Ann: Annual Report to shareholders, page-3

"I get margin on transactional revenues of ~48% (1-direct cost of sales/transactional income) which is a significant uplift from last year of ~38% and they are flagging a further improvement as sales increases.......pretty impressive:"

Even more impressive if you look at the half-year trends:

SH2020: 36.7%
MH2021: 40.3%
SH2021: 42.8%
MH2022: 52.7%

(Note: I include terminal costs in my calculations, although it makes no difference to the overall picture)

The other aspect of this result which I think risks being overlooked is the significant step-up in marketing costs in FY2022 (to $4m which is more than double FY2022's $1.9m figure).

They don't break out Marketing costs in the half-year report - they get lumped in with Compliance and IT Expenses, but if you looked at these together on a half-year basis you see a very significant increases:

SH2020: $1.6m
MH2021: $2.1m
SH2021: $2.8m
MH2022: $3.5m


This means that - if management wanted - the past half-year result could have been reported as being even more spectacular than it already was (EBITDA growth of 75% on pcp)

But they didn't do that.

Instead, they are taking some of the dramatic improvements gross profit contribution and reinvesting it in what I call "good costs" i.e., costs that tend to widen and deepen business moats (Compliance and IT) and drive even faster revenue growth (Marketing).

Which should drive even faster growth in gross profit, which facilitates even more investment in "good costs", which drives faster growth in gross profit, which facilitates investment, .... etc.

As a business owner, that virtuous cycle flywheel starting to spin faster is exactly what you want to see occurring.

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