Our opinion on the current state of FGL

Finbond (FGL) is a micro-lending and insurance operation which operates in South Africa and America. This company wants to expand in the US to the point where 70% to 80% of its income is derived from that country within 3 to 5 years. It already has 66% of its income coming from the US and believes that the US offers significant growth opportunities. Including South Africa, Finbond has a total of 694 branches. In its results for the six months to 31st August 2023 the company reported loans advanced up 23,2% and headline earnings per share (HEPS) up 72,4%. The company's net asset value (NAV) fell 2,6% to R1,13bn. The company said, "Sales volumes have continued to increase in both South Africa (“SA”) and North America and are ahead of the corresponding reporting period, and significantly ahead of pre-COVID and Illinois regulatory change volumes". Technically, the share was in a long-term a downward trend and has been drifting sideways since March 2022. A further problem is the volume traded, with only about R28 000 worth of shares changing hands each day on average. We believe that there are better options than this penny stock.