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Ann: Full Year 2021 Results Presentation, page-8

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Just_a_guy

5,420 Posts.

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27/08/21

12:07

Post #: 55623234
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Originally posted by madamswer: ↑

@Just_a_guy ,

Normalising each half-year for the long list of NRIs (which are becoming more recurring than not over time for EAS, but that's a separate matter) the second-half did look to me to be disconcertingly weak:

Madamswer's "Normalised" EBITA ($m)
DH19 = 2.3
JH20 = 3.4
DH20 = 3.5 (+55% on pcp)
JH20: 2.9 (-16% o pcp)

But I think I have cracked the code (at least part of the code).

The answer lies in (contextually highly material) movements in the provisions for ASIC advisor levies due to a combination of change in the number of advisors as well as the big increase in the per advisory levy, effective Feb 2021.

From the notes to the Dec 20 accounts:

View attachment 3523910

As can been seen, there was a ~$220k easing in the provision in DH20, followed by a~$1m increase (from $0.698m @ 31 Dec 20, to $1.72m @ 30 June 20) in JH21:

View attachment 3523937

Now I'm not sure to what extent the company recognises revenue recovery, if at all, nor the timing of such revenue recognition but what I think I can say - without being prescriptive - is that, while the DH20 appears to have been modestly overstated, the underlying JH21 result looks like it is a lot stronger than suggested by the $2.9m figure I derived.

No matter how it is sliced, a $1m movement in this provision in the half is highly material in the context of a $2.9m half-year operating profit number.

.

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nice pick up and thanks for sharing. I haven’t made it that far through the accounts and had just used the companies adjusted operating profit number which mirrors your half yearly breakdown in terms of yoy growth/decline.

im surprised they don’t exclude that provision for adjusted operating profit.

EAS Price at posting: $1.16 Sentiment: Buy Disclosure: Held
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0 Great analysis

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