It appears to me that the drop in SP is not because of the revenue recognition change but the contribution from interest income. See snapshot below.
This half benefited from almost $5m in PBT compared to FY22. If you strip this increase out, the PBT grew by only 5% and not the 25% headline figure being reported. Very sly of management to not make the market aware of their poor underlying performance. I had no idea that almost the entire PBT growth is coming from interest income. Once the process that helped DTL accumulate net cash unwinds, the PBT will get a strong negative hit.
I have to agree with the market here. This is red flags. As far as I can see, their revenue is growing 12% but this is on deals with lower margins such that the bottom line would only improve by half the rate of top line revenue growth if interest income wasn't included. Imagine what would happen to the bottom line if they had to start paying money to the bank instead of collecting interest.
Please correct me if I have misinterpreted the report or drawn incorrect conclusions.
DTL Price at posting:
$8.59 Sentiment: None Disclosure: Not Held
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