Ann: Half Yearly Report and Accounts, page-67

Highlights and thoughts from the report:

Finally cash flow positive as promised ($30.8 million for the half)!

Very strong revenue increase (29% YoY). Everything else solid growth except customer numbers which are still stagnant.

Zip convertible notes down to $34.6 million as of yesterday.

Cash and liquidity position increased to $81.3 million (compared to $57.3 million 6 months ago) which alleviates capital raise risks.

The US is doing far better than Australia. US has $38 million EBTDA for the half compared to $10.7 million EBTDA for Australia. Plus growth in the US is trending far higher than in Australia.

Customers in the US only transaction 4.1 times per year (total spend of $792 per customer). Would like to see the transaction numbers increase significantly – I suspect a lot of customers are barely transaction, whereas a lot are using it quite regularly. Would like to see these numbers for Australia listed as well.

Bad debts in Australia starting to show some early signs of progress – but still a long way to go. Arrears trending downward to around 2.5%. But net bad debts still lagging behind.

From the income statement:

Cash gross profit margin increased to 41% - and with revenue margins forecasted to increase and cash cost of sales forecasted to decreased with interest rate cuts this should increase further in future.

Seems to be showing $73 million as net profit after tax??? That’s epic! Although seems to be largely as a result of a $139.7 million fair value gain from the consent solicitation process for Zip’s Senior Convertible Notes – I don’t understand what this means though. Seems like clever accounting – either way glad to see a profit listed even if it is only a one off at this stage.

They had to pay income tax expense of $14.5 million? I would have thought they would have had carry forward losses and not had to pay any tax?

Would have liked to see more info on Zip Plus and how it is affecting the financials – as well as how many users have transitioned to Zip Plus and how the rollout of the product is going overall.

Overall I think the company is going in the right direction, and look forward to seeing the next few reports especially once all the convertible notes are gone and the US continues its rampant growth.