HUMM GROUP LIMITED — Interim / Quarterly Report 2012

Feb 8, 2012

FLEXIGROUP LIMITED

ABN 75 122 574 583

Interim Report - 31 December 2011

Contents

Contents
	Page
Directors’ report	2
Auditor’s independence declaration	3
Interim financial report
Consolidated income statement	4
Consolidated statement of comprehensive income	5
Consolidated balance sheet	6
Consolidated statement of changes in equity	7
Consolidated statement of cash flows	8
Notes to the consolidated financial statements	9
Directors’ declaration	12
Independent auditor’s review report to the members	13

The interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the Annual Report for the year ended 30 June 2011 and any public announcements made by FlexiGroup Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 .

1

FlexiGroup Limited and controlled entities Directors’ Report 31 December 2011

Your directors present their report on the consolidated entity consisting of FlexiGro u p Limited and the entities it controlled at the end of, o r during, the half-year ended 31 December 201 1 .

Directors

The following persons were direct o rs of FlexiGroup Limited during the whole of the half-year and up to the date of this report:

Margaret Jackson (Chairman) John DeLano Andrew Abercrombie Rajeev Dhawan R John Skippen

Company Secretary

David Stevens

Review of Operations

The consolidated revenue of the G roup for the half year to 31 December 2011 incr e ased by 8.6% to $119.176 million (2010: $109.763 million).

The consolidated net profit after t a x was $27.511 million for the six months to 31 D e cember 2011 (2010: $24.474 million).

On 5 December 2011, FlexiGroup announced that an agreement has been entered into to acquire the business of Paymate Pty Limited (“Paymate”). Under the agreement, FlexiGroup w i ll acquire the assets of the Australian, New Zealand and A sian business for an undisclosed but not materi a l sum. The acquisition is subject to certain conditions tha t have not been achieved at 31 December 2011. Consequently, no recognition has been made at 31 D ecember 2011.

Dividends

During the half-year a final ordinary dividend for the year ended 30 June 2011 of 5. 5 cents (2010: 4.5 cents) per fully paid share was paid on 13 October 2011. Total amount paid was $15.282 million (2010: $12.396 million).

The Directors also declared an int e rim ordinary dividend of 6 cents (2010: 5 cents) per fully paid ordinary share. This dividend is expected t o be paid on 18 April 2012.

Auditor’s Independence Declaration

A copy of the auditor’s independe n ce declaration as required under section 307C o f the Corporations Act 2001 is set out on page 3.

Rounding of amounts

The Company is of a kind referred to in Class Order 98/100, issued by the Australi a n Securities and Investments Commission, relating to the “rounding off” of amounts in the Directors’ Report and Financial Report. Amounts in the Directors’ Report and Financial Report have been rounded off to the nearest thousand dollars in accordance wi t h that Class Order.

Matters subsequent to the end of half-year

No subsequent events have occurred since the balance sheet date.

This report is made in accordance with a resolution of directors.

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Margaret Jackson Chairman

Sydney 8 February 2012

2

FlexiGroup Limited Consolidated income statement For the half-year ended 31 December 2011

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Auditor’s Independence Declaration

As lead auditor for the review of FlexiGroup Limited for the half year ended 31 December 2011, I declare that to the best of my knowledge and belief, there have been:

• a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• b) no contraventions of any applicable code of professional conduct in relation to the review .

This declaration is in respect of FlexiGroup Limited and the entities it controlled during the period.

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Victor Clarke Partner PricewaterhouseCoopers

Sydney 8 February 2012

PricewaterhouseCoopers, ABN 52 780 433 757 Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 T +61 2 8266 0000, F +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

3

FlexiGroup Limited Consolidated income statement For the half-year ended 31 December 2011

Revenue from continuing operations Borrowing costs Employee benefits expense Impairment losses on loans and receivables Administration expenses Depreciation and amortisation expenses Communications and MIS expenses Marketing and travel expenses Profit before income tax Income tax expense Profit for the half-year Earnings per share for profit attributable to the ordinary equity holders of the company: Basic earnings per share Diluted earnings per share	Half-year 2011 Half-year 2010 $'000 $'000 119,176 109,763 (29,233) (26,095) (24,876) (24,558) (10,851) (11,440) (6,654) (7,394) (3,589) (2,827) (2,454) (2,216) (2,150) (2,315)
	39,369 32,918 (11,858) (8,444)
	27,511 24,474
	Cents Cents 10.1 9.3 10.0 9.1

The above consolidated income statement should be read in conjunction with the accompanying notes.

4

FlexiGroup Limited Consolidated statement of comprehensive income For the half-year ended 31 December 2011

Profit for the half-year Other comprehensive income Exchange differences on translation of foreign operations Changes in fair value of cash flow hedges, net of tax Other comprehensive income for the half-year, net of tax Total comprehensive income for the half-year	Half-year 2011 Half-year 2010 $'000 $'000 27,511 24,474 (663) (1,816) (824) -
	(1,487) (1,816)
	26,024 22,658

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

5

FlexiGroup Limited Consolidated balance sheet As at 31 December 2011

ASSETS Current assets Cash and cash equivalents Receivables Customer loans Inventories Total current assets Non-current assets Receivables Customer loans Plant and equipment Deferred tax assets Goodwill Other intangible assets Total non-current assets Total assets LIABILITIES Current liabilities Payables Borrowings Current tax liability Provisions Total current liabilities Non-current liabilities Borrowings Deferred tax liabilities Provisions Derivative financial instruments Total non-current liabilities Total liabilities Net assets EQUITY Contributed equity Reserves Retained profits Total equity	31 December 2011 30 June 2011 $'000 $'000 58,126 55,994 238,722 229,574 200,153 175,603 1,011 258
	498,012 461,429
	254,428 221,704 130,100 110,152 3,429 3,385 7,943 8,419 79,876 79,876 18,041 17,492
	493,817 441,028
	991,829 902,457
	29,204 29,686 389,997 324,494 13,835 11,357 3,422 3,782
	436,458 369,319
	273,098 265,626 32,692 33,638 751 470 1,402 228
	307,943 299,962
	744,401 669,281
	247,428 233,176
	81,644 76,645 (3,378) (402) 169,162 156,933
	247,428 233,176

The above consolidated balance sheet should be read in conjunction with the accompanying notes.

6

FlexiGroup Limited Consolidated statement of changes in equity For the half-year ended 31 December 2011

Balance at 1 July 2010 Profit for the half-year Other comprehensive income Total comprehensive income for the half- year Transactions with owners in their capacity as owners: Share based payments Transfer from share based payments on issue of shares under Long Term Incentive Plan Dividends provided for or paid Balance at 31 December 2010 Balance at 1 July 2011 Profit for the half-year Other comprehensive income Total comprehensive income for the half- year Transactions with owners in their capacity as owners: Share based payments Transfer from share based payments on issue of shares under Long Term Incentive Plan Issue of shares on vesting of options under Long Term Incentive Plan Dividends provided for or paid Balance at 31 December 2011	Contributed Equity Reserves Retained Earnings Total $'000 $'000 $'000 $'000 74,984 (708) 131,352 205,628 - - 24,474 24,474 - (1,816) - (1,816)
	- (1,816) 24,474 22,658
	- 1,650 - 1,650 1,389 (1,389) - - - - (12,396) (12,396)
	76,373 (2,263) 143,430 217,540
	76,645 (402) 156,933 233,176 - - 27,511 27,511 - (1,487) - (1,487)
	- (1,487) 27,511 26,024
	- 1,500 - 1,500 2,989 (2,989) - - 2,010 - - 2,010 - - (15,282) (15,282)
	81,644 (3,378) 169,162 247,428

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

7

FlexiGroup Limited Consolidated statement of cash flows For the half-year ended 31 December 2011

Cash flows from operating activities Net interest received Other portfolio income Payment to suppliers and employees Borrowing costs Taxation (paid)/refunded Net cash inflow from operating activities Cash flows from investing activities Payments for purchase of software and plant and equipment Net (increase)/decrease in: Customer loans Receivables due from customers Net cash outflow from investing activities Cash flows from financing activities Dividends paid Proceeds from issue of shares on vesting of options Repayment of vendor note on Certegy acquisition Increase/(decrease) in: Borrowings Loss reserves Net cash inflow/(outflow) from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of the half-year	Half-year 2011 Half-year 2010 $'000 $'000 66,739 62,312 47,533 45,509 (35,946) (47,845) (29,234) (26,095) (9,423) 18,732
	39,669 52,613
	(4,182) (4,131) (48,700) (37,851) (44,274) (14,845)
	(97,156) (56,827)
	(15,282) (12,396) 2,010 - (15,000) - 75,718 (13,836) 12,257 9,092
	59,703 (17,140)
	2,216 (21,354) 55,994 74,844 (84) (107)
	58,126 53,383

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

8

FlexiGroup Limited Notes to the consolidated financial statements 31 December 2011

Note 1 Basis of preparation of half-year report

This condensed consolidated financial report for the interim half-year reporting period ended 31 December 2011 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

This condensed consolidated interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2011 and any public announcements made by FlexiGroup Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

Significant accounting policies

The accounting policies applied by the Group in the condensed consolidated interim financial report are the same as those applied by the Group in its consolidated financial report as at and for the year ended 30 June 2011.

Presentation of cash flow statement

The classification of items between operating, investing and financing activities in the statement of cash flows has been restated from the prior period to better reflect the operations of the Group. Prior year comparative information has been restated to ensure consistency.

Note 2 Segment information

(a) Description of segments

Management has determined the operating segments based on the reports reviewed by the executive management committee that are used to make strategic decisions.

The committee considers the business from a product perspective and has identified two reportable segments; the core leasing business (consisting of Flexirent, Flexicommercial and Blink) and the interest-free loan business (Certegy).

(b) Segment information provided to the executive management committee

The segment information provided to the executive management committee for the reportable segments for the half-year ended 31 December 2011 is as follows:

Half-year 2011

Revenue from continuing operations Borrowing costs Borrowing costs - vendor note Impairment losses on loans and receivables Operating expenditure Amortisation of intangibles Profit before income tax Income tax expense Statutory profit for the half-year Amortisation of intangibles Cash Net Profit After Tax Total segment assets – 31 December 2011	Leases Interest-free Total loans 80,426 38,750 119,176 (18,777) (10,029) (28,806) - (427) (427) (6,649) (4,202) (10,851) (28,905) (10,149) (39,054) (126) (543) (669)
	25,969 13,400 39,369 (7,451) (4,408) (11,858)
	18,519 8,992 27,511 126 543 669
	18,645 9,535 28,180
	616,922 374,907 991,829

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FlexiGroup Limited Notes to the consolidated financial statements 31 December 2011

Note 2 Segment information (continued)

(b) Segment information provided to the executive management committee (continued)

Half-year 2010

Half-year 2010
Revenue from continuing operations Borrowing costs Borrowing costs - vendor note Impairment losses on loans and receivables Operating expenditure Amortisation of intangibles Profit before income tax Income tax expense Statutory profit for the half-year Amortisation of intangibles Cash Net Profit After Tax Total segment assets – 30 June 2011	Leases Interest-free Total loans 81,631 28,132 109,763 (16,883) (8,456) (25,339) - (756) (756) (7,185) (4,255) (11,440) (32,612) (6,155) (38,767) - (543) (543)
	24,951 7,967 32,918 (5,922) (2,522) (8,444)
	19,029 5,445 24,474 - 543 543
	19,029 5,988 25,017
	573,188 329,269 902,457

Note 3 Dividends

Ordinary shares Dividends provided for or paid during the half-year	Half-year ended 2011 Half-year ended 2010 $'000 $'000 15,282 12,396

On 8 February 2012 the Directors have recommended the payment of an interim dividend of 6.0 cents per fully paid ordinary share, fully franked based on tax paid at 30%. The interim dividend totalling $16,756,100 is expected to be paid on 18 April 2012 out of retained profits at 31 December 2011 and has not been recognised as a liability at the end of the half-year.

10

FlexiGroup Limited Notes to the consolidated financial statements 31 December 2011

Note 4 Equity securities issued

ote 4 Equity securities issued
	2011		2010
	No. of		No. of
	Shares	$’000	Shares	$’000
	(‘000)		(‘000)
Movement in ordinary shares during
the half-year
Balance at the beginning of the half-
year	264,380	76,645	259,871	74,984
Issue of ordinary shares during the
half-year
14 September 2010- Issue of shares to
executives under FlexiGroup Long
Term Incentive Plan	-	-	4,084	1,389
6 September 2011 – Issue of shares to
executives under FlexiGroup Long Term Incentive Plan	1,570	428	-	-
7 September 2011- Issue of shares to
employees from treasury shares	9,810	1,830	-	-
7 December 2011 - Issue of shares to
employees from treasury shares	55	17	-	-
7 December 2011 – Issue of shares to
executives under FlexiGroup Long Term Incentive Plan	1,406	2,724	-	-
Balance at end of half-year	277,221	81,644	263,955	76,373
Movement in treasury shares during
the half-year
Balance at the beginning of the half- year	11,912	5,268	10,948	3,564
7 September 2011 - Transfer of shares to ordinary shares	(9,810)	(1,830)	570	872
7 December 2011 - Transfer of shares to ordinary shares	(55)	(17)	-	-
Balance at end of half-year	2,047	3,421	11,518	4,436

Note 5 Contingencies

There are no material contingent liabilities at the date of this report.

Note 6 Events occurring after balance sheet date

No significant events have occurred since the balance sheet date.

11

FlexiGroup Limited Directors’ declaration 31 December 2011

In the directors’ opinion:

• a) the financial statements and notes set out on pages 4 to 11 are in accordance with the Corporations Act 2001 , including:

• (i) complying w ith Accounting Standards, the Corporations Reg u lations 2001 and other mandatory professional reporting requirements; a n d

• (ii) giving a tru e and fair view of the consolidated entity’s financi a l position as at 31 Decemb e r 2011 and of its performance for the half-year ended on that date; and

• b) there are reasonable gr o unds to believe that FlexiGroup Limited will be a b le to pay its debts as and when they become due and payable.

This declaration is made in a ccordance with a resolution of the directors.

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Margaret Jackson Chairman

Sydney 8 February 2012

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Independent auditor’s review report to the members of FlexiGroup Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of FlexiGroup Limited, which comprises the balance sheet as at 31 December 2011, and the income statement, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, selected explanatory notes and the directors’ declaration for the FlexiGroup Limited Group (the consolidated entity). The consolidated entity comprises both FlexiGroup Limited (the company) and the entities it controlled during that half-year.

Directors’ responsibility for the half-year financial report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 and for such control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2011 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of FlexiGroup Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

PricewaterhouseCoopers, ABN 52 780 433 757

Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 T +61 2 8266 0000, F +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

13

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Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of FlexiGroup Limited is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

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PricewaterhouseCoopers

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Victor Clarke Partner

Sydney 8 February 2012

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