Ann: FXL - Full Year 2020 Trading Update, page-41

Hi Tamz,

I wouldn't call this a strong result.

I would call it a sandbagged result.

Flexi has chosen to provide a non cash provision of approx $44m pre tax and $31m post tax.
Flexi claim the provision is for anticipated increase in unemployment.

However we see the following:
Bad debts/doubtful reduced from 4.2%(FY'19) down to 4.1% FY'20
Hardship requests peaked in April
Strong volume growth

We also know the following:
Jobkeeper & Jobseeker extended by federal govt
Only Victoria now has a serious Covid-19 problem
To date $42 billion withdrawn from super and a lot has been applied to debt or banked
Funding costs for Flexi are at record lows

So we see the internal controllables for Flexi heading the right way
We also see massive macro factors significantly dampening the financial impact of the virus

James and Abercrombie have pulled the wool over the auditors eyes.

The results in FY'21 will be stunning and the benefit of FY'20 sandbagging will be obvious for all to see. Imagine if a virus was available sometime in the next 12 months?

Cheers.................Daicosisgod