Investment in 'digitisation' pays dividends for FlexiGroup

An investment program aimed at "digitising" operations is paying dividends for finance company FlexiGroup, which reported higher earnings in all five of its business units for the December half.

FlexiGroup made a net profit of A$38.5 million for the six months to December - an increase of 11 per cent over the previous corresponding period. After adjusting for "residual value loss" in one of its businesses, cash profit was $42.5 million - up nine per cent on the previous corresponding period.

Cash return on equity was 22 per cent.

The company's biggest division, No Interest Ever (which operates under the Certegy brand), increased cash profit by ten per cent to $16.6 million for the half.

Consumer and SME Leasing (Flexirent, Flexi Commercial and Smartway) increased cash profit by three per cent to $12.2 million. It was the first time the division had increased earnings since 2011.

Interest Free Cards (Lombard and Once) increased cash profit by ten per cent to $5.6 million.

Enterprise Leasing (Think Office Technology and Flexi Enterprise) increased cash profit by 11 per cent to $4.9 million.

New Zealand Leasing increased cash profit by 23 per cent to $3.2 million.

FlexiGroup has been a highly acquisitive company. Starting in 2008 its acquisitions have included Certegy, Lombard, Once, RentSmart and Think Office Technology.

The company's chief executive Tarek Robbiati said that over the past year the company had invested in systems that will allow the business to operate on online platforms. This digitisation of the business contributed to improved customer satisfaction, led to more repeat business, and helped retail partners by making application and approval processes more efficient.

Certegy has started marketing direct to its customers, offering a "click, apply and collect" pre-approval process.

Lombard and Once have a digital origination process that gives retailers in-store approval times of 20 minutes. The cards also have a mobile payments app operating on Android phones.

The consumer division also offers retailers online applications.

Collections are also managed through digital channels.

Among the benefits of this investment, the company has been able to reduce its cost-to-income ratio from 45 per cent in 2011 to 40.3 per cent in the latest half.

Improved service levels have helped lift the company's net promoter score to more than 50 per cent.

The digital platforms have allowed the company to target repeat business with a VIP program. During the December half-year, 9.4 per cent of the company's VIP and pre-approved customers signed up for repeat business. That proportion has been growing steadily.