Todays Volume, page-11

Hi Klogg,

I have been away so just looking at these figures now.

Reading through Indy's Executive Chairman address, it is all business as usual, so nothing to explain the share price drop there.

When you do a comparison of the 4C's from 1st Qtr 23 to 1st Qtr 22 though, you start to see why the fall may have happened.





Receipts from customers have risen by 3.8% on the prior year, but costs have risen by 20%, leading to a decrease in pre-tax cash flow of 35% compared to last year.

Don't forget these receipts already include recurring income from the Peoples Choice acquisition, so it suggests on first glance that
receipts have decreased when you exclude the acquired fees. Some of this is explained by the reduction in platform fees but this was only to have an annual effect of $1 mill, so hence $250k for this qtr.

As you would expect, staff costs particularly have increased as a result of the acquisition but also Indy referred to employing more people in practice management and compliance.

You therefore have a weak receipts figure in an environment of significant expenses growth.

So the issue is that Indy's steady as she goes report, doesn't match the actual results as per the 4C and there was no explanation in the outlook part of his report to explain this, even though both were released at the same time.

I don't know if he mentioned anything verbally in the AGM to explain this.

Of course having said all this, the 4C is a cash statement, not a P& L prepared on an accrual basis, so there may well be some increase in debtors that hasn't hit the bank account at 30/9/22 to explain this, but on the face of it the result looks weak.

Obviously Indy would be aware of that and his "steady of she goes" mantra suggests to me that he thinks that they will catch up the shortfall in later quarters and they will still end up with a double digit increase in profit over the full year.

Until we see evidence of that though, I think that is your reason for the share price weakness.