Ann: Becoming a substantial holder, page-8

  1. 473 Posts.
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    Gerling

    Couple of good questions/statements.

    In relation to their recent price increase - this was quite a modest increase and has been signalled to the client base quite early. Feedback I've heard to date is it doesn't appear to have spooked the horses and is the first of its kind in 11 years. The justification behind it seems cogent and reasonable and the messaging has been clear, although I must admit the timing is a little surprising considering the current macro state of affairs but its reasoning and rationale are sound. I do not expect it to have a material impact as its client base fully understand the value the system delivers to their operations.

    In realtion to the new hires/changes - most of these have been relation to normal turn-over experienced within most mature businesses which Class now is. I look at these more as an opportunity than a threat to re-inject vision and fresh ideas and drive into a business - subject to the new hires being of the right DNA for the business and what it needs to progress the business forward. My understanding is that net/net the number of "C" levels has remained constant but their has been ratehr a changing of the gaurds which again is often seen when a new CEO enters a business.

    As to margin compression - this often occurs as a business diversifies its offerings and product lines. As you note this has occured at Class as the new CEO has rightly decided to augment as well as diversify its offerings, acquiring Now Infinity and building out Class Portfolio to encapsulate and support the other special purpose reporting entities (Trusts, Co's etc). Dependent on their ability to execute, sell and deliver these new initiatives these - this should deliver significant upside IMO. In summary I look at this increased expenditure as a material and key step change to grow a much larger pie.

    I again agree Class is a sticky business delivering cirtical services and solutions and hopefully with its new new initiatives now well underway this will only grow and strengthen as it builds out its capabilities and reach.
 
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