you for standing by, and welcome to the Hund Group Limited Fiscal Year 2021 Results. All participants are in a listen only mode. There will be a presentation followed by a question and answer I would now like to turn the conference over to Ms. Rebecca James, CEO. Please go ahead.
Good morning. Thank you for joining us for our full year results presentation. My name is Rebecca James, CEO of Hum Group, and I'm joined today by our new CFO, Adrian Fisk. I'd like to start today by talking you through our group highlights for the half before discussing our plans to accelerate local and international growth. I'll then hand over to Adrian, who will walk you through our financials.
We will, as always, allow for your questions at the end of the presentation. At Hum Group, we're liberating people from a one size fits all approach to finance. We enable seamless approvals for purchases big, small or business related, empowering consumers to choose how they wish to pay with terms from 5 fortnights through to 5 years. Today, 2,700,000 customers entrust us to help them buy and pay over time. And we're just getting started.
In the second half of 'twenty one, we launched Hummin in the U. K. And will be live in Canada by the first half of this financial year. We've secured our first global partnership with Westpac New Zealand. These partnerships are being pursued around the globe.
As we grow internationally, we're putting significant firepower into our marketing efforts and product experience, actively shaping how people will buy in the future. Turning to Slide 5, you'll see the group highlights for the year. This year, Hum Group reported a cash NPAT of 68,400,000, up 121% on the prior year. During the period, we've added 450,000 new customers, up 20% on PCP, taking total group customers to over 2,700,000. We ended the period with $108,000,000 in unrestricted cash, up from $15,000,000 in June 2020.
Combined with our nil net corporate gearing, this gives us balance sheet flexibility. We now have a superior credit decision engine delivering a net loss to ANR of 3.5 percent in FY 2021, a direct result of continued investment in this area. And our buy now, pay later business is well and truly humming. Our BNPL segment volumes of over $1,000,000,000 is up 31% on PCP and reflects the strong performance of in Ireland, little things in Australia and the increasing contribution of our newer products Bundle and Pro. A standout performer in our results is our refocused commercial business as origination has successfully shifted to SME lending through the broker channel.
Volume for this segment of 5.50 million dollars sorry, $540,000,000 increased 56% on the previous year. The strong full year results reinforce our strategy designed to support and accelerate our long term growth. Turning to Slide 7, has 4 areas of focus that will support its short and long term growth. The significant work over the prior years has positioned us to put our firepower behind these growth initiatives and expand our customer numbers, merchant numbers, partners and addressable markets, both locally and abroad. We will go to market with our new products Bundle and Home Pro, which target new segments, new partnerships and new audiences to expand our reach drive customer engagement and transaction frequency, building our products that are loved and used every day expand our installment payment core by attracting new merchants and platforms in Australia and New Zealand through our differentiated product offering and expand into new markets internationally through a considered and differentiated strategy that will appeal to a broader range of retailers and customers than traditional BNPL players.
Turning to Slide 8, you will see that Hum Group now has an interest free installment product for every purchasing occasion that will drive the way our customers live, shop and budget. This slide also highlights the difference of each product and the types of purchases made. On the left hand side of the graph, Big Things is used approximately once a year for larger more specific transactions with our average transaction value in FY 2021 of just under $4,000 While we work hard at increasing this transaction frequency, the velocity will never match little things currently used 5 times per year, up from 3 on prior period with an average transaction value of $2.75 The increasing interactions keep top of mind when our customers finance larger ticket items. In addition, over 90% of LittleThings transactions in Australia were made by existing customers, highlighting the stickiness of this product construct. Rounding out the smallest and most frequent of transactions, we have bundle, which enables customers to buy everywhere, every day and is being used 97 times per year.
As a mobile product, customer acquisition costs are low and this is a great way to introduce customers to the broader Group product suite. We also have 90, our revolving credit product. In FY 2021, our 90 customers transacted 42 times, up from 30 on the prior period. For Humpro, we look forward to providing an update on customer behavior as the product continues to build scale. Across all these products, our customers transacted 19 times per year.
This distinction of each product across the purchasing spectrum also gives us confidence that our customers will benefit greatly from using more than 1 Hung group product. Currently, 18% of customers have made both a big and little transaction. In a quick 18 months, one quarter of our bundle customers also have a account. While the overlap in cards and is small at present, we believe that there is a big opportunity here given the 90 rebrand in November, which now allows us to more actively promote our combined product suite. We are confident that we can continue to increase our cross sell activity into the future.
We're seeing a structural shift in paying fixed term installments over revolving credit, which started in Australia and is now spreading across the world. And we're seeing technology banks and loyalty programs wanting to enter this space to capitalize on this trend, looking to proven buy now, pay later providers to drive customer engagement and retention. In FY 2021, Home Group was focused on finding new audiences through partnerships for our innovative products. We've entered into a number of strategic partnerships with major banks like Westpac in New Zealand, loyalty programs such as Velocity Frequent Flyer, retailers like Mitre 10 and Home Hardware and issuers like Mastercard to grow Hum Group's customer base and distribution reach. Excitingly, discussions will progress with a number of banks, loyalty programs and retailers both locally and globally.
We expect the partnership channel to be a significant contributor to customer numbers with a target of delivering 250,000 additional customers in FY 2022. On Slide 10, we continue to drive customer engagement by adding merchants to the network, which shows the strength of the product and our differentiated customer proposition. In the last 12 months, the company added over 9,000 new retailers taking our total to 82,000. Turning to Slide 11, this has translated into rapid growth for our buy now, pay later products, a key driver of expanding our installment payment call as the brand continues to gain traction and consumers use our products more regularly. We have presented the volumes on this page on a half year basis to show the longer term momentum in our BNPL segment across Big Things, Little Things and the combination of our new products Bundle and Home Pro.
In the portfolio, Big Things has been impacted by the various state lockdowns as a predominantly in store transaction. However, we continue to generate momentum across our key verticals, especially healthcare, and believe there is still room for strong organic growth in the portfolio, as evidenced by the volume increase of 26.1 percent in the Q4 of last year. Little Things has performed very strongly in recent periods, driven by the consumer shift to online shopping and the ability to grow our merchant network. Finally, Bundle and the recently launched HUM Pro. I want to point out here that the data is quarterly as Bundle only launched in February 2020.
However, we are really pleased with the products, the utility based on the positive online reviews and the frequency with which our consumers are using these products. On Slide 12 is HUM90, which has been reinvigorated and rebranded in November 2020. One of the core features of this product is the ability to offer fixed term installment payment plans through a feature we call the 90 wrap for any transaction over $2.50 or up to 60 months interest free at key retail partners. The businesses are both very profitable with interest bearing balances sitting around the 60% mark for both of our card segments. We continue to look at ways to activate spend among our customer base through brand crush discounts exclusive to the app and targeted life cycle marketing.
Turning over the page, Slide 13 summarizes the opportunity and our approach in Canada and the United Kingdom. We will be differentiated through offering bigger ticket longer term installment plans, an area that has traditionally been served by white label credit cards. With a number of these players retreating from the market and buy now, pay later offering a more flexible solution for both retailers and consumers, we are confident in gaining traction in these markets. In addition, like we have across all of our jurisdictions, we are focusing on target verticals through software partnerships and integration. We believe that this is a very cost effective way to scale quickly.
Slide 14 is an update on the progress and expected timings for major milestones in Canada and the U. K. The U. K. Already launched in FY 2021 with the Pay in 5 smaller ticket product.
We expect the next iteration of up to £3,000 to be in market by October, followed by big things of up to £20,000 in January 2022, subject to regulatory approval. We have already generated significant momentum signing over 300 retailers, including the Hut Group, which has 200 brands across 800 retail locations. In Canada, we are on track for a combined little and big things launch this half. Finally, we wanted to provide an idea of the level of investment required for our international expansion plans. We forecast a cash impact NPAT impact of between $12,000,000 to $14,000,000 this financial year as we continue to invest in platforms, marketing, people and credit performance.
We also expect volume of circa $150,000,000 which is subject to regulatory approvals in the approvals in the United Kingdom. Skipping over Slide 15 and turning to Slide 16, I'd now like to give an update following our strategic review of our commercial business. The Flexi Commercial strategic review has been completed with the recommendation to invest and grow the Flexi Commercial broker channel. This takes into consideration the successful refocusing of the business to SME lending, favorable market conditions and strong business momentum. We are pleased with the portfolio performance, including the securitization pricing achieved in March, which has allowed us to drive much greater capital efficiency, a key recommendation from the strategic review.
Flexi Commercial is focused on delivering commercial asset finance for the SME market. Our top three assets being transport, construction and light commercial vehicles. We've served over 4,300 customers in FY 2021 with an average deal size of $75,000 This makes us the 2nd largest NBFI commercial asset finance lender in Australia. Our market leading service is how we've stood out in the broker channel and has been underpinned by an investment in technology, which allows us to drive efficient decisions and differentiates us from traditional lenders. 45% of deals are decisioned on the same day and 35% of approved deals are now automated, making us quicker, nimbler and easier to work with than most traditional lenders.
On Slide 17, you'll see that this refocused business delivered operating income of $50,500,000 an increase of 51% on FY 2020. The continued growth in operating income has
come as we have successfully moved
to broker on originated SME lending. 4.50 following the ABS transaction of $450,000,000 in March 2021. To give you an idea, the initial capital deployed in respect of the March 2021 ABS transaction was 6.5%. We're also continuing to explore the introduction of mezzanine debt into the warehouse facility, which will lead to a further improvement in capital efficiency. I'd now like to hand over to Adrian to walk us through our FY 'twenty one group financials.
Thank you, Rebecca. I've been in the CFO role now for just over a month, and I joined as I'm passionate about the transformation of consumer and SME Finance. I'm attracted to HUM's culture of innovation, its credit and funding capabilities and its growth ambitions. I'm here today to outline the strong financial performance of HUM Group for the 2021 financial year, which has resulted in a cash NPAT of RMB68.4 million, up 121.1 percent. We reported gross income of RMB443.9 million for the year, down 73% on the prior period.
There are a number of component parts when evaluating our revenue. We have a number of high growth products where revenue is growing consistent with our strategy. We also have legacy products in runoff affecting our year on year revenue performance. There are also environmental factors driving revenue such as competition in the buy now, pay later sector. And COVID-nineteen continues to impact our cards portfolio, particularly travel.
I will go into all of these in more detail when we cover the segment performance. Net operating income of 342,900,000 was down 5% on the prior comparative period. Net operating income has benefited from lower interest costs from a strong and active balance sheet management. I consider our funding to be a strategic differentiator for our business. Impairment losses were down 59.5 percent, and I would like to point out that this performance included lower actual losses of 20,100,000.
This is a direct result of the hard work in improving processes and technology and credit decisioning across the whole portfolio in the last few years. In addition, we benefited from the release of 21,600,000 of the 43,300,000 COVID-nineteen overlay provision booked in FY 'twenty. I will discuss this specifically later. Our tax expense of 28,900,000 reflects a normalize of effective tax rate, noting that FY 'twenty had a number of 1 off adjustments. Combined, this led to a cash NPAT of 68,400,000.
Finally, on dividends. The Board has determined not to play a final dividend for FY 'twenty one. We are very confident in the strength of our balance sheet and consider this to be a strategic asset in this environment as we continue to invest. The combination of profitability and cash generation means that we are uniquely placed to balance growth and shareholder distributions in the future, and the board will continue to review this position. Turning now to buy now, pay later on the following slide.
FY 'twenty one was a year of investment of buy now, pay later, resulting in a cash NPAT of 1,200,000, up from 2,700,000 loss in the prior year. I would like to note that the Buy Now Pay Later numbers have been reinstated to include Bundle and Home Pro, which were previously reported FY 'twenty in the Cards and Commercial Leasing segments, respectively. We've provided a reconciliation in the pack that sets out these changes. We are pleased by the strong volume momentum generated in FY 'twenty one, which increased 31%. This has predominantly been driven by Island, Bundle and Little Things in Australia.
Gross income was up 120.6 sorry, gross income of 120,600,000 decreased slightly. Australia saw growth in little things and a growing combination from bundle. Gross income was also impacted by margin compression from competition across specific verticals in Buy Now Pay Later and reduced fees from older Sertigy contracts. At the net operating income level, interest expense decreased. Origination costs also grew as we continued to build momentum in the HUM network.
From a credit performance perspective, impairment losses were significantly lower by 34.3 percent with actual losses of 10,300,000 lower. Operating expenses increased by 4,300,000 and this is in line with increased activity from new products being developed and launched as well as the international expansion. For clarity, we have broken out the investments made across new products and in international expansion as this relates to Bundle and Home Pro. International expansion accounted for 5,800,000 cash NPAT drag for FY 'twenty one, and this relates to investment in people, marketing and systems. We are confident in the future growth of these innovative products, which has been validated by the blue chip partnerships signed in recent months.
New products take time to build sustainable revenues, and we will continue to make the necessary adjustments to drive growth and profits. Turning to the Card segments, which were profitable in FY 'twenty one despite adverse economic conditions. In Australia Cards, cash NPAT of 16,800,000 was up 121%. Volume of 417,000,000 was impacted by the ongoing effects of COVID-nineteen on merchant activity, specifically in the travel industry. Gross income of RMB91.1 million was down, largely a result of the pay down of the discontinued Lombard and Once products, which are in runoff.
This pay down also had a positive effect on profitability through the reduction in net loss. Importantly, our current product in market, HUM90, continues to perform well. With strong interest bearing balances broadly steady over FY 'twenty one. Impairment losses of 1,900,000 was down 94.4%, driven by a lower net loss of 9,100,000 as well as a partial release of the COVID-nineteen provision as a result of significant reduction in customer hardship. Looking at New Zealand Cards, this segment continues to be a strong performer in our portfolio.
Cash NPAT of RMB28.1 million was up 28.9 percent on FY 'twenty. Volume was down 7.4% due to the impact of COVID-nineteen on travel merchant activity in the long term interest free portfolio. Gross income of $135,400,000 was down because of lower volume and lower receivables. Net operating income of $107,300,000 was broadly flat as lower gross income was offset by a decrease in interest expense. Impairment losses of $19,400,000 was down 42.6%, and this was largely from the partial write back of the COVID-nineteen provision, which reflects the improving economic outlook.
On Commercial Leasing, I echo Beck's comments on our Commercial Leasing business that has continued to grow over FY 'twenty one. Our SME lending proposition has resonated with our broker network, and I'm excited about the future of this business. Cash NPAT of 22,300,000 was up 4 31%. Volume increased by 55.6 percent driven by strong origination growth in the Australian Commercial, providing commercial asset finance through the broker channel. While gross revenue was largely flat year on year, Australian Commercial increased 47% for the year.
However, it was offset by a discontinued and profitable consumer leasing portfolio in runoff. While volume continues to grow, we remain focused on our credit standards and using technology to improve decisioning. And this is reflected in the lower net loss of 3,100,000 and arrears in this segment. Operating expenses were down 3.1 percent, and again, this represents the lower cost from the consumer leasing book in runoff while increased activity in the Australian Commercial business added to costs in this segment. Now turning to operating expenses.
I would like to provide some additional information around our operating expenses on a cash NPAT basis. This is particularly important area of focus for me and for our business. Our operating expenses increased by 5.9 percent. And while payroll costs decreased, there has been an uptick in marketing costs and depreciation and amortization. We continue to maintain our disciplined approach to costs with payroll expense down 3,900,000.
This has been achieved by continuing to leverage technology to automate and better serve our customers. Our success in FY 'twenty one also resulted in a normalized level of incentive payments when compared to FY 'twenty. In addition, we benefited from an increase in government payments, which have now ceased. Operating expenses increased by 900,000 and reflects the increase associated with overseas expansion activities, partially offset by the continued benefit we receive from the rationalization of products. Marketing expense of CAD30 1,000,000 was up CAD6.3 million against FY 'twenty.
A conscious push was made to build brand awareness and continue to develop the brand after our rebranding back in November 'twenty. The increase in marketing has had a positive effect on attracting and activating customers as evidenced by the strong volume growth in the buy now, pay later sector in the second half of 'twenty one. Depreciation increased CAD7.1 million and reflects the investment in new product development, including Bundle, Home Pro as well as the recently launched Hum Tap. Looking at the bottom right hand corner, we have provided our cost to income ratio and also broken out the marketing and depreciation impacts. Importantly, the core business costs have maintained a lower trend in FY 'twenty one.
And I note the ratio has also been impacted by lower net operating income. Turning to our credit performance, which was a highlight for FY 'twenty one. Our FY 'twenty one net loss and impairment performance was driven by our investment in technology and focus on credit decisioning and collections over the last few years. Net loss, which represents gross write offs less bad debt recoveries, was down 18.6% for the year. Buy now, pay later decreased $10,300,000 and reflects the investment we've made in our credit origination engine, including a bespoke buy now, pay later serviceability model.
Au Cards is down 9,100,000 and benefited from the pay down in discontinued products as well as a broader wide group improvements in fraud in partnership with GBG. New Zealand cards was an anomaly up 2,500,000. And this related to front book, including a new open loop card scheme program that is a higher loss rate than the legacy closed loop products. We note that this is off at an extremely low base. Commercial and Leasing continues to perform strongly and reflects our credit approval processes combined with management implementing a new credit matrix for decisioning.
Turning to the COVID-nineteen overlay provision, the other material movement that affected the impairment performance in FY 'twenty. At the bottom right hand corner of the page, we have provided the balance sheet movements between FY 'twenty and 'twenty one. The 43,300,000 COVID-nineteen overlay provision charge raised in FY 'twenty was reduced during the year with 21,600,000 remaining on balance sheet. We believe the remaining COVID-nineteen overlay provision is prudent given the continued uncertainty surrounding COVID-nineteen and its impacts on the economy. In looking at the balance sheet provision movements in more detail, the BNPL segment COVID-nineteen provision increased slightly.
This was because the provisions released during the year were offset by an increased provision for the bundle. This is reflective of delivering a new product into market, and we continue to adjust our settings over the year to drive growth and profitability. Although New Zealand Cards net loss increased, the improved economic outlook led to a 4,900,000 COVID-nineteen provision reversal. AU Cards and Commercial Leasing were broadly flat in line with the net loss performance. Turning to our Credit Risk Management slide.
I won't spend too much time on this slide, but as you can see, there are very positive multi year trends in loss performance against average net receivables for most of our segments. The group performance was 3.5%, which is down 60 basis points, and we continue to look at ways to better manage our credit performance. Turning over the page, I believe our funding platform is a real strategic differentiator against our peers. Our track record across all of our facilities cannot be replicated overnight by our competitors. The team has been extremely busy with over $1,000,000,000 in asset backed securities issued during the year, with a number of transactions achieving record low pricing.
Some of the key highlights include the 2 hum securitizations in October June. The successful execution of the transactions also reinforce our leadership position in green ABS notes. Our Flexi commercial securitizations in March 'twenty one was upsized from $300,000,000 to $450,000,000 following strong investor demand. Finally, looking to the right hand side of this graph, we enter FY 'twenty two with almost 1,000,000,000 in headroom to fund our future growth ambitions. On the next slide is our corporate debt facilities.
The company has substantially strengthened its balance sheet, and our corporate debt facilities remain undrawn as at 30 June 'twenty one. In June 'twenty one, we secured commitments for $110,000,000 under a new 3 year syndicated revolving loan facility, which replaced the existing $197,000,000 facility. The new syndicated loan also diversifies our core banking relationships with 2 new international banking partners joining the lender group. The smaller facility is in line with the company's current debt needs and will also have the positive effect of reducing undrawn fees. We finished the year with $107,600,000 in unrestricted cash and combined with our syndicated loan facility gives us the balance sheet flexibility to pursue future growth initiatives.
And on that note, I'd like to pass back to Rebecca to close the presentation.
Thank you, Adrienne. In closing, we're excited about the future. Humm Group has numerous growth initiatives underway, including international expansion, new product growth and new partnerships. We will also be holding an Investor Day on the 27th October, where we will provide a full strategic update alongside volume and other measures for FY 2022. Thank you for your support.
And I'd now like to open the call for questions.
Thank And the first question comes from Apoorv Siegel with UBS. Please go ahead.
Good morning, Rebecca and Adrian. Good to see the momentum across the business with those new partnerships and the new products. But just with the lockdowns, can you talk about the net impact of the start of FY 'twenty two? I know you said earlier that little things has had an offset from online. But I guess is the impact of volume still net negative for the group given that you have exposure to big things, cards, which is the hospitality exposure and then SME lending as well?
Thanks for the question, AP. We have started the year with strong momentum and growth across all of the segments. And this is also, I think, a benefit of our diversified product strategy and the shift that we've made towards direct to customer acquisition, particularly over the last 12 months. And so this diversified strategy with little things, with bundle and pro and also the continued demand in our Flexi commercial business has seen us start the year in positive growth territory.
Okay. That's pleasing to hear. Second question just on the cost outlook into FY 'twenty two. You said in the presentation pack expecting a moderate increase in the CTI ratio. Is that an increase on the 55% for FY 2021 or the approximately 59% in the second half of twenty twenty one?
And if on that, if I can ask more specifically as well within the buy now pay later business, there was a slide where you called out about a $22,000,000 investment in FY 2021. Should we expect a substantially higher level of dollar investment in 'twenty two just given the international expansion now in Bainaka Lea?
We haven't given any specific cost guidance for next year other than to point out the investment that we'll be making into the U. K. And Canada. And we continue to be focused on costs right across the business. Obviously, we'll be continuing to invest into our new products.
Okay. Sure. Just one final question before I close off. Just on the gross income margins, there was some further sort of compression there in the second half, particularly in buy and pay later. Can you just talk about the competitive environment in BNPL and whether those margins are now the new base or if there could potentially be further potential downside in 2022?
There is, given the competitiveness of the sector AP, which you've pointed out, there is pressure on merchant services fees. What we've been able to benefit from, particularly in our bigger ticket items, has been the underlying, I guess, restructure of our credit approach in this segment. So we have substantially reduced the net loss to ANR, particularly in big things, and this will be a permanent resetting for us as a business. We've also, because of the tenure that we have had in this business and the successful securitizations, we had one of our best competitive advantages, which is the lowest kind of cost of funds, we believe, out of our competitive set, particularly in that larger ticket. And so what that means is that we have been able to combat some of that top line merchant services pressure with strong performance in credit risk management and cost of funds.
And so we have been able to hold that net transaction margin across particularly that area of the portfolio fairly steady and it is a key focus for us moving forward.
Got it. Okay. Thanks for your time, guys.
Your next question comes from Brandon Carrig with Macquarie. Please go ahead.
Good morning. I just had a follow-up just on the cash impact forecast in the international division. So is it fair to think about that as that sort of quarantined to international and then similar to what we've been seeing in the investment within the division that they will just offset the profit contribution from the domestic and Ireland Buy Now Pay Later business?
Yes. So I think what we have from a product development perspective, which is where a core amount of the investment occurred last year, We feel that we've got that product investment relatively right with the introduction of Bundle and Home Pro. And so now the investment is in scaling those products. And so we are expecting the overall investment and cash impact to be slightly lower than the investment that we've made in last financial year. And so it's safe to take that guidance range of that $12,000,000 to $14,000,000 as the investment from a growth perspective.
Okay. That's clear. And then just on the Aussie Cards business, apologies if it was touched on specifically, but the $163,000,000 of travel volumes, is it fair to assume that that's very close to 0 in FY 2021? And why you haven't separately called out the volumes for travel in the chart on Slide 21?
That would be fair. That would be fair. While we did see some positive shoots from a domestic travel perspective, obviously, that's with what's happening in the country, around the country right now, that's reversed.
Okay. And then the last question,
just
on leasing, obviously, stronger performance in the business. So just to clarify the strategic reviews, in essence, it's done and that business is now happily you're happy owners of that division and that business now going forward?
Yes. The successful reorientation to that broker originated channel, which is predominantly Chattel Mortgages is absolutely we are thrilled with the business performance in that area of the business and believe it's very much a strong strategic asset of Home Group.
Okay. That's all for me. Thanks.
Your next question comes from Scott Hudson with MST. Please go ahead.
Yes. Good morning, everybody. Just I guess a follow-up question on the cash impact on BNPL. That $15,500,000 sorry, dollars 15,800,000 in regards to the domestic business through 'twenty one, I mean, does that recede in 'twenty two given, I guess, PUMPRO and Bundle are now up and running?
Yes. So we've completed the bulk of our investment in those products. And as Rebecca said, this is now about scaling into international markets and scaling across the country.
Yes. So relative to that $15,800,000
I mean is that, I guess, become a tailwind in 'twenty two? Or is there still a cost associated with scaling those businesses up? Or is that captured in the $12,000,000 to $14,000,000 in international?
We do see that the investment in this area of the business being less than what it was in the prior year and the majority of that is captured in that impact of the international expansion.
Okay, great. And then just going to, I guess, the chart on Page 8, which I guess summarizes all the BNPL offerings. Can I get a sense of I guess it seems like the volume has been driven more by the little things products and bundle products more recently? In terms of, I guess, the economics of each of those products, I mean, is Big Thing still the biggest earnings driver of the BNPL product solution?
At present, yes, that would be fair to say. And I think we will get more into the unit economics of each of the products from a contributor perspective at the Investor Day, Scott. I will point out that obviously the last 12 months with all of the various lockdowns has muted probably the growth that we've had in big things. But in the last quarter, with the economy open, we had 26% growth in big things. So there is very real momentum within that business.
There's also 2 segments which keep volumes while impacted at reasonable levels even with various states in lockdown. And that is our health vertical, which has had phenomenal growth, particularly in dental, veterinary, and we've had some new partnerships in private health. And so all of those businesses remain open. Solar and solar installations in most areas are still able to go ahead, which is a key area, and also things like home improvement with a lot of that work outdoors still able to run and go through. So it's really the retail vertical and big things which is impacted as a result of lockdown when we're open and the growth that we've made in those other verticals shows that we can drive very real volume through there like we did in the Q4 with that 26% growth.
That's great. Thanks. And then I guess lastly just in terms of regulatory approvals in the U. K, I mean is that just the time thing or is there any risk associated with?
We believe, given that we have a very strong track record in a number of markets of offering both regulated and non regulated products, we're very confident in that. We are completely on track to do up to £3,000 in October, which does cover the bulk actually of transactions that we will do within that market. So we see no risks in getting that over the line.
That's great. Thank you very much.
Your next question comes from Sean Mehr with Morningstar. Please go ahead.
Hi, good morning, everyone. I've just got a couple of questions. The first one, Rebecca, you guys talked about competing via higher ticket items, but yet the slide shows that for international expansion, you guys are starting off with the lower ticket items first. So I'm just curious, is this a function of just smaller items being more relevant and resonating better or is this just reflective of larger items taking more time now to get through the approval process?
In the United Kingdom, it's purely a function of regulatory approval. So not a sign of appetite from the market. And in fact, from a merchant perspective, we've seen very strong appetite from bigger ticket. So, I perspective, we've seen very strong appetite from bigger ticket. So as I said, we'll be heading into the 3,000 pound purchase in October in the United Kingdom, and then we'll expand that out once we've got regulatory approval to go higher than that £3,000 limit.
In Canada, we've already received all of the regulatory approvals that we need in that market. And so we will be launching with the combined little and big things offering combined when we launch later this half.
All right. Thanks for that. My second question is just on bundled. I remember Harm has previously talked about there being partnership opportunities with other institutions. So I'm just curious, are there what's the progress around there?
Can you perhaps talk to the kinds of what sort of institutions are you talking to? Is it just the banks or is it someone else in the pipeline? And I guess also on this note, can you also elaborate on why should a bank choose bundle? When they can, like in the case of CBA, develop it themselves and offer what the future of the CEC? Thanks.
Look, we are seeing a broad spectrum of technology players, banks and loyalty programs now really looking to enter this space and capitalize on the structural shift that we're seeing from revolving credit style products to fixed term installment products. And so why? And it's really because buy now pay later companies are close to the customer and there is a very real stickiness with that and you can see that with the number of transactions that we're getting per annum with Bundle, which is just under 100 transactions per year. And it's because we bridge this relationship between shopping, financing and transacting on the lifestyle that these consumers want. So there's a very real incentive right now for merchants, for payment platforms, for finance companies, banks and loyalty programs to all try and get closer to the customer via this channel.
And also when we think about payments in this way, from a banking perspective, and particularly larger banks with legacy technology, they're looking to capture on this huge shift quickly. And so the partnership that we've done with Westpac New Zealand is really a testament to that. And we're seeing more and more in the conversations that we're having with potential banking partners the need and the desire to get to market quickly with a proven product in this space. But of course, the opportunity is not just doesn't just lie with banks. We're seeing a lot of loyalty programs.
The partnership that we've done with Velocity, Frequent Flyer and Virgin is the 1st buy now, pay later rewards based card program globally. And we expect we absolutely expect this trend to continue.
Thanks for that.
There are no further questions at this time. I'll now hand back to Ms. James for closing remarks.
Thank you for those questions. Thank you for your time today. And Adrienne and I look forward to meeting with many of you 1 on 1 over the next couple of days. Thank you.