5
Blink Mobile Broadband
(February 2009 organic start-up)
The Blink business, which provides fast
and reliable mobile broadband plans,
increased its active customer base
by 37% to 74,000 and now has more
than 35% market share in key retail
channels. NPAT improved $4 million
to 6% of the group’s total.
The rollout of the Blink Mobile
Broadband Tablet Plan in key retailers
across the country was a highlight
during the year. This unique product
ofers consumers an alternative to
paying by cash or credit for a tablet
device. Under Blink’s innovative model,
consumers receive the device for
$0 upfront when they take out a Blink
mobile broadband plan. We expect
growth to continue as tablet stock
in retail stores becomes more freely
available in fscal 2012 in a market
estimated at one million units.
Flexirent
The Group’s original point of sale
leasing business again outperformed
in a challenging retail environment,
delivering a 6% increase in sales
volumes to $238 million. Diversifcation
into the non-retail commercial sector
provided growth opportunities and led
to higher average transaction amounts.
Growth accelerated in the fourth
quarter, with the volume contribution
of the non-retail commercial sector
increasing from 15% to 29%.
FURTHER IMPROVEMENT
IN CREDIT METRICS
Our ongoing prudent approach to
risk underpinned the net impairment
result. Losses in fscal 2011 declined
to 3.8% of average net receivables,
down from 4.4% in fscal 2010, despite
19% growth in receivables. The result
refects the eforts of our award-
winning collections team, combined
with continued investment in new
technology platforms. The experience
gained from more than 20 years
providing consumer and business
credit is embedded in FlexiGroup’s
credit scoring systems.
All four of our business units assisted
our strong fscal 2011 performance.
The highlights were:
Certegy Interest Free
(October 2008 acquisition)
Certegy, our no interest ever payment
plan provider, delivered a standout
performance in fscal 2011, particularly
in the home improvement, ftness
and solar energy sectors. Since its
acquisition in 2008, Certegy has had
strong volume and net proft after
tax growth. In fscal 2011 volumes
increased 30% to $375 million. Cash
proft rose 80% to $13.7 million,
which was 26% of the group’s total
cash proft.
The
Lay-Buy Express
processing
service was successfully introduced in
a number of retail stores, including the
Toys-R-Us group in Australia. The new
product ofers the traditional features
of Lay-by but allows consumers to self-
manage their repayments and removes
operational and administrative costs
for retailers. Customer take-up of the
service has exceeded expectations
with
Lay-Buy Express
contributing
more than 10% of Certegy’s June
transaction volume. Its contribution
is expected to increase in fscal 2012.
Flexi Commercial Vendor Finance
(December 2009 organic start-up)
Flexi Commercial Vendor Finance, a
two-year old business that provides
commercial equipment fnancing and
vendor programs, delivered a strong
result. The result was underpinned
by the signing of formal program
agreements with 11 new vendors,
maturing vendor relationships and the
conversion of business development
activity. Volumes increased an
impressive 221% to $61 million. Net
Proft after Tax (NPAT) for Vendor
Finance doubled to $2.6 million.
CONTINUED GROWTH
In fscal 2012 we anticipate continued
strong growth as we leverage our
core capabilities, develop innovative
products and systems, and capitalise
on new opportunities. Growth in fscal
2012 will be assisted by:
• a full-year volume contribution
from
Lay-Buy Express
– Certegy;
• increasing contribution to small
ticket leasing from non-retail
segments – Flexirent;
• a full-year performance from
Vendor Finance new partner
programs – FlexiCommercial;
• further signing of new Certegy
Interest Free retailers – Certegy;
• development of a product to
penetrate the signifcant market
opportunities for deferred internet
payment processing – Online; and
• a continued focus on value
accretive acquisition opportunities.
CAPABILITY TO DELIVER
Our energetic and dedicated team
has embraced the signifcant change
experienced by the Group over the
past few years to deliver impressive
results in fscal 2011. I would like to
thank them for their ongoing support
and efort and also congratulate
our award-winning Contact Centre,
Collections and IT Teams.
One of our goals is to make FlexiGroup
the best place our people have ever
worked. Therefore it is extremely
pleasing that we were recognised
this year as one of Aon Hewitt’s Best
Employers. Our Board and senior
management believe that companies
with engaged, committed people
achieve strong fnancial performance,
and our results in fscal 2011 support
that view. We recruit the best talent,
and that strategy continues to drive
superior results for our workforce,
customers, partners and shareholders.
JOHN D
E
LANO
MANAGING DIRECTOR AND CEO
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.