Not sure why the market has got its knickers a bit twisted this...

Not sure why the market has got its knickers a bit twisted this morning, because I thought the result was another good result from IFL, demonstrating excellent management over the things that can be controlled.

Maybe the market isn't happy with the derivation of the "Underlying Profit" figure. (Even I thought there were a few small liberties taken to get to the underlying figures.)

Or - what I suspect has happened to some extent - is that the market had a knee jerk response to the EPS figure [*] which is flat on pcp, and went backward on JH2017's figure... .

No matter, it has provided me the opportunity to buy more shares in IFL this morning.  

I think that analysts and the market at large - as they have always tended to with IFL - are underestimating the scale and value-creation that will arise from the acquisition of the ANZ Wealth Management business.


[*] I think some elements of the market - notably the quant funds - have omitted to consider that EPS have been temporarily diluted due to the capital raising which was undertaken during the half, to fund the acquisition of the ANZ business, the financial benefits of which will only be seen in 18-24 months' time.

From the outset, one of my main concerns with that deal - even though it is likely to be transformational for the company - is that there is a multi-year timing mismatch between when IFL needs to put up the capital, and when the financial fruits of the deal are enjoyed.  So, IOOF shareholders are being required to exercise a fair degree of patience. But the market, as is well-known, is a most impatient beast.