The underlying result is solid and reinvested profits mean that...

The underlying result is solid and reinvested profits mean that growth should continue without gearing getting too high.

On the accounting change I find this a weird couple of slides . Firstly, IMO, they have done a relatively poor job of explaining the matter. Secondly, it would appear that the fees we are talking about here are upfront fees charge to the customer for writing the loan and I assume would never have been raised had the loan not been issued. If so they would be a direct loan origination fee. Such fees should be recognised as an adjustment to the carrying value of the asset at origination (i.e. reducing it) and then amortised using the effective interest method, thus increasing the subsequent revenue. The period over which to recognise that revenue would depend on the expected life of the loan. The presentation appears only to be referring to underperforming loans. So I assume that where the customer was in default they may have effectively reduced the expected life of the loan and accelerated earning of the upfront fees, while also taking an impairment at the same time. It would seem odd to recognise the fees as revenue at the same time as an impairment rather than a lower overall impairment/provision charge and no revenue. These facts aren't clear from the presentation....Anyone want to give their thoughts on the same? If this is not the case I can't see how they ever could have got to the treatment they currently have and been "in compliance with all current accounting standards", which would lead me to believe the new standards being smoke and mirrors for correcting an error in the way they currently treat this particular thing (separate to the adoption of the expected loss model). Without explanation in the presentation we're left wondering and trying to work it out for ourselves...It's not sheep stations, but still drops around 8.5% from statutory NPAT.

The adoption of the new standard a year early and thus its expected loss model I'm in favour of. Particularly if they have a good understanding of the macro-economic cycle so that sufficient buffer can be put away to deal with the inevitable swing in market cycles. Generally speaking it feels like we are at a cyclical low in terms of provisioning levels.

IMO as a shareholder I also would have liked to have seen something in the Investor Presentation about plans for their borrowings (unless I've missed it). There are bonds maturing towards the end of the financial year and I would have appreciated some sort of update or commentary on that (I can infer some things from some of the commentary, but nothing definitive). Also given the growing size of the secured lending vs MACC/SACC I would like to see a reduction in the interest rate paid to reflect a changing risk dynamic as we move forward. If they can't achieve that I would like to know whether they are carrying out any structured assessment for considering other options for optimising capital structure. For example, at the current interest rates being paid (12% on finance facility or 8.4% post tax) and the current share price of the company one has to wonder whether it wouldn't be better to do a rights issue, capital raising, reduce dividend (that would no doubt offend some), optionality in debt funding (e.g. out of the money conversion rights) to bring cost down etc.. I also don't understand why the expensive finance is fully drawn when they have $21m sitting in the bank?

None of the above change my view on the underlying performance of the company and the reason why I hold my shares. I think the company reflects good value. However, I think the presentation itself is far from best in class and I would like to see them up their game in that regard and would like a few more details about direction on some key things to give me comfort they are on management's agenda.

DYOR