Just thought I would add a couple of things. I agree MA if GE is...

Just thought I would add a couple of things.

I agree MA if GE is selling then the margins are low. Finance is realtively easy and cheap to raise in US and when sold in Australia we have a higher interest rate. Thus a built in profit margin. For GE to be selling they have other problems that outweigh this comparative advantage.

GE is a finance company that provides interest free finance to customers. They issue their own card (a GE card) which customers can use in store. They go to retailers like Harvey Norman and get them to run interest free promotions.

Flexigroup also offers interest free loans to customers. They issue their own card which is a Visa card and it is accepted anywhere Visa is accepted. They are called Lombards.

To buy out a part of GE they would be buying their competitor. This would mean difficulties in intergrating the GE management information system into Flexigroup. It would also mean taking on the bad and doubtful debts of GE customers. I doubt GE have increased their provisions in this area to cover bad debts or doubtful debts recently.

It takes longer to get approve for GE than it does to get approved for FlexiRent. The two systems are not compatable. This would give FXL a headache.

It makes more sense to me to target the retailers that promote the products GE sell such as Harvey Norman. Make them a better offer than GE and you take away the ability of GE to Generate new customers. If this happens then the next tiome you buy something from Harvey Norman on interest free terms they will take you to the window to do a Lombards finance application and not a GE application.

Remember that FlexiGroup already does rental contracts through FlexiRent with Harvey Norman. I hope that Flexigroup is using this time of uncertainty in the market to expand their association with retailers like Harvey Norman. Then whoever buys the GE business will have their ability to generate recurring business taken away from them.

I think it is much better to expand your current business than to take on the failings of a competitor.