What happened? FlexiGroup Limited (ASX: FXL) announced on Tuesday that Managing Director and Chief Executive Officer, Tarek Robbiati, has given notice of his resignation to return overseas and will step down in the second half 2015. Pleasingly the group also confirmed guidance of cash operating net profit after tax (NPAT) between $90 and $91 million for the 12 months ending June 30 2015.
Why Now? Mr Robbiati joined FlexiGroup in January 2013 and oversaw an expansion of the business as well as a significant improvement in group profitability. In an interesting statement to the market Mr Robbiati, who previously worked in an Asia-based executive position at Telstra Corporation Ltd (ASX: TLS), essentially said that his work was done at Flexigroup, having transformed the business so that it was "on track to lead the Digital Finance industry in Australia and New Zealand".
In his first full year in charge, Mr Robbiati led the company to an 18% increase in cash NPAT and will generate another 7% increase this year. During his time, Mr Robbiati sharpened the group's focus on the rapidly growing no-interest-ever product for major household purchases such as solar panels, the interest free credit card offering, and expanded the group's presence in New Zealand with the recent purchase of Telecom Rentals Limited from Spark New Zealand Ltd (ASX: SPK).
What Now? The market didn't like the announcement, pushing the share price down 2% at the 10am open, however I expect the company will find a suitable replacement that can continue its impressive growth into the 2016 financial year. There could be some upside from small business purchases towards the end of the financial year following the government's initiatives for small businesses and Flexigroup remains exposed to consumer confidence due to its Rent-Try-Buy product and SmartWay Leasing system sold through JB Hi-Fi Limited (ASX: JBH).
