Ann: Becoming a substantial holder, page-9

Extract from Lakehouse Small Company Fund August report.

Turning to specific companies, the Fund’s biggest detractor was Bravura Solutions (-12.2%).

Bravura, who delivered an underwhelming result with top-line growth of 6% and
operating profit growth of 15% for the year. While recurring revenue increased slightly to 77% of
total revenue, and profit margins widened, the market was disappointed that over 80% of the
revenue growth came from acquisitions. Add to that management’s outlook that full-year earnings
possibly may be similar to fiscal 2020 and one can understand why the shares sold off.
For our part, we understand that few companies may be looking to make expensive wholesale
changes to their enterprise workflow systems during a time of such uncertainty, but we take on
face value that Bravura’s pipeline has been delayed rather than cancelled. System upgrades cannot
be put off forever and we remain comfortable with the longer term opportunity for legacy systems
to move to more modern platforms like Sonata, for services to move to the cloud and demand for
continuous deployment via microservices like FinoComp. With a modern tech platform and
fortress balance sheet with over $100m in net cash, Bravura remains well placed over the longer
term