Loyalty NZ profit reaches record as kiwis chase Fly Buys points
Sept. 10 (BusinessDesk) - Loyalty New Zealand, which operates the Fly Buys loyalty programme used by companies including Air New Zealand, posted a 64 percent gain in annual profit to a record as more kiwis chased points offered by its vendors.
Profit climbed to $2.7 million in the 12 months ended March 31, from $1.66 million a year earlier, according to the Wellington-based company's annual report. Sales rose to about $82 million from $79 million.
Fly Buys can be earned at 52 businesses, with points redeemed for gifts or discounts. Members can swipe their cards at outlets such as New World supermarkets and businesses ranging from 2degrees to Avis, and Bank of New Zealand to Z Energy, generating consumer spending data than can power its LAB360 analytics service. Fly Buys members claimed $82 million of rewards in 2014, up from $80 million in 2013.
"The results for FY 2014 are again really strong. We have seen an increase in points issuance and redemptions, indicating increasing customer demand for our currency," chief executive Stephen England-Hall said in an emailed statement.
"The increase in profit reflects the strong growth in the Fly Buys programme, plus a solid performance from our data analytics and insights business," he said.
Loyalty New Zealand began the Fly Buys programme in 1996. It charges participating partner companies for the points they issue to Fly Buys members taking a margin after the cost of rewards is deducted. In the latest year it earned $69.3 million of rewards-based revenue and had reward costs of $67.4 million. In the previous year rewards costs outstripped revenue.
England-Hall said revenue growth was consistent with growth in issuances and redemptions. The company's focus now was on "winning the customer for our clients, so part of our future strategy is to invest in diverse channels, like mobile, to meet changing customer demands."
Commissions earned from third parties fell to $613,000 from $654,000 in the previous year.