Ann: October GPTV Update, page-106

GPTV up…but the announcement also includes some key indicators that ISX’s runaway growth has hit a pretty solid brick wall.

September vs August showed a >70%increase in GPTV.October vs September is only +13.5%. The argument with ASX / ASIC can’t explain that, surely.

Then there’s approvals. The ann says “Group approvals continue togrow consistently in line with expectations”. That just doesn’t reconcile at all with the actual approval numbers. The graph shows around 12 approvals in October, vs. an average of circa 26pcm in Q1, 27pcm in Q2, and 32pcm in Q3. Going from 32 to 12 seems to be the opposite of “growth”. Maybe ISX thinks the ann explains that, with this line: "October 2019 approvals do notinclude annual review of existing merchants". But what does that actually mean, when what they’re counting is “business customer group approvals”? Surely if a customer has been approved, it doesn’t get counted again in future approvals tallies? Or, does every client actually get approved (and counted) annually??? That’s the only explanation I can come up with for those words. And if that is right then most of the “approvals” aren’t new to ISX at all – they’re just being counted again, for some reason.

Finally, cashflow. This update includes a “historic 4C cashflow analysis”, which shows a very pretty graph extending to end September. But cashflow for October isn’t mentioned!! If ISX had good news re October cashflow, surely they’d have told us.I wonder if that ties in to this statement: “ASX’s enquiries continue to impact management’s time and focus, with a review on [sic] the impact to be taken [sic] by the Board in early December”. Does that statement foreshadow a downgrade? Hard to see what else it might be getting at.

At $1.07/share ISX is valued at about $1.15b. That’s for a company with growth slowing so quickly it might soon disappear, and all of $1m in positive cashflow last quarter. And that’s putting aside the extraordinarily well timed June 2018 revenue spike, and all the Red 5 stuff, and the very detailed ASIC and ASX enquiries.