Thanks Axe and Tattie. Yep, I'll cop it - confusing. And as...

Thanks Axe and Tattie. Yep, I'll cop it - confusing. And as rightly pointed out, it has not been presented that well.

Some companies split up CAPEX into 'maintenance CAPEX' (around the level of depreciation) and 'growth CAPEX' (net expansion in capital). Perhaps for AFL we need to think of it as 'maintenance OPEX' and 'growth OPEX' for then. Not sure if this exists, I am sure those who dabble in SaaS would be more familiar. Again I don't want to confuse the point, it's just trying to calculate what the true margins are into the future.

I posed the question on Coffee Microcaps to the CEO (available on youtube) and wrote to their investor relations about the two expenditure lines to try and understand it better. Specifically, software expenses and marketing expenses. The response was essentially the marketing costs will keep growing at a linear rate for the foreseeable future, but software will taper down as a percentage. We shall see how this pans out.