Humm Group Ltd

HUM: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$8.15	Fklgt	Styvznkym

FlexiGroup’s Business Transformation Dominates 1H20, FVE Unchanged with High Earnings Uncertainty

Feb 25, 2020

Our fair value estimate for no-moat Flexigroup remains at AUD 1.90 per share, with company reporting in line first-half fiscal 2020 underlying net profit after tax, or UNPAT, of AUD 34.5 million. Our longer-term view of the company hasn’t changed. We continue to expect the company to suffer subdued earnings in fiscal 2020 and 2021 as it exits nonperforming products, spends more on marketing new brands, and simplifies its operating systems. But we believe the company will benefit from these investments from fiscal 2022, which drives our five-year forecast 6% CAGR in UNPAT from fiscal 2019.

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