Ann: Half Year Financial Results Investor Presentation, page-3

Just had a quick look. The underlying business is strong as always (despite 24% of trading days lost to lockdown) and getting stronger as we move into the second half. It really is a machine.

I presume the increase in payroll is attributable to the acquired stores over the past 12 months and is therefore acting as negative operating leverage in the first half. Something I would expect to see reversed in the second half as we fully reopen.

How will the management invest the funds generated? That, as always is the question. In the first half the funds were invested back into the business but 1H EBITDA was offset by a significant increase in the expected credit loss allowance expensed in line with GAAP requirements ($2.8m). As loan book growth was weighted to the end of the half, the revenue benefit from this lending growth is due to flow through in the the next 6 months.

The yield below assumes the second half is flat. With all of the tailwinds, that should not be the case.