Kearneymaurice, page-2

Hi Whatsnext

All is good at my end.

I just wish that I had some spare coin to take advantage of the current FSA share price.

I have retired from predicting future FSA dividends. I was sure we were going to get a 5 cent dividend this time around.

It was a somewhat mixed result. While I was happy with the lending arm result, the service arm disappointed somewhat.

I was really expecting a larger increase in the debt agreements. To their credit they did increase the number of debt agreements by 2% however they lost market share by dropping to 45%. In their own words ‘profitability was impacted by an increase in operating costs and lower than expected new client numbers’.

One thing that stood out for me is that the employee count for the consolidated entity went from 180 full time employees and contractors to 196. I will ask for an explanation at the AGM.

As you are aware, the board normally gives their first bit of guidance for the FY at the AGM. I have noted that the AGM is a month latter then in past years. We might have to wait until 28 November for some profit guidance.

It looks like they will be introducing a new lending product to help their customers with bill paying. A new company has been formed called Easy Bill Pay Pty Ltd. FSA is certainly looking at new products to grow profits, which is a sure way of surviving and growing in this day and age.

This is the second year of 25% growth in profit. Gotta be happy about that. This might seem strange, but after two years of solid growth, it would not bother me if we didn’t see any profit growth this FY. Let the business consolidate. Its all about lending in the future. Provided they retain the 6 cent fully franked dividend, I will be happy.

While the share price might drift South, the good dividend should put a floor in the price. I am in for the long term. There is a good story being played out here. Take care.