I thought they were in line with my expectations. I was actually...

I thought they were in line with my expectations. I was actually pleased as I was concerned about higher remediation charges (still possible)

UNPAT of 57mil after the 7mil legislative hit is pretty significant and as DC referred to in the call, resulted in the net margin falling of a cliff in that half. maybe I'm biased but I don't see another steep change in net margin any time soon, so I suspect their expectations for the pro forma group are very achievable.

so back to valuation:

proforma unpat of 57 (ioof) plus 42 (p&i) = 99mil x 2 (annualised) =198mil + ~40mil post tax for outstanding synergies to be realised over the next 3 years. = 238mil / mc of 2.4bil = pe of 10. after synergies, or pe 12 pre synergies. This is excluding any growth from funds flow, and considering flows have been ok despite the terrible press of late, I would expect flows to improve if anything.

At a PE of 10 I think IFL is appealing again given the super tailwinds, and short term reduction in competition in the space. This is a highly cash generative business.

The biggest negative for me is the change at the top. To lose CK, DC, and GV over the last 12 months is very significant. Although I like Renato's enthusiasm, I think he's a big step down. Anyone know anything about the ex-spark CFO who is joining IFL soon?


I enjoyed the call esp the Q&A, where Laf from Bell Potter was made to look pretty amateur and desperate.