Client cash outflow has slowed significantly, down about 9%...

Client cash outflow has slowed significantly, down about 9% between end of first calendar half 2023 ($456m) to end second half 2023 ($417m). My theory is that those who are interest rate sensitive have large moved their cash already, and those remaining either have too little cash to be worthwhile or can't be bothered. Recent change where customer dividends are now deposited into their SWF account by default should help.

Latest AGM speech mentioned that cost base increasing by around a third last year to $20m was due to changing to new settlement and banking platform. So call it roughly $5m in expenses associated with changing platforms. Assuming they don't switch platforms again that's a potential $5m expense that can come off the cost base. So I think they can remain cashflow positive in the near term.

Things I'm watching is where the interest rate settles at the end of this cycle. I don't think it's going back down to 0%, 1% type figures. Too inflationary, and employment is still above historical averages. If it's ~3%, and providing customer cash stabilises at around current levels, I think this can still be a worthwhile investment, where their main revenue source becomes investing the client "float" in fixed interest.