" If investors thought financial-services company FlexiGroup...

" If investors thought financial-services company FlexiGroup
(FXL.AU) was on top of its recent problems then the surprise pre-release of its FY15
result would have come as a nasty surprise. This time the bad news included the departure
of the company's chairman along with a nonexecutive director, weak FY15 volumes, and
disappointing FY16 guidance for a A$92 million-A$94 million (US$68.2 million-US$69.7
million) net profit. Macquarie downgrades the stock to neutral from outperform, but
indicates it had considered running it even lower. "Further significant share price
depreciation could, hypothetically speaking, make FlexiGroup an attractive acquisition
target, given recent interest in the space, and as such taking a 12-month view we move
only to neutral," Macquarie says. It highlights deals including the sale of General
Electric's (GE) Australia and New Zealand consumer lending business to KKR, Varde
Partners and Deutsche Bank in March. "Any acquisition will require the consent of
founder and now chairman Andrew Abercrombie, who holds 25% of FlexiGroup," adds
Macquarie, which cuts its price target by 25% to A$2.86/share. FlexiGroup trades down 15%
at A$2.665.

DYOR