Under the leadership of its new chief executive, Bob Belan, Latitude Group will “take steps to ensure the company’s capital is invested in a smaller set of high-yielding growth opportunities”.
Belan made his first public appearance as Latitude CEO yesterday, when he addressed the company’s annual general meeting.
Latitude has already announced measures to trim its business. In February it closed its by now pay later businesses in Australia and New Zealand.
The company’s 2022 financial report revealed that the “interest free” part of the business was slow to develop and needed more investment to improve the consumer and merchant experience.
Last August, Latitude announced it would sell its insurance business, Hallmark. Belan said the sale would be completed soon.
Latitude will report an after-tax loss of around A$30 million on the sale, including goodwill and other intangible asset write-downs. The transaction is expected to return around $90 million in capital.
Belan said: “We will soon launch a new set of strategic revenue and cost optimisation initiatives aimed at improving our operating leverage. While expense management has been a key highlight in our results over the past few years, there is still more opportunity in my opinion to run our business more efficiently.
“We will continue to seek out new partnerships, new distribution channels and new revenue streams to help drive incremental profit growth. This includes our exciting new credit card partnership with David Jones, launching later this year.”
The company did not have much to add about its cyber attack. Chair Mike Tilley said there was no evidence in its systems of activity from the threat actors since March 16.
Tilley said the disruption to business as usual was still being assessed and was expected to adversely impact Latitude’s 2023 growth and net profit.
In its 2022 financial report, the company said the “unprecedented size and speed” of the Reserve Bank’s cash rate increases played a big part in Latitude Group’s poor financial performance last year, along with “elevated” credit card and loan repayments.
Latitude’s net interest income fell 12.9 per cent to $675.8 million in the 12 months to December last year. Over the past two years net interest income has fallen 23.2 per cent.
Net profit fell 77 per cent from $160.3 million in 2021 to $36.3 million last year. The company’s preferred measure, cash profit from continuing operations, was down 23 per cent to $153.5 million.
All resolutions, including the remuneration report, were passed at the AGM.