Ann: Appendix 4E and Annual Report, page-9

I’m really attracted to this business because of:

- the simplicity of this business model and the accounts
- the insider ownership
- sensible capital stewardship
- the two divisions complement each other both in customer acquisition and also in understanding customer risk.
- and also the inherent hedging of the two divisions to the credit cycle.

What i’m not sure about is, and what has limited my exposure here so far, is my uncertainty about what happens in a recession (as Australia hasn’t had one since the company existed).

do you (and others) think the profit from the services division will partially, completely or more than offset, the expected increase in losses from the lending division, in a small/medium/deep recession?