3
Dear Shareholder,
It is a great pleasure to report fscal
2011 was another year of success for
FlexiGroup, with double-digit revenue
and proft results.
FlexiGroup’s cash net proft after
tax
1
for the year ended 30 June 2011
was $52.9 million, representing
a 27% increase on the prior year,
while volumes
2
also grew 27% to
$695 million.
The cash net proft result was 12%
above the guidance provided a
year ago.
DIVERSIFICATION STRATEGY
DELIVERS
As many shareholders are aware,
FlexiGroup has signifcantly evolved
from its initial public ofering just fve
years ago. What was then a single
business unit, notably dependent
on volumes from key retailers, has
become a diversifed fnancial services
group with four strong business units.
In my view, the tremendous change
and success at FlexiGroup can be
attributed primarily to three things:
diversifcation, a high performance
culture of excellence across the
workforce, and a prudent approach
to risk.
Three years ago, FlexiGroup
embarked on a strategy of
diversifcation. That strategy was
vindicated in fscal 2011, with strong
results achieved in a challenging
economic retail environment.
The diversifcation at FlexiGroup has
protected you, our shareholders, by
broadening our revenue sources and
expanding our customer base beyond
the retail sector.
While the fnancial results achieved
by FlexiGroup’s employees spoke
volumes for the culture of high
performance, the awards from
respected organisations are a further
endorsement of the quality of the
FlexiGroup team.
VALUE FOR SHAREHOLDERS
Since our IPO in 2006, FlexiGroup
has more than doubled net proft
after tax and volumes. In fscal 2011
the Group ranked eighth for total
shareholder return among S&P/
ASX300 non-mining companies.
Over the past two years the
Group has been in the top 20% for
earnings per share growth and the
top 10% for dividend per share growth.
The fully franked fnal dividend of
5.5 cents per share (which was paid on
October 13), when combined with the
interim dividend of 5 cents, represents
annual dividend growth of 40%.
POSITIVE OUTLOOK
For fscal 2012, the Group has
committed funding facilities and
a strong balance sheet to support
growth, as well as to provide
capacity to consider any value
accretive acquisition opportunities
that might arise.
Finally, on behalf of the Board of
Directors, I would like to thank all
of FlexiGroup’s customers, partners,
funders and shareholders for their
continuing support. I especially
wish to thank the entire team
at FlexiGroup for their ongoing
dedication and excellence.
MARGARET JACKSON
CHAIRMAN
The original Flexirent business has
developed new growth opportunities,
and all businesses in the group
contributed to the 27% volume growth.
Most pleasing was the increasing
contribution of the three newer
businesses (Interest Free, Mobile
Broadband and Vendor Finance).
In fscal 2011, these three businesses
accounted for 66% of volume.
Moreover, thanks to Certegy Interest
Free and Blink Mobile Broadband,
almost 60% of our revenue base is
now non-interest income.
It is worth singling out the success
of Certegy as an example of what
can be achieved when management
and employees are aligned to build
a business – cash proft rose 80% to
$13.7 million, or 26% of the Group total.
Since acquisition, Certegy’s net proft
after tax has more than trebled and
is on track to repay the $31 million
acquisition cost in a little over
three years.
CULTURE OF EXCELLENCE
While broadening our business
base has been an essential element
of FlexiGroup’s strategy and success,
the Group has been just as committed
to developing an engaged workforce
capable of delivering outstanding
results for shareholders. Fostering
a culture of excellence at the Group
is crucial to maximising shareholder
returns for the long term.
The Board is proud that FlexiGroup’s
focus on excellence, led by Chief
Executive John DeLano, was
recognised by the receipt of three
prestigious awards during the past year.
The awards included being recognised
as one of Australia’s Best Employers,
Australia’s Best Contact Centre, and
for Best IT Architecture Worldwide.
1 Cash NPAT excludes intangible amortisation of $1.1 million.
2 Volume is all volumes for leases, loans, vendor fnance, Certegy and gross revenue for Blink Mobile Broadband.