soild result considering environment., page-4

Sorry guys, I'm not as cock-a-hoop on FSA.

The business services division is a disaster with no real improvement over the 2011 performance when this division really fell out of bed in 2H2011. Factoring!!! Every public company in the financial sector seems to think that factoring is the panacea and they are the only ones with the opportunity. This is a tough area with the capacity to rip up big dough without the right controls.

The lending division is flat-lining in a very difficult market with plenty of competition. I cannot see this growing much more. Remember the $600m book prediction of a few years ago? This year the book grew very little.

Then there's the services division where Debt Agreements are the engine room of FSA’s profits and there are some concerns.

In Australia, the DA market increased by 11% yoy, yet our market share dropped from 52% to 50%. We missed our goal of 17,500 DA’s by a reasonable margin (we only got to 16,681...a target miss of nearly 5%).

Yes, we did increase the number of DA’s by 2,287 (or 15.9%) over FY2011, but the PACE of increase is slowing abruptly. FY 2011 added some 3,344 DA’s or 30.0% over FY 2010.

Further, the Services division NPBT only increased by 9.4% with the profit per DA slipping. Weren’t we told in 1H2011 that the costs of administering larger numbers were negligible meaning more profit per head?

Whilst the eps is good, don't lose sight of the fact that our actual NPAT was less than in 2011. The buy back helps to cover a few things in the eps scenario.

I'm seeing signs of fatigue. The ROE is falling, market share was lost, there are no major initiatives happening. It's the same old, same old...and this must play on the morale of the team.

Yes, the cash flow posiiton has improved...great, it needed to because receivables were blowing out the back door. Even now they stand at a whopping $81m.

And yes, the SP has recovered somewhat thanks to the buy back creating some volume buying. What happens when it finishes and surely, it is getting harder to soak up shares given that the Top 20 control 73% of shares in FSA.

I'm considering my position in this company because it is very illiquid. Where is the market when the buy back ceases?