Ann: FY18 Half Year Results Announcement Date, page-22

Ben, as described in other threads you've been linked to you need to consider Cash Opex as a form of investment. If you spend $100 million in cash to win $120 million Revenue and did so you would book that year's Profit Statement as $120-100 million = $20 million.

However what if you actually spent $110 million in cash because you are in the process of generating leads for next year and could only book $120 million as Revenue because $10 million of your Cash Opex is spent on leads that have yet to become cases? You might imagine that using the same ratio that spending $10 million will generate $12 million additional revenue but you cannot book that Revenue until the following year when those leads become a case you can actually bill for. That is a $10 million cost that you have to carry on your cashflow statement without any corresponding Revenue in that financial period.

So Statutory Profit for this imaginary year will be $20 million but Cashflow will be $10 million. For a cash OPEX cost of just 10% extra than what has been accounted for on your Earnings Statement that's a cash profit to earnings profit ratio of 0.5 or 50%!

If this practice of spending money on generating leads that have yet to become cases and then converting those leads into cases continues YoY, cash profits will always be less than Statutory Profits. If you stopped generating leads than your comprehensive income statement will suddenly reflect the lack of new cases coming on board, you will be spending less cash and your earnings income will be less while your company continues to bill and collect the cash for cases you have are already carrying on the balance sheet as 'WIP'. Cash profits will exceed Statutory Profits in that scenario and the balance carried on the balance sheet as 'Work in Progress' will decrease.

Hopefully this helps. Let me know if you have any further questions.