Breakout ?, page-2

A couple of thoughts about FSA.

Firstly, I am a long term holder of this share. I wish all my holdings were like FSA. It’s a gem. A1 in my opinion.

Unlike previous years, the board, in their wisdom have not provided a forecast for FY2015. You might recall that on 16 December 2014 we got a half yearly forecast of an increase of between 12 and 17 per cent. Just 15 days later the actual result was 18.5 per cent. This company can in a limited way control its profits by topping up or delving into ‘provisions’ to meet a forecast. They could of easily have done some accounting adjustments to their provisions to stay within the forecast range. With the half yearly result, I think a subtle message was being sent that the business was exceeding expectations.

The guidance that was provided with the half yearly results was along the lines of if the loan pools can grow for both consumer lending and business lending then the good times will keep rolling. On 19 June we got a two line release telling us that the Westpac home loan facility had been increased by 20 million. I can only take that as a positive.

What stood out for me was the number of Directors buying during the last six months. It was unusual in the fact that there were no directors purchasing in FY2014 and the first half of FY2015. Perhaps another subtle message. Time will tell. I personally think we will be breaking out the Champaign in a months time.