I am a glass half full man myself. I still think Australia can...

I am a glass half full man myself. I still think Australia can win the second test.

Will start with the positives.

Cash flow was as per their guidance of 6 million for the half.

They are maintaining a 50% marketshare in the debt agreement business. We know from insolvency figures that the number of debt agreements being entered into is increasing. This provides a stable base, some might even say a cash cow.

Small business lending is increasing. The loan pool has increase to $25M. A 25% increase in the past six months. Loan pool set to grow to over $50M in coming years. Appears to be profitable and growing.

The personal lending trial is underway.

Having reviewed the financials, my gut feeling is the ‘reduction in our doubtful debt expense due to the improvement in the property market’ is likely to be in the vicinity of $3M. The basic logic being that there administration expenses have been reduced by approximately $3M. I am therefore of the view that without the accounting adjustment, there would be no growth at all this half.

While that seems negative, the home loan pool has only dropped from $221M to $214M. Not substantial in my mind. Brokering profits have increased.

I ask myself what it costs to gear up to introduce a new product like personal lending. Surely there have been expenses? Were they offset against the home lending business?

Anybody that has read my previous posts would know that I am upbeat on this entity. Nothing has changed, I believe one of the lending arms will eventually go gangbusters and short term pain, like what was felt on Friday, will be quickly forgotten.

Let’s hope I am right. Lets hope management continue to get it right. Thank you to the other posters. Its always good to get another opinion.