FXL Flexigroup

[t.rexjr]

Annual results came out... this year was in line with expected, it was next year that wasn't so hot... showed no or up to 6ish% drop in profit... not surprisingly investors voted with their feet... the retail investors were first to panic with the share price falling double digits to hit $1.65, on low opening volume. Finished down 5%... and I'm thinking it will be above $1.80 in no time... once people put their patience and thinking caps back on.

What the annual results showed was EPS of 24.3 cps... confirming what I have said for a long while... that FXL is trading on ridiculously cheap valuations (7.2 at todays closing price)... then again what today also showed is the reason why (reason for now at least)... due to profit expected to be stagnant or slightly off this coming year. What didn't help was the dividend being near rock bottom of the payout ratio (being same as half year - representing bang on 4% yield at today's closing price (fully franked for the aussies).

Ironically, the underlying business (notably excluding certegy which is one of the key reasons for the stagnant profit) is expected to improve by 5 - 10m, well up from the slideshow last year showing 1 - 6m imporvement in underlying business.

Opearting cash flows were yet again a highlight, and impairments actually decreasing to their lowest point in years also a slight surprise (for me)... top line growth also there which will flow through to bottom line, just quite this coming year - the aussies are an impatient lot and those in for a quick buck punished share price accordingly (hard to believe it went down to $1.55 earlier in the year - truly stupid times that was)

FY18 will be one of stabilisation (as mentioned by management) and could even provide some upside in 2nd half.
FY19 is now the big one... very interesting and informative presentation (makes a nice change!) - I encourage you and others to take a look - can explain much more about the business than I ever could.

I believe we are in the middle of a turn around, and going to start the upward swing, if not already on it. I reckon $2 by Mid Feb next year (although I would have liked for that to have been a few weeks ago - but the market doesn't like waiting)

At the end of the day, if you can't wait 6 months to a year, and don't want an above bank interest rate being given to you while you wait, don't buy flexi.
If you want a stock priced over 2x cheaper than HBL, and likely to provide similar double digit growth in a year's time, and you're happy to wait and get a little bit of cash in the mean time, FXL should be on the shopping list.

Agreed. I'm glad someone has taken the time to articulate my internal synopsis clearly...

The exodus of the dividend collectors along with the lack of opportunity for a quick buck explains the volatility for my mind. A change of guard so to speak.

Holding both HBL and FXL in my investment portfolio so was mulling over the pros and cons of holding both today. Maybe I'm a sucker for their fresh & fancy marketing but FXL has me a little more enthusiastic.

Golly gosh, buying today through ANZ was tedious. Put in my order for $1.66 and the share price came and went in the seemingly 10hrs it took for my order to be placed. Ended up having to chase the price back up again. I do my trading through ASB and it's significantly faster!