Flexigroup is still a buy

With the Fisher and Paykel Finance acquisition completed, we’re monitoring risks going forward.

Over the past few months, consumer-lending business Flexigroup (FXL) has announced the completion of its acquisition of Fisher and Paykel Finance (FPF) and another securitisation of receivables from its Certegy business. While the completion of the acquisition is a positive – in that it occurred a couple of weeks before our expected completion date – the company has yet to provide the market with an update to its cash net profit guidance. While a successful debt issuance through a securitisation is a mild positive as well, we are keenly awaiting any updates to company guidance in order to understand the expected earnings contribution and integration benefits of the FPF acquisition. For now, we are comfortable in our recommendation on FXL, but note that the longer the wait is for the company to provide an update, the more we see risks building.

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