Ann: Quarterly Activities/Appendix 4C Cash Flow Report, page-8

I don't quite agree with your analysis. There is no "adding back" of the advertising spend. You can't add anything back to a cash flow report. That's the whole point of them. The commentary states that most of that spend was a once-off tv ad campaign run on the Channel 7 Olympics coverage. That's a material fact, but all the cash expense is there in the report. Was is a bit confusing about that Q1FY22 CASH EBTDA table in the activities report is that it doesn't correspond directly with the net cash used in operating activites (item 1.1) from the Cash flow report. There is $188,000 difference.

I don't usually delve deeply into the financial reports but thought I would do a cursory comparison with previous quarterly cash flow reports. Quarter to quarter the net cash used (item 1.1) does jump around all over the shop but clearly the Olympics advertising campaing was a huge strategic splash. While staff costs have been increasing quarter on quarter over the past year or so, they jumped up last quarter by 30%.

	FY	Quarter	Net cash from ops	staff exp
1	22	Sep	-5,688	4,647
2
3	21	Jun	-868	3,576
4		Mar	-2,002	3,684
5		Dec	-2,576	3,210
6		Sep	-1,694	2,652
7		TOTAL	-7,140	13,122

I've never noticed that the quarterly reports provide the details of the debt facilities. From item 7.6:

The facilitiesin 7.1 are as follows:
-Wisr Warehouse of $350m with NAB as senior funder, a cost of funds of circa 3.5%,
senior maturity in November 2022 and secured against the loan receivables it funds

-Wisr Freedom Trust securitisation with a current balance of $181.8m (amortising
loan book) and day one weighted average margin of circa 1.5% + 1 month BBSW

-Unsecured Head Co loan facility of $21.5m, with $6.5m drawn, 9.5% pa coupon and
maturity in May 2023

In October 2021, the Wisr Secured Vehicle Warehouse became operational with an initial
$225m commitment, NAB as senior funder, Revolution as mezzanine funder, a drawn cost
of funds of circa 2.3% over BBSW, maturity in October 2022 and secured against the
receivables it funds.

In Q1FY18, an off-balance sheet wholesale funding agreement was entered into structured
around the whole loan purchase of Wisr originated assets. The balance as at 30 September
2021was circa $40million. Wisr continues to manage this loan book but is not using the
facility to fund loans at present.

The current monthly Bank Bill Swap Rate is .01%. So if you annualise the current monthly BBSW, does that work out to a figure of 1.62% p.a. for the Wisr Freedom Trust amortising loan book? That's the triple A rated loans right? That's some cream right there.

Getting back to that advertising campaign, I am guessing that it was more of a brand recognition building exercise. People might ask, why bother with mass market brand recognition if brokers are the ones recommending your product and writing the business? Well, it is about recognition. When a broker suggests a Wisr loan or puts forward a choice of say three alternatives to a client it's about the client having some comfort through familiarity (if even sub-consciously) that they know the brand ("Oh, I've heard of them, sally from work got her car loan through them"). It was a bold spend. It would be interesting to see if the company follows up with any brand recognition market research to monitor the results.