Thanks for sharing your thoughts. Always exciting to find out...

Thanks for sharing your thoughts. Always exciting to find out other Diverger shareholders exist!
Great to hear that Knowledge Shop and TaxBanter are well thought of. The numbers have obviously been great but good to hear from people in the industry.

I'm a little less optimistic about upcoming HY results. A few items were flagged at the AGM that indicate near term results are unlikely to be amazing:

- corporate costs are up

- accounting flat this year (tough comparables as covid was a bit of a boost for training, esp higher margin online)

- loss of approx. 100 LARs. Worth noting that if LAR numbers have stabilised it is very recent and hasn't come through in the accounts yet. About 55 advisors were lost at the turn of the new year due to FASEA. Probably see another chunk of LAR losses at the end of the financial year.
Good news is that LARs are pretty low value at $4k/year revenue vs $28k for full advisers
FYI: wealthdata does an amazing job tracking adviser numbers https://wealthdata.com.au/adviser-movement-fast-facts

- there was a bit of job keeper in last years numbers

Whilst that might come across as a bit negative, I'm very optimistic medium term (looking out a few years).

+ Knowledge Shop looks like a wonderful business. Should continue to grow and see further scale benefits. Knowledge Shop moving into the wealth space seems a logical move and an avenue for further growth.

+ Full Adviser numbers are actually growing. And early signs are that Paragem is going to be a quality addition. Should see some scale benefits.

+ Services to self-licensed advisors seems a logical move to build further scale.

+ Maybe some benefits from the HUB partnership?

+ Board and management understand the wealth space pretty well. Hopefully some accretive M&A opportunities to compound free cash flow.

The biggest risk I see is poor capital allocation. Significant risk that a lot of lower quality businesses get hoovered up in an attempt to meet the revenue targets.
I was a bit surprised when I learned that the plan is to take equity in advice practices. On the whole these would seem lower quality that the current stable of businesses.
My understanding is that even the very best advice practices make ~30% EBITDA margins.
Maybe the plan is to hit revenue targets and artificially grow margins by collecting dividends from minority stakes in advice practices?
So yeah, I too would have much preferred a ROIC hurdle for the performance shares.

All in all I think this is a high quality business trading at a very attractive price.