Originally Posted by
trader_jackson
It was not a pretty picture painted on page 33 of the annual report... so far FY18 is on track to be the 5th year in a row of negative TSR... slow and steady usually does it, just not when it is in the complete wrong direction.
I could only find 1 share price that was lower than the finish price today, yet ironically their cash EPS is higher than the share price low of $1.60 in 2012...
Still makes me laugh that the share price closed at $4.36 in 2013, yet Cash EPS was less than today...
For what its worth, and right now its probably worth more than FXL's share price (but that's not hard when its sub $1.60)
Comments
- Flight Centre Card: seems to have been a fair amount of spend in NZ & Aussie related to setup, and ideally profit will start coming through from this late FY18
- branded finance programs: Bit of commentary on this but I'll touch on the partnership with Australia’s second largest dental group. "Rollout of this solution occurred in the second half of FY17 and was well received by our vendor partners. As a result of this successful rollout we have had a number of discussions with other large scale dental practices aspiring to offer similar products." - sounds interesting and could be some more deals signed, profit from this will hopefully start coming through FY18
- Since buying F&P cards 2 years ago, merchants partnered with QCard have gone up by 1000 (fun fact), this should contribute to growth I would have thought...and now that the old closed loop QCard has now been converted to QMasterCard - and the costs inccured in this mostly related to FY17, hopefully profit will start to climb nicely in FY18 and beyond (average spend is up by 9% - another bonus)
- Oxipay was launched in FY18 with 549 retailers already on board although I wouldn't expect to see profit from this until 2nd half FY18, perhaps FY19.
- FLexi-Fi (Ireland business) was setup in June 2017 with 60 stores, again probably won't see profit from this till 2nd half FY18, maybe even FY19
- New global card definitely on the way - first time I had heard of this, but the market couldn't seem to care less. Sounds like it could be a premium based card, high spend, 'high reward' card.
- They seem to be developing systems, some proprietary even, which are costing a fair bit of time and money, but are based around selling not only the best product, but multiple products (cross selling) given Flexi have a few good offerings now setup - this could be very nice as well.
- Partnership with Lenovo for Managed services - certainly not a bad thing for the commercial arm!
- The elephant in the room I think is Certegy: how 'bad' will this be (right now the market is pricing in a blood bath, and management don't sound to be terribly confident for FY18. ”Investment in Certegy during FY18 will return the business to growth in FY19" screams to me another backwards year, but things to turn around in FY19.
- Aussie commercial sounds releatively similar to Certegy - although it sounds like a turnaround back to profit growth is on the cards this year
- Fun Fact: the founder owns more shares than he did last year and retail holders have been exiting with total shareholders down 900 ish (to 11727, although well up from 2014 where they 3302 less)
For me, the key areas of growth FY18 and particularly FY19 will be:
Aussie & NZ Cards, and on a more minor scale, Flexi-Fi, Oxipay.
Why? big costs have been incurred this year, it usually takes 9 to 11 months to make a customer profitable (for cards anyway)
Consensus is for 85.9m, basically bang on the bottom of their range so right now the market is pricing in a miner fall in profit... The market is quite literally pricing in none of the above potential areas for growth... I suppose then again this is due to flexi confirming no growth expected this year... and given previous years, brokers have taken (near) the worst possible view.
Don't know how it can go much lower given the above - and ideally first half update will start to show/confirm some progress, with 2nd half really starting to take off into FY19.
One for my bottom draw that is for sure... will see how things are in February 2019. I don't quite want to say it, but I am thinking the $1.50 ish area is well and truly the bottom.