Ann: Appendix 4E and Annual Report, page-20

I am very impressed with the personal lending arm of the business. From the figures I have pulled from the annual report, as at 30 June 2018, the loan pool was at $48,347,044 and expected to grow to $100M in the next 2 years. What will the loan pool be in 5 years’ time?

The loan pool of $48,347,044 as at 30 June 2018 was funded by a Westpac loan of $37,321,732 and the difference of $11,025,312 from company funds!

We paid $1,019,211 in interest to Westpac on the $37M. What do we get in return for this investment, well last financial year we charged the punters interest of $6,567,685 and fees of $2,626,652 giving combined revenue of $9,194,337 for the personal lending. Yes, there is some bad debt, but nothing crazy, provisions have been made for the current financial year of $732,737. I will let you do the sums but it would appear that there is a healthy lenders margin.

I don’t know what the staffing, administrative and marketing costs are; however, I like this statement, as we grow our loan pools our business will benefit from higher incremental margins due to fixed cost leverage. This will result in profits growing at a faster rate than revenues. We will continue to see this positive impact to profit growth during the 2019 financial year.

When broken down into different segments, profits for the consumer lending arm of the business went up 36%. Note that consumer lending also includes home lending. Good times ahead. Looking forward to attending the AGM.