HomeChoice FY HEPS up 7.2%
HomeChoice International increased full-year profits by 7.2 per cent as fintech revenue soared by more than a third offsetting a slump in retail sales. HomeChoice increased annual loans by 12.5 per cent to R4.839 million with cash collections also improving. CNBC Africa is joined by Sean Wibberley, Chief Executive Officer, HomeChoice International.
Tue, 12 Mar 2024 11:09:21 GMT
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AI Generated Summary
- Significant boost in profits by 7.2% attributed to strong fintech revenue increase overshadowing retail sales slump.
- Introduction of 'buy now, pay later' product 'Pages Now' drives new customer acquisitions with potential for further growth.
- Emphasis on customer affordability, responsible lending, and digital integration to enhance the retail business and drive cross-selling within the ecosystem.
HomeChoice International reported a 7.2 per cent increase in full-year profits, fueled by a significant surge in fintech revenue that surpassed a decline in retail sales. The company revealed a 12.5 per cent increase in annual loans to R4.839 million, with improved cash collections. CEO Sean Wibberley joined CNBC Africa to further discuss the financial results and shed light on the company's performance. Wibberley pointed out the remarkable growth in new customers, with a 39% increase, primarily driven by the fintech business. The 'buy now, pay later' product known as 'Pages Now' doubled its customer intake to 650,000 new customers last year, contributing to a total of 1.6 million customers in the fintech business. Wibberley highlighted the ease of adoption of the 'buy now, pay later' product, attributing its success to the no-cost payment method that resonates well with consumers. He acknowledged that the retail business experienced a reduction in its customer base due to tightened credit policies but emphasized the potential for growth in the digital segment. The CEO expressed optimism about the further expansion of the 'buy now, pay later' offering, considering the substantial room for growth with the credit-active population in South Africa standing at 25 million. HomeChoice International aims to capitalize on the popularity of this product to make purchases more affordable for consumers. Additionally, the company is piloting a retail credit product that allows customers to split payments over an extended period, introducing a new dimension to the digital payment ecosystem. Amid concerns about high-interest rates and consumer financial strain, HomeChoice International has enhanced affordability buffers to support customers during challenging economic conditions. The company remains cautious about extending credit and focuses on responsible lending practices, providing tools to help customers manage their debt effectively. While the traditional retail business has seen a shift in revenue sources, the demand for aspirational products remains strong, as reflected in the increasing cash purchases at showrooms. Wibberley credited the robust customer interest in the retail segment and emphasized the strategic measures taken to position the business for future growth. Looking ahead, HomeChoice International plans to launch new retail products and continues to invest in digital integration to enhance customer experience and drive cross-selling of products within its ecosystem. The company anticipates growth opportunities in leveraging its customer base to generate increased average revenue. With promising prospects on the horizon, HomeChoice International is poised for expansion and innovation in the evolving fintech and retail landscape.