Ann: Record Half Year Revenue and More Than Doubling in NPAT, page-29

A bit of a delayed post after the results. I'm still working through a model update, which I will post in the valuation thread when complete but here are some interim thoughts.

My prior comments on the 4C are here https://hotcopper.com.au/posts/59158098/single

• The 4C highlighted a miss on sales (vs my estimates) but still a healthy 39% higher vs PCP. Details on why sales missed in the linked post - no major concerns
• We now have a view of the balance sheet and while the 4C showed weaker cashflow, receivables are up +50% vs PCP so this confirms it's a timing issue only as those receivables will turn to cash soon enough. There's no real aging issues either with debtors so I don't see any provision risk here
• I think the next 4C will be a corker btw. Receivables are materially higher, sales growth will continue and we'll have more cashflow from the high margin airtime. I'll provide more detail in another post
• I've done a line by line view of the P&L vs what I had and there are 2 things I've noticed in addition to sales, which I've commented on previously

1. A lot of the expenses came in lower - this included COGS and other costs. Employee costs were 10% higher than my estimates. This benefited the P&L overall
2. The big thing though is that I forecast a profit contribution from the JV but the JV printed a small loss. As there is literally no detail, it's difficult to work out why but I'm going to spend some time tweaking the model with this new data point. The profit contribution is material to my valuation thesis so I need to find out where and why I was wrong. When and if I ever work that out I'll share my findings.

Overall though, despite a small profit, I was looking for some inflection in the JV which we did not see and I think that is why we're trending lower - on low volumes though, so no real conviction. Given our proximity to the lower gap and present higher market volatility, I see the very short term price action as lower but that could present a great buying opportunity. I'm expecting a great March quarter and a MULTIPLE IMPROVEMENT IN NPAT in 2H22. This will be the half when things change IMO - more detail on why when I post in the valuation thread