result across the business.
Our business mix is well diversified now, and our receivables continue to grow with the acquisition of Once Credit on 31 May 2013, adding further scale to our business for the full 12-months of FY14."
“Full-year receivables growth has been largely driven by Lombard, Certegy and Flexi Commercial Enterprise, with receivables increasing 52%, 18% and 27%, respectively on FY12," he said.
