- Flexigroup (FXL) has revealed its FY20 results, showing a 64 per cent decrease in profit, and announced a new capital raising venture
- The company plans to raise $140 million via a one-for-3.2 retail and institutional entitlement offer
- Shares will be offered for $1.14, with over 123 million shares on offer under the capital raise
- The funds from the entitlement offer will be used to strengthen the company’s balance sheet to invest and grow the brand
- Flexigroup ended FY20 with $393 million in the bank, slightly up on last financial year’s balance
- Shares in FXL have been placed in a trading halt until August 28
- They last traded for $1.31 per share
Fintech company Flexigroup (FXL) has released its full annual report for the 2020 financial year and announced a $140 million capital raise.
Entitlement offer
Flexigroup plans to raise $140 million via a retail and institutional entitlement offer to eligible shareholders, with $115 million already underwritten.
Under the offer, one new share will be available for every 3.2 already held, with the new shares to be priced at $1.14 each.
Over 123 million shares will be issued under the offer, with the company’s chairman already subscribing for $7.5 million worth of shares.
Flexigroup said the capital raise would help strengthen its balance sheet and also allow it to pursue growth in its brand, including its buy now, pay later service Humm.
“With the hard work now done in simplifying and streamlining our business, the equity raise will allow us to invest and grow our strongest brand from a position of strength,” Flexigroup CEO Rebecca James said.
“With our business focused on one brand and one ambition, we are confident that now is the time to ramp up our go-to-market strategy as Humm,” she added.
Annual results
The fintech company ended FY20 with a mixed bag of results, including a big drop in profit.
Statutory net profit after tax (NPAT) dropped 65 per cent over the last financial year, from $61.7 million to $21.4 million.
The decrease in statutory NPAT is being blamed on the COVID-19 pandemic, which negatively affected its customer’s financial positions.
Pleasingly though, the company ended FY20 with just over $393 million worth of cash in the bank, a slight increase on the $390 million at the end of FY19.
Shares in Flexigroup have been placed in a trading halt as the company awaits the results of the institutional component of its entitlement offer.
It expects the trading halt to lift by Friday, August 28.
Shares in FXL last traded for $1.31 each on August 25.