Here’s why the FlexiGroup Limited share price sunk 17% today

Credit: Mighty Travels

The FlexiGroup Limited (ASX: FXL) share price fell as much as 17% today despite the company announcing profit and revenue growth in its most recent half-year reporting period.

For the year ended 31 December 2015, FlexiGroup reported revenue growth of 6.1% to $176.6 million and a profit of $41.4 million, up 7.5% on the prior corresponding period.

Pleasingly, the board declared an interim fully franked dividend of 7.25 cents per share, in line with last year’s payment.

“New Zealand Leasing delivered standout volume and receivables growth, with Cash NPAT growth of 63%, driven by the realisation of synergies from recent acquisitions and low impairment rates,” FlexiGroup Chief Financial Officer, David Stevens, said.

All but the company’s Australia Leasing business reported operating profit growth, with the company’s Interest Free Cards business increasing profit 23% year over year.

“Our Interest Free Cards business also delivered double digit Cash NPAT growth, with customer card spend up 37% and a number of new retail relationships signed,” Mr Stevens added.

Looking ahead, the company is targeting cash net profit between $92 million and $94 million, excluding profit from the recent F&P Finance acquisition. Moreover, the board has not changed its dividend policy from a targeted payout level between 50% and 60% of profit.

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Motley Fool writer/analyst Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen welcomes -- and encourages -- your feedback on Google+, LinkedIn or you can follow him on Twitter @ASXinvest.

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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