Ann: Half Year Accounts for period ended 31 December 2023, page-6

Way too muddy to make ends of it.

• change in auditor same time that the CFO resigns last year
• seems to be a change in accounting treatment/recognition of COGS, corporate costs and other expenses (see p12)
• corporate expenses lower, despite dual CEO charges and redundancies
• change in contract structuring to year-based
• change in business strategy to focus on increasing ARR
• 19 new ERP customers signed on in the half
• top line revenue lower, yet receipts from customers consistent year-on-year
• despite top line revenue lower, and receipts from customers consistent, cash expenses significantly higher ($9.4M vs $7.8M PCP)

The commentary in the Business Update doesn't reconcile to the magnitude of some of these changes vs PCP, but I suspect the crux of it is corporate costs hadn't previously been distributed down to the product lines, which was disguising profitability of business units as standalone units when in practice they were carrying excessive bloat on the office floor.

Its a wholesale cleanout by the new executives, but the spike in operating cash outflows needs better explanation.