Fly Buys operator posts 3% profit growth in record year for redemptions
Loyalty New Zealand, which operates the Fly Buys loyalty programme used by 53 companies, reported a 3 percent increase in profit growth last year, a period in which it had record redemptions of loyalty points.
Profit was $1.66 million in the 12 months ended March 31, from $1.62 million a year earlier, according to the Wellington-based company's financial statements. Total revenue was little changed at $82.7 million.
Loyalty New Zealand, which began the Fly Buys programme in 1996, charges its participating partner companies for the points they issue to the 2.44 million Fly Buys members, and uses the bulk of the proceeds buying the rewards when points are redeemed. It has 1,767 rewards listed on its website, ranging from accommodation to 'useful things for the flat'.
In the latest year, rewards-based revenue amounted to $65.6 million and participant based revenue was $12.7 million, both little changed from 2012. Total costs to provide rewards to members fell to $66 million from $69 million and costs for services to participants climbed to $14 million from $11 million.
The retail value of rewards redeemed in the 2013 year was a record $80 million and the company said 2014 "is shaping up to be a record year for points collected and redeemed."
"The number of points we give away continues to increase each year, showing the impact of Fly Buys on New Zealand shoppers," interim chief executive Chris Lamers said in an emailed statement.
Loyalty New Zealand is owned by Z Energy, Bank of New Zealand, IAG New Zealand and the Foodstuffs supermarket cooperative.
Revenue has almost tripled in the last 13 years, from the $29.9 million received in to March 2000 year. It returns a net $1.62 for each $1 of points cost for its partners, according to return on investment figures for 2009 published on the company's website.
As well as Fly Buys, it offers analysis of consumer spending based on the raw data it generates, marketing, brand and campaign advice and management, and LAB360, a specialist data and direct marketing agency.
Commissions earned from third parties rose to $654,000 last year, from $449,000.