The best performer on the All Ordinaries index on Thursday has been the FlexiGroup Limited (ASX: FXL) share price following an update on its buy now pay later platform.
In morning trade the financial services company's shares are up almost 17% to a 52-week high of $2.29.
What was in FlexiGroup's update?
According to the release, FlexiGroup has continued to add a number of high profile retailers to its buy now pay later platform, humm.
Management believes that these new additions represent robust momentum across humm's target verticals of retail, health, and home improvement.
These include Metcash Limited (ASX: MTS)-owned Mitre 10, Home Timber & Hardware, Hanes Australasia, Dealsdirect.com.au, Zanui, KOOKAÏ, SurfStitch, and Smile Solutions. These additions have helped lift the total number of retail partners on its platform to 18,000.
The new retailers certainly appear to have had a positive impact on its performance in FY 2020. The release explains that volume growth across its key verticals during the first two months of the financial year is up 85% on the prior corresponding period.
Furthermore, financial year to date, total transactions on the humm platform are up 25% year-on-year. This has been driven by growth in the number of Little Things purchases (transactions up to $2,000 and repaid over 10 to 20 weeks), which have grown by 67%.
FlexiGroup's CEO, Rebecca James, said: "I'm delighted to welcome a wide range of iconic Australian retailers to the humm platform as our retail partners and customer numbers continue to grow. These retailers have been attracted to humm's differentiated product offering – servicing a wider breadth of transactions and offering greater repayment terms to their customers. By continuing to focus on our key verticals we have experienced exceptional volume growth, driven by triple figure growth in both the health and retail verticals."
"The traction seen in humm since its launch in April also reflects our strength in building strong consumer facing brands that deliver a unique and compelling user experience direct to consumers. We look forward to repeating this success with our new Buy Now Pay Later products bundll and wiired money that we will be launching in the coming year," she added.
Should you invest?
I've been impressed with the development of humm and believe it could be a key driver of growth for FlexiGroup over the coming years.
And with its shares changing hands at just 12x earnings, it could make it worth considering as a cheaper alternative to Afterpay Touch Group Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P).
