Humm Group Limited (HUM) Earnings Call Transcript & Summary

Good morning. Thank you for joining us for our full year '20 results presentation. My name is Rebecca James, Chief Executive Officer of flexigroup. And I'm joined today by our new Chief Financial Officer, Jason Murray. We're excited about what we've got to share with you today. Before we take you through our financial performance, we'll start with an update on our strategy and the rebrand of the business. And we'll then provide details on our capital raise, which will deliver balance sheet flexibility and enable profitable and sustainable growth. We will, as always, allow for your questions at the end of the presentation. In February 2019, the company outlined a new strategy designed to transform flexigroup and ensure it maintains and grows its market share. We promised, and on Slide 4 you'll see that we have delivered. Our execution against this strategy has produced significant benefits to the business over FY '20. We've experienced double-digit volume growth across our simplified lines of business. We grew our retail partners by 37% in FY -- our retail customers, sorry, by 37% in FY '20 with 570,000 new customers and 5,000 new retailers. We've seen a significant increase in engagement with customers, who use us 9 times a year on average. And we've had over 600,000 app downloads. Our focus on our online buy now pay later offering has resulted in strong e-commerce growth, increasing by 127% year-on-year. We've also reduced costs from the business by over $10 million on an annualized basis. And we've launched bundll, our buy anywhere pay later product and debit card disruptor. With the successful execution of these foundational elements, we are now primed for sustainable and profitable growth. On Slide 5, you'll see that today we are announcing the unifying and rebranding of flexigroup to our most recognized brand as the final step in our simplification journey and equity raising to provide balance sheet flexibility and enable profitable and sustainable growth and a strategic review of our high-performing FlexiCommercial division to unlock its full potential. These actions will place the company in the strongest and most unified shape it has ever been in, ready to capitalize and ramp our strategy from a position of strength. On Slide 6. It is with great pleasure that -- today that we're announcing that both the flexigroup brand and our flagship consumer brands will now be united under one name, humm. Today marks a further simplification milestone to unify the proposition of interest-free installment payments for consumers and SMEs. We have a clear and differentiated proposition: interest-free buying power for everything, everywhere and for everybody. 1 year in, and humm has firmly secured its leadership position in buy now pay later transactions over $1,000. Our aim under one unified brand is to lead a new frontier by pushing into new empowering and evolving solutions that will drive the way customers live, shop and budget. That's why flexigroup and its flagship products will be rebranded and brought under our most recognized and loved brand, humm. The unified humm ecosystem is empowered by a common credit and insights engine enabling us to continually and -- enhance and adapt our platform. I'd now like to take a moment to touch on the scale and size of humm. We are the third largest buy now pay later player in the Australian market with 17.5% market share. Our retail presence in Australia, New Zealand and Ireland across buy now pay later and interest-free finance reaches 2.1 million customers, 56,700 retail partners. And in FY '20, we processed over $2.1 billion in transactions. We're also excited about the transformation of our offering in Ireland, which has gone from a leasing business to buy now pay later in a very short span of time. We have more than doubled our customers in FY '20 while also generating strong growth in retail partners and volumes. In addition, with many of our retail partners in Ireland also operating in the U.K., this provides a strong optionality for further expansion. Now to Slide 10. Rebranded as humm, we now have a single platform serving everybody, from Gen Z and millennial spenders through to young families and SMEs. humm finances everything, from life's little luxuries through to significant purchases. Leveraging the strength of the humm brand, you'll see on this slide our rebranded consumer-facing products. Given the strong brand awareness and affinity with our customers, bundll will remain as bundll, powered by humm. bundll targets the millennials, Gen Z, the balancers; and we have a product update later in the presentation. We have humm, the original buy now pay later product that allows young families to live interest free forever. The strength of this brand is demonstrated by its strong performance in its first full year as a stand-alone brand. Next, we have humm90, our rebranded revolving credit business that targets young families; and high earners not rich yet, otherwise known as HENRYs. humm90 enables 90 days of interest-free shopping in every purchase and up to 60 months interest-free shopping at partner retailers. These consumer-facing products combined generated $2.1 billion in volumes in FY '20, and we've only just begun to make inroads into the $450 billion addressable market. Finally, we have our new product humm pro, previously named [ wired ]. Due to launch this financial year, humm pro is a buy now pay later product designed to meet the needs of small to medium business owners. We now have simple, market-leading products harnessed by the one recognizable brand. You'll see on Slide 11 that the rationale for the rebrand is clear. It will create a seamless checkout experience under one brand, serving the best product solution to suit both the retailer and end customer. It will boost in brand awareness, aligning to a central brand that resonates with customers and retailers and reducing our costs of sale. There'll also be strong revenue benefits from cross-promoting all products to all retailers and customers via a unified app and seller portal. And it will simplify our story to customers, retailers; and clarify our significant market position. It will deliver one strong, clear and simple proposition to our customers and partners across Australia, New Zealand and Ireland. On Slide 12, you can see how humm provides payment solutions across the entire shopping journey. From bundll through to humm90, we cover purchases from $1 all the way through to $50,000. This broader spending range allows us to capture a larger market than monoline players while also offering our customers multiple touch points to use our products, driving stickiness and repeat usage. With the wider range and the ability to fund day-to-day spend through to life's larger purchases, we're a one-stop shop for flexible payment solutions both online and in store. Turning to Slide 13. You can see that humm has experienced strong growth across Australia, New Zealand and Ireland as a result of our new strategy. The number of transactions has more than tripled from 225,000 (sic) [ 255,000 ] in FY '18 to 756,000 in FY '20. We've also been aggressively onboarding a wide range of leading merchants to our platform, almost doubling the number of merchants offering humm since FY '18. Finally, our volumes have continued to grow as we've expanded with humm, now delivering $775 million in volume in FY '20 alone. We've also continued to offer more ways for our customers to use humm in their day-to-day lives to drive repeat use and stickiness. humm can now be used to pay a range of bills that offer BPAY, helping Australians manage their finances during a time when budgeting and flexible repayments are increasingly in demand. This will enable customers to pay for services such as electricity, gas, telecommunications and school fees; and repay them in budget-friendly interest-free installments at these pillars. On Slide 14, you'll see an update on bundll, powered by humm. As consumers continued to adopt buy now pay later into their everyday spend, we launched our new differentiated proposition bundll which allows consumers to buy anywhere and pay later. Aimed at disrupting the debit card market, the product has positive momentum, with customers gravitating towards its in-built budgeting tools which help support financial wellness. Using the Mastercard network, bundll customers can shop wherever they like online and in store, interest free, with no minimum spend. We are currently seeing 1,500 customers joining the platform each week. And most importantly, our customers are using the product and using it repeatedly, with the top 30% of our customers transacting 11 times per month. This is a combination of online and in store, with 31% of our transactions being made online. And overall, bundll has been used with over 76,000 unique merchants, which is a testament to its buy-anywhere power. Slide 15 shows the progress we have made in enhancing our customer experience with new technology and features. We have significantly invested in our digital offering, and this is reflected in the strong performance of our apps. humm is the #7 finance app on the Apple App Store, with close to 12,000 user ratings and a score of 4.7 out of 5. And across the entire humm ecosystem, we've had over 600,000 downloads in less than 18 months. Turning to Slide 16, I want to take a moment to reflect on our market size and our position compared to other buy now pay later providers in the market. In just over a year, humm has become an industry heavyweight. It has 2.1 million customers, 56,700 active merchants and a transaction volume of $2.1 billion. Across every metric, we have a significant market position that we can leverage for continued growth. And unlike our peers, we've always been profitable, and we plan to continue to be as we scale. humm resonates with retail partners. Home and home improvement, a vertical where we have a long-established history, makes up 40% of our volume in the last 12 months. We've diversified into health and automotive areas where other buy now pay later providers struggle to penetrate given their spending limits. The work we've undertaken to simplify and speed up merchant integration, with online retailers now up and humming in 48 hours, is driving the strong growth in retail. With a growing and well-diversified merchant base across multiple verticals and a growing awareness of humm in the market, we are delighted to see our strategy of offering solutions for big and small purchases continuing to deliver. On Slide 18, you'll see that our continued growth is enabled by a common credit and insights engine. We have automated credit decisions by optimizing our models to reduce referral rates. We've created a bespoke BNPL serviceability model, which drives continued improvement in losses. We've enhanced the registration process for humm with photo ID scan to protect against fraud, a first in the BNPL space. And we've put in place one enhanced and optimized collection system for all products, reducing losses. What's particularly reassuring is that, despite the economic headwinds experienced this year for both the business and our customers, we have continued to manage the portfolio in a prudent way. Now turning to the equity raising on Slide 19. With our business focused on one brand and one ambition, we are confident that now is the time to capitalize and ramp our strategy under humm. Proceeds will be used to take advantage of the opportunities from the further simplification of our business. Put simply, we'll be using the funds to support areas where we have demonstrated we have a strong track record in delivering against our promises. We're going to put firepower behind our strongest brand, providing balance sheet strengths to underpin funding of a sustainable growth outlook. We're going to invest in our strongest products with enhancements to the customer experience to drive repeat and continued usage, and we're going to expand business partnerships and alliances. Importantly, the equity raise creates balance sheet flexibility and 0 pro forma corporate debt. Jason will talk in more detail about the specifics of their raise -- of the raise later in the presentation, but you can see a high-level summary on the right of the slide. Slide 20 provides humm benefits from a diverse business model with a product suite that spans buy now pay later, revolving credit and SME finance, which is a significant strength in a challenging economic environment. Following a peak experienced in April 2020, the number of customers now seeking hardship relief has returned to pre-COVID levels, and over 50% of customers who entered financial hardship as a result of COVID-19 have now resumed normal payment arrangements. And you can also see with the graphs on the right of the slide July 30-plus arrears are now broadly in-line or improved versus the same period last year. And we have July 2020 buy now pay later 90-day-plus arrears sitting at 0.53%. This represents a 10% basis point improvement over last year. As part of the rebound and further simplification of the business, we are also announcing today the creation of a stand-alone division for our high-performing commercial and leasing business. The business provides equipment finance via operating and finance leases and chattel mortgages across Australia and New Zealand. The business is well established and scalable, with FY '20 volumes increasing by 15% in FY '20. The business has strong distribution firepower across a number of different partners, including brokers, equipment and technology suppliers as well as educational institutions. What has been encouraging is that we've grown volume in FY '20. Our credit quality has also improved. This is reflected in the Equifax credit score for originations. And we are building a strong reputation in the market for being a quick and responsive lender to SMEs. We look forward to delivering an update on the business following the strategic review. I'd now like to hand over to Jason, who will go into more detail on our financial performance for the period.

Thanks, Rebecca. Turning to the FY '20 group financials and some of the highlights. Highlights. Our cash NPAT was $29.2 million after a COVID-19 macro overlay provision of $30.9 million post tax. We have 2.3 million active customers, an increase of 30% on prior period; and 73,000 retail and commercial distribution partners, up 13% year-on-year. Transaction volume was $2.5 billion on continuing products, an increase of 17% year-on-year. Continuing products excludes Consumer Leasing and the Once and Lombard cards portfolios, which are now all in runoff. Despite the macroeconomic environment, our group arrears past 30 days actually improved year-on-year by 20 basis points to 3.3%. And across our interest-free products, our customers are now transacting more than 9 times a year. Turning to cash NPAT on Page 24. Underlying cash NPAT for the full year was $60.1 million before the COVID-19 macro overlay provision of $30.9 million post tax. After this provision, cash NPAT was $29.2 million. This forward-looking COVID-19 macro overlay provision impacted the cash NPAT of all of our businesses as at the year-end, as we sought to adopt a cautious approach to loss provisioning on a forward-looking basis, noting that historic arrears and net loss performance actually held up well or improved over the year. The difference between profit after income tax on a statutory basis and cash NPAT was made up of amortization of acquired intangible assets; impairment of other intangible assets, mostly capitalized software; and redundancy and restructure costs in relation to the simplification of the business in the second half. The reduction in the number and size of these adjustments to statutory NPAT is reflective of the simplification of our business over the last couple of years. Despite challenging market conditions, our result was solid in what was a transformational year for the company. We delivered significant simplification of our products and fees. We completed a substantial whole-of-business restructuring in the second half to drive operational efficiencies, and our legacy products continue to run-off. Despite the impact of COVID-19 in the second half, average net receivables still increased 5% year-on-year, resulting in higher net interest income. At the same time, we saw a decrease in interest expense primarily due to lower funding costs in a lower rate environment. Offsetting this, the decline in other portfolio income was driven by the simpler fee structure in humm versus legacy products to better position our products competitively in the market; by lower end-of-term and other fee income in the commercial business; and by higher direct sales costs, essentially credit bureau costs, reflecting growth in customer applications. FY '20 operating and other expenses were broadly similar to the prior year with an increase in expenditure on advertising and marketing, offset by the initial impact of cost savings in excess of $10 million annualized across employment expenses, process optimization and renegotiation of supplier arrangements. With regards to dividends, the Board has decided not to pay a final FY '20 dividend given the current economic climate and the announced equity raise. Decisions on future dividends will be made depending on future macroeconomic conditions and capital required to support profitable and sustainable growth, and we'll provide a further update on dividends at the first half 2021 results announcement. The deferred first half 2020 dividend will be paid in October, as previously flagged. Just covering off on some of the key metrics. Volume was down 3% year-on-year, although not at the expense of average net receivables which were up 5% as stated earlier. Our cost-to-income ratio was significantly lower in half 2 at around 44%, bringing the FY '20 cost-to-income ratio to 49%, closer in line with the prior year and on track to reduce further by FY '22. Giving earnings were impacted by macroeconomic events, the numerators of both EPS and ROE were down, which resulted in the lower numbers that you can see. I'll now take you through the segment analysis, buy now pay later on Slide 25. BNPL underlying cash NPAT for the year was $11.1 million before the COVID-19 macro overlay provision. After the provision, cash NPAT was $5.7 million. Volume was up 18% across all geographies with continued merchant onboarding and penetration of key verticals in Australia and strong growth in our New Zealand and Ireland businesses. Pleasingly, online volumes in Australia increased 172% over the year and 262% half-on-half. Interest income was up $4.6 million, with growth offset by a changing portfolio mix. Other portfolio income reduced $10.2 million with fee income down $4.5 million largely as a result of simplifying fees in humm, $1.8 million of direct costs in line with growing volumes; and the balance is a result of FX gains in FY '19. Additionally, operating expenses were up $8.1 million, largely driven by investment in marketing, in our products and the operational build-out to streamline the customer experience going forward. FY '20 has been a transformational year for the company, establishing brand presence, expanding into different channels and verticals and enhancing product features. Moving on to our credit card businesses on Slide 26. AU Cards cash NPAT before the COVID-19 macro overlay provision was $12.1 million, up 41% year-on-year. Cash NPAT after the macro overlay provision was $1.5 million. Volume on continuing products was up 45%. Net income was up 6%, as the portfolio continues to mature and a higher proportion becomes interest bearing. The number of transactions was up 239%, and interest-bearing receivables for Skye were up 183% on the prior year. With the upgrade of collection systems and processes, net losses for AU Cards reduced 9% on the prior year. Moving to New Zealand Cards. Cash NPAT before the COVID-19 macro overlay provision was $25.4 million, and $19.8 million after the provision. Volumes were up marginally and ahead of system, particularly in the last quarter. Net income was up 12% on both higher average net receivables and improved margins. Net losses were up but off a very low base, reflecting a long-established and mature portfolio moving closer to market peers. Operating expenses reduced significantly in the second half, reflecting strong cost management initiatives. We also saw a positive shift to interest-bearing receivables, which were up 13% on a local currency basis. Moving to Commercial and Leasing. Rebecca has provided some additional information as part of the announced strategic review, so I'll focus just on the FY '20 results. Cash NPAT before the COVID-19 macro overlay provision was $11.5 million. After the provision, it was $2.2 million. Volume on the core Commercial business was up 15%, offset by a reduction in the discontinued Consumer Leasing book. Net income declined 23% due to the Consumer Leasing runoff as well as lower margins and secondary income due to changing business mix. A renewed strategic focus towards SME lending through strong distribution channels has led to tighter credit criteria and an increase in credit quality in FY '20 as measured by the Equifax corporate credit score. Operating expenses decreased by 22% from simplification of the Australian Commercial business and reduced costs from the cessation of Consumer Leasing. An increase in receivables of 11% reflects the continued strong growth in Australia Commercial despite the runoff in Consumer Leasing. Moving on to credit management on Slide 28. Group net losses-to-average net receivables or ANR received -- reduced 10 basis points year-on-year to 4.1%. On a segment basis, buy now pay later was impacted by March quarter seasonality persisting longer than usual due to COVID-19, although net loss performance has subsequently returned to trend from June 2020 onwards and into the start of FY '21. AU Cards net losses were down as a result of additional customer data points now used to assess credit quality. New Zealand Cards saw net losses move closer in line with market peers, reflective of a growing and maturing portfolio. In Commercial, net losses were down, reflecting as previously mentioned a higher-quality book and also from reduced impairment losses in the Consumer Leasing book due to run-off and more active arrears management. In terms of hardship, of all consumer and SME finance customers that went into hardship due to COVID-19, more than half have now resumed normal payment arrangements. Turning to Slide 29. In terms of capital management, the company responded really quickly to the impact of COVID-19, extending our facilities at both the warehouse and the corporate debt level. Turning to wholesale funding. With regards to our wholesale funding facilities, we've remained consistently well supported by our key banking partners, with 5 of our facilities extended since 1 January 2020. That's just under $3 billion of committed facilities with $648 million of undrawn headroom. We're a long-established issue (sic) [ issuer ] in the Australian securitization market as well as being a regular issuer under the Q master trust securitization program in New Zealand, both of which give us good access to term markets. We also recently received delegate approval from the AOFM through the Structured Finance Support Fund for up to $114 million of investment into our Australian wholesale funding facilities. Turning to our corporate debt facilities. We have significant headroom of $130 million across our corporate debt facilities, which provide a substantial liquidity buffer over and above our warehouse and securitization funding. As the chart shows, we've progressively reduced drawn corporate debt over the last 5 years, with net gearing at 29% as at June 2020, down 7 percentage points year-on-year. None of our facilities are due for renewal until at least December 2021. We intend to target a continued reduction in net gearing, and post the equity raise, we will have 0 pro forma net debt. Now turning to execution and next steps, and we'll go straight through to Slide 33. As part of the rebrand and further simplification of the business, we are focusing on our core product suite with a single seamless checkout experience, rebranding to our most loved brand humm and simplifying our business around a unifying value proposition of interest-free installment payments. We're raising equity to invest in our strongest products to drive sustainable and profitable growth and to leverage and expand our partnerships and network. The raise also creates additional balance sheet flexibility and results in 0 pro forma corporate debt gearing. At the same time, we are announcing a strategic review of Commercial with the creation of a separate division for this high-performing business to enable us to unlock its full potential. Just running through the terms of the equity on Page 34. We're undertaking a 1 for 3.2 pro rata accelerated non renounceable entitlement offer with total offer size of $140 million, comprising a fully underwritten institutional offer and a 50% underwritten retail offer. The total estimated underwritten amount is $115 million. The offer's structure enables all of our shareholders to participate, including our 2 largest strategic shareholders; and provides funding certainty for our growth outlook whilst minimizing potential shareholder dilution. Under the institutional offer, our Chairman and Founder, Andrew Abercrombie, will subscribe for $7.5 million worth of entitlements, equal to 23% of his total pro rata entitlement. And John Wylie, one of our directors; and the associated entities at Tanarra Capital will subscribe for 100% of their pro rata entitlement. At this stage, just taking into account the underwritten portion of the offer and associated fees and expenses, our pro forma cash as at 30 2020 -- 30 June 2020 would be $126 million, and net drawn corporate debt would be 0. Turning to Slide 35, I don't intend to run through the entitlement offer in detail, but of course, we'd be happy to answer any questions. And investors should also talk directly to the underwriters about timing and process to participate. Turning to Page 36. Here is the equity raising timetable. And again I won't run through it in detail, other than to say, on the institutional side, please speak to our underwriters. And for our retail shareholders, the entitlement offer will open next Wednesday, the 2nd of September, closing at 5:00 p.m. on Tuesday, the 15th of September. Back to you, Rebecca.

Thanks, Jason. I'd like to bring an end to our full year presentation. In summary: We have a simplified business. We have a single-minded focus on interest-free payments for consumers and SMEs. We have a unified disposition under our most loved brand, humm, and we are now primed for sustainable and profitable growth. Thank you for support. I'd now like to take questions.

[Operator Instructions] Your first question comes from Apoorv Sehgal with UBS.

[ I think, just to make sure ]: You can hear me.

Yes, we can.

Okay, great. Just first question, in terms of the profit implications of the raise and how you invest the money, how should we think of the volume growth outlook of flexigroup now? I mean you did double-digit growth in FY '20. Do you think you can sustain that sort of volume growth for the next sort of 2, 3, 4 years? But how does that trade-off work against your ability to actually grow profits given that presumably you'll be investing a lot of money into brand building and marketing?

Thanks, Apoorv. Look, I don't think we're making a statement about that today. And obviously associated with the results is also an equity raise but needless to say that we've been clear about the use of proceeds. The additional benefit of that is the balance sheet flexibility it gives us in what are fairly uncertain circumstances over the next 6, 9 -- 6 to 9 months as government stimulus ends. And then we can make decisions with regards to the investment timing and impact that, that will have once we've got a better handle on what the next 6 to 9 months looks like.

Sure. And can you also talk through the outlook for cost-out? So previously, you had a target for OpEx to decline. I think it was over 15% in FY '21, cost-to-income ratio less than 40% by FY '22. Just I wanted to check if those targets are still in place or it's been pushed out because you're -- you might be investing a bit more into the brand.

No. We're still focused very much on cost-out in the business. We believe that there's more opportunities to come for us, particularly across the next 12 months.

Okay, okay. Maybe one final question, if I can, please, just on the Commercial Leasing business. So that's been growing quite well and probably benefiting from the current economic environment. Is the rationale for the review simply because you'd rather be a core buy now pay later company, and therefore commercial therefore sort of might be considered noncore? Or do you think that business is now relatively mature and the outlook isn't as strong as it might be for the buy now pay later business?

The growth that we've had and really the transformation of that business, particularly in the last 12 months, is a real testament to the management team in that business. This is an incredibly strong business and a testament not only to the growth that we've been able to achieve, particularly in Australia which grew by about 25% over the last 12 months, but also the improving credit profile that we've undertaken within that business. What's key to us is really that we're not realizing the true value of that business within the group, and so this strategic review is to really look at every opportunity to ensure that it will -- unlocking its full potential.

[Operator Instructions] The next question comes from Paul Buys with Crédit Suisse.

Just a quick one from me just regarding the macro overlay provision, I guess, just trying to work out any sort of color as to how to think of provisioning levels going forward. Obviously this was raised with a forward-looking view. And you've spoken about, I guess, the progression from kind of peak-crisis hardship requests, et cetera to where we stand now. I mean, is it fair to interpret from that, that you'd be kind of looking at peak provisioning within this period? How -- what's the best way to think about that going forward?

Yes. Look, it's a good question, Paul. And as we sort of drew together the accounts for June 30 and you think about some of the assumptions that we were working with the auditors and the like, clearly this is a forward driven -- a forward-looking, model-driven provision based on macroeconomics and sort of predictions of where unemployment would go. Then we saw sort of the government stimulus extended into March. It's counterintuitive, particularly as we look at our July numbers, July [ '21 ] numbers, in terms of arrears and losses, which we're seeing a drop. So really what we're saying is this is just an extremely cautious and prudent provision to ensure that the balance sheet is in good shape for the FY '21 year as we go into March next year, when government stimulus will likely end; and this halo effect that I think a lot of the finance sector is in at the moment with increased paydowns as a result of government stimulus, mortgage deferrals, super withdrawal. So we're comfortable with the level of our provision in terms of the modeling that we've done on what projected unemployment and macroeconomic impacts of COVID-19 could be, but it's not reflective of the arrears, losses and impairments that we're actually seeing which are coming down. And that kind of that's -- there's a degree of complexity to that and so we're just watching that on a month-by-month basis.

Understood. And then in terms of AOFM support from a funding side, do you anticipate -- I guess, how do you anticipate, if at all, using that support level on the funding side?

Yes. Look, it's a good question. And we, hopefully, have displayed in the materials that we've provided that, whether at a warehouse and wholesale facility level or corporate level, we've got a significant amount of liquidity at our disposal. We took the opportunity to engage with the AOFM like a number of other companies did. And for those that have a high degree of mezzanine investors in their facilities and term debt, the AOFM was there to provide support were that market, any of the capital markets, to sort of come awry during these -- this climate. We see it as a sort of a backstop for a variety of reasons; if, for example, the equity contribution required by warehouse facility providers or senior investors in term debt would require a greater contribution from us. So it's there simply as a backstop in uncertain markets. And I think our corporate structure, our capital structure, has proved extremely resilient to date with regard to COVID-19. Obviously the addition of the equity raise will put us in an even stronger position as we come out of the end of this macroeconomic climate in the next 12 months.

And then just last one from me just on bundll. You obviously gave an update there in terms of some progression on the customer side, et cetera. I guess keen just to get a bit kind of color on, I suppose, your own scorecard in terms of how the app has performed technically and otherwise in terms of customer feedback or versus your own expectations and how you've tracked versus your own timetable, obviously appreciating that it's been launched in a pretty tough environment. Just keen to get a bit more color on how it's gone in that regard.

Thanks, Paul. In terms of the outperformance, if we look at app store ratings, it's 4.6 stars. We've got it listed in the shopping category, last time I looked. It was performing really strongly on that league table, as well ahead of some of our competitors, so we're really pleased with the performance. We have, since launching, also introduced a number of new features and that the customers are really gravitating towards in terms of snoozes and super bundles. The marketplace, which is enabling customers to shop from directly within the app, is performing really well as well, so we're really pleased with how it's going.

And Rebecca, you gave some -- did you give the actual customer numbers using bundll [ yet ]? I know you gave some growth rates, so I might have missed it earlier in the presentation.

No. So in terms of the consumer business, we're consolidating our customer growth across all 3 products. And that's what we will do moving forward as well.

Your next question comes from Shane Bannan with Bligh Capital.

I guess I was a little bit surprised just with respect to the impairments charges you booked in the year just gone. I mean a lot of industries hit the wall through the course of the Q4 of FY '20, particularly hospitality and these sorts of things. And I'm aware of one of your competitors that's found about 30% of their book is going to default or deferral or whatever the case may be. Could I just get a little bit more of a narrative around what your experience has been with respect to the historical situation? And then even, if you could, flesh out a little bit more around the forward-looking picture that you can -- that's given rise to this incremental macro provision overlay.

Sure. So it varied across the board. Our net losses-to-average net receivables on the Commercial and Leasing side was down quite substantially from 4.2% to 2.5%. AU Cards was down from 5% to 4.5%. We saw a marginal increase in New Zealand Cards. And the group net losses were actually down 10 basis points from 4.2% to 4.1%. In buy now pay later, there was an impact of the March quarter seasonality, the sort of the Christmas spend, if you like. And that was exacerbated slightly by COVID-19, but as we come into the end of June 30 and certainly into the numbers that we're looking at for July 2021, we're seeing a significant drop in impairments and losses, and we expect that to continue. So that's sort of historic. I've covered off a little bit on the COVID-19 provision, but I'll just repeat what I mentioned earlier, which is that's very much model-driven. That's forecasting projected impacts on unemployment and the macroeconomic environment. We're kind of, along with the rest of the market, sort of trying to put a bit of science behind where we think things will go. And clearly it's appropriate to err on the side of caution when we do that. And that macroeconomic provision has impacted all of our business. The model is impacted slightly differently according to the underlying portfolios, depending on the degree of maturity, the growth rates and all that sort of thing. And you can see that with the breakdown of the COVID overlays in each of the segments.

Can I just touch specifically on the commercial and SME leasing side? I mean whole industries have been shut down as a result of what took place through the June quarter. And I would have thought the impact there would have been far greater, like hospitality, for example. People wouldn't have had [ any ] income to meet the commitments. I'm just trying to understand why we're not seeing more of that sort of impact through your business.

I think it's down to the breakdown of assets which we finance. And so we're not overly exposed to hospitality per se from an industry breakdown perspective. And also, together in Commercial, we have already seen over 50% of customers resume regular repayment arrangements. And it also broadly speaks to the improving credit profile that we've written over the last 12 months in that business [ too ].

Thank you. There are no further questions at this time. I'll now hand back to Rebecca for closing remarks.

That finalizes our full year results presentation today. Thank you for your support.