Ann: Macquarie Australia Conference Presentation, page-22

@MarsC

Point taken on looking at margins over half year periods. Had not looked at this before and was curious to get a feel for the margin. Will have a look at the full year periods to see how they have tracked over time.

Would support your comments that the obsession with growth is not always ideal. If FLT could simply improve the margins by a few basis points (within the existing businesses) then the bottom line would look pretty good.

With regards to employee numbers and the relation to TTV:
I wonder how much of FLT's margin comes from the underlying contractual agreements from suppliers vs the markups which agents try and add to this base margin. I believe the markups vary hugely between agents and are probably influenced by how aggressive the agents are and how gullible clients appear to be. When a client shops around at different FLT stores (and attempts a price beat), agents can see exactly by how much another agent has marked up the price. Agents can easily add a few hundred dollars to a package holiday and many a client will be horrified if they found out by how much they have overpaid. Shoppers are probably wising up to this and I suspect this additional margin will be eroded over time.

Will be interesting to see what the operational review uncovers / suggests. I suspect that store and staff numbers will be a key focus in order to improve the TTV/employee. Reducing staff turnover might also make a big contribution because it sounds like a bit of a revolving door - probably due to the low base salaries. Since it seems like most new agents take 12+ months before they even get close to their "cost of seat", minimising this turnover might make a big impact.