FlexiGroup reports 29 per cent profit increase to $29.3 million

By Martin Vedris

SYDNEY: FlexiGroup, a leading provider of retail point-of-sale lease and rental finance (ASX code: FXL) reported a pro-forma consolidated net profit after tax of $29.3 million for the 12 months ended 30 June 2007 — a 29.1 per cent increase over 2006.

The result was also 6.5 per cent above over the pro-forma prospectus forecast of $27.5 million. Pro-forma earnings per share were 13.5 cents and a final fully franked dividend of 5.5 cents will be payable on 24 October 2007.

New assets financed (ie leases and loans) of $310 million represents growth of 20.0 per cent on the previous year.

FlexiGroup indicated that a key to its success is the relationships it has built up with approximately 4,400 active retailers, including the Harvey Norman group and Apple.

“FlexiGroup’s core rental products continue to underpin performance and the IT channel performed above expectations,” said John DeLano, managing director and CEO.

“The increasing popularity of gaming along with increased demand for high tech products such as satellite navigation systems and hand held PCs helped to drive growth in the IT leasing segment.

“While the overall retail performance of the electrical appliance market has been strong over the last 12 months, the Ezyway product continues to outperform the underlying category growth. The electrical leasing segment remains under penetrated and provides significant opportunity for further growth.

“In February 2007 FlexiGroup launched a personal loan product to existing customers. The launch proved successful and the product is currently tracking to forecasts. FlexiGroup has recruited an experienced management team to grow the loans business and will continue to promote the product to existing customers who have already demonstrated their credit quality to FlexiGroup.”

Mr DeLano concluded, “Credit quality has been maintained. As at 30 June 2007 Australian arrears were at 4.6 per cent compared to 4.8 per cent at 30 June 2006.”

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