FlexiGroup to strengthen its sales and marketing

The next chief executive of finance company FlexiGroup will have a strong sales and marketing background, the company's new chairman told investors at its annual results briefing yesterday.

FlexiGroup has had some turnover at the top lately, with chief executive Tarek Robbiati making an early departure and chairman Chris Beare also making a surprise exit last week.

New chair Andrew Abercrombie, who has held a substantial stake in the company and been a director since 1991, said: "This is a sales and marketing business, more so than a finance business. The emphasis has to be on managing our channel relationships and growing new ones."

Former CEO Tarek Robbiati came from an IT background and made significant changes to FlexiGroup's technology platform.

Abercrombie acknowledged Robbiati's contribution to the digitisation of the business, which sped up processes and helped reduce costs, but said the changes had involved some disruption.

The disruption was evident in the latest results, which were notable for the poor performance of two business units - small business leasing and enterprise leasing.

Business volume in both units was down during the year to June - down 30 per cent in the case of enterprise leasing and 23 per cent for SME leasing.

"There is a lot of work to be done," said FlexiGroup chief financial officer and acting CEO David Stevens.

Stevens said the SME leasing decline was caused by increased competition in the sector and outdated product. The company has new product, with a risk-based pricing structure, that will be launched in the December quarter.

It will look for growth in new distribution channels, such as healthcare and education.

Enterprise leasing has had changes in its management team and an organisational restructure.

The company made a net profit of A$82.7 million for the year to June - an increase of 44 per cent over the previous corresponding period. After adjusting for acquisition costs and amortisation of acquired intangibles, cash profit was up six per cent to $90.1 million.

Impairments were up 30 per cent to $44.5 million. Expenses were down 12 per cent to $115.8 million. Return on equity was unchanged at 23 per cent.

FlexiGroup's biggest business unit, No Interest Ever! (Certegy), reported cash profit of $34.4 million - an increase of seven per cent over the previous corresponding period.

The interest free cards business (Lombard and Once) was up 12 per cent to $12.3 million.  New Zealand leasing was up 25 per cent to $7 million.