Ann: FXL - Full Year 2020 Trading Update, page-148

I actually thought this was incredibly robust - FXL would have had an extremely tough 2H20 (especially with NZ in total or near total lockdown for 2 months), yet still made over $25m in Underlying Cash NPAT.

Given the payout ratio is 30-40% of Cash NPAT, I expect FXL to pay 1H20 dividend, a possibly another cent dividend - making this a pretty good yield (nearly 4%) - especially in these times!

But the dividend for me isn't the focus... Top line receivables growth has increased from 5.1% at 1H20 (ie 2H19 to 1H20 growth of 5.1%) to over 10% in 2H20 (ie 1H20 to 2H20) - bringing the total to over 16% for the year - absolutely stunning given the lockdown and significantly reduced card spending!

How the market is disappointed with not only increasing growth (a doubling in growth rate from 1H20 to 2H20) and for a substantial Cash NPAT, combined with (potential) 4% dividend yield in the middle of a recession is just stunning. FXL have also shown they actually make money on their BNPL product also - I would have thought this was pretty important, but clearly the market doesn't care.

One thing that is clear is that FXL isn't reliant on capital raising, mergers, high leverage or hype - it seems grinding away doing a great job repositioning and growing isn't what is wanted these days - more exciting to do a Worldcom and grow grow grow and cross fingers profits follow sometime, maybe.