- Fintech company FlexiGroup (FXL) increased customers, transaction volumes, and merchants over the March quarter
- The growth comes despite the COVID-19 woes that plagued February and March
- According to FlexiGroup, some transformation strategies from February 2019 put the business on solid ground to weather the coronavirus storm
- Of course, the worst is not yet over, with the business seeing lower trading activity at the start of April due to coronavirus lockdown measures
- FlexiGroup shares are currently trading 3.52 per cent lower at 68.5 cents each
Fintech company FlexiGroup (FXL) has seen an increase in active customers, transaction volumes, and merchants over a quarter ravaged by COVID-19.
The company revealed the business growth in a trading update to investors this morning. While the figures are unaudited, FlexiGroup touted a strong performance over the incredibly uncertain quarter.
Compared to the March 2019 quarter, FlexiGroup’s active customers increased by 11 per cent over the March 2020 quarter to 1.89 million customers.
Going hand-in-hand with the customer growth is an 18 per cent increase in transaction volumes compared to the same time last year. Receivables increased by five per cent to $2.77 billion.
Meanwhile, FlexiGroup now partners with 71,000 merchants — 12 per cent more than this time last year.
A plan comes together
FlexiGroup said its success comes from a transformation strategy put in place in February 2019.
According to FlexiGroup, the strategy put the business on “solid footing”, with steps already taken to streamline its workforce, increase automation and self-service options, and help customers stay in control of their finances.
With businesses across the globe taking on dramatic costs reduction activities, FlexiGroup is no exception. The company said it’s likely to exceed its $7 million cost-savings target for the 2020 financial year.
FlexiGroup operates in the buy now, pay later sector (BNPL), but has expanded its services into credit cards and small-to-medium-enterprise (SME) lending.
Interestingly, while most BNPL users are within the millennial age group, which is generally accepted as those born between 1981 and 1996, FlexiGroup said over three-quarters of its customers are over the age of 35 with a strong penetration of home ownership.
Given the unique customer base, FlexiGroup is able to focus its business on home improvement services, including health and wellbeing specialists; mattresses, air conditioning, and solar panels; and children’s and pet’s ranges.
Bracing for impact
Nevertheless, FlexiGroup said in the early days of the final quarter for the 2020 financial year, it’s clear trading will be subdued as communities adjust to social distancing measures.
In fact, despite the increased customers and receivables, the company posted a 3.9 per cent loss over the March quarter.
The company said it’s difficult to determine any trends at this stage, but so far the coronavirus has caused a reduction in discretionary retail spending and softer demand for lending.
FlexiGroup CEO Rebecca James said while COVID-19 has had widespread impacts on the broader economy, the company’s main focus has been supporting customers, merchants, and employees.
“While we continue to see softness in discretionary retail spend, we are seeing consumer spending pivot towards key verticals such as solar, health and wellbeing, and home improvement,” Rebecca said.
“Our solid performance in the third quarter has been underpinned by Australia and New Zealand’s ability to rapidly adapt to the new status quo. There has been a significant shift by many businesses to transition their operations exclusively online and this is a testament to the resilience of the businesses that underpin our economy,” she said.
FlexiGroup shares spiked in the early minutes of trade but quickly lost some of their shine. By mid-afternoon, shares in the company are trading 3.52 per cent lower at 68.5 cents each.