Ann: TNE ARR up 21% and H1 Profit Before Tax up 17%, page-29

"I think this company is better than CSL RMD CAR you name it"

It is indeed a fine company with a trapdoor commercial moat (as in, once a customer is in, it is very difficult for that customer to get out again).

But I think it's a bit moot to argue that it is better than any other company on the ASX.

For example, I don't think the quality of TNE's financial statements are all that they are cracked up to be: since the company started capitalising part of its software development expenses (wef from 2019), capitalised expenditure on software has totalled $312m, compared with just ~165m in cumulative amortisation charge to the P&L.

Now don't get me wrong: there is no reason that those two sets of figures should match over the short-, or even medium-, term (no doubt they are investing ahead of a long future curve), but that difference is large, especially for a field where technology moves so rapidly.

While it isn't a problem yet, it does make me sensitised to the fact that, the bigger the gap gets, and the longer it lasts, the greater I need to bake in an element of thinking that TNE's earnings are being overstated to some extent, and to make some sort of adjustment for that.

Not a deal-breaker, but a brickbat that needs monitoring, within financial performance that is always contains a multitude of bouquets.

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