VTL - Vital Telecommunications (formerly Team Talk)

[Snoopy]

I did manage to solve this issue for Skellerup at the transition date.

https://www.sharetrader.co.nz/showth...l=1#post926124

However, doing the same exercise at Vital is proving trickier.

I wonder if anyone got to the bottom of the implementation of IFRS16 on leases on the Vital result from 2020? The answer to this question is not trivial as it affects the adjusted Net Profit after Tax by between 60% and 109%.

From AR2020 p4

"As with our interim results earlier this year, IFRS 16 which although non-cash impacting does impact our results. Our Net Profit after Tax at $0.734m takes into account the IFRS16 impact to Net Profit after Tax of ($0.44m)."

However, this is the only time the figure $0.44m appears in the annual report. So where did it come from?

From AR2020 p17
"For judgements relating to NZ IFRS 16 refer to the Changes in Significant Accounting Policies (Note 3a), and the disclosure notes in relation to Leases (Note 21)."

Note 3 talks about changes to the balance sheet. But in note 21 there appears the following table:

	2020
2020 Leases Under IFRS16
Interest on Lease Liabilities	$1.412m
Expense Related to Short Term/Low Value Leases	$0.219m
Depreciation of Right-to-use Asset	$5.619m
2019 Leases Under NZ IAS 17
Lease Expense	$6.136m

Now what I think this table is saying is that under IFRS16, the total lease expenses are:

$1.412m+$0.219m+$5.619m= $7.250m

WHEREAS under NZ IAS 17, the lease expenses would have been $6.136m.

OK, there is an error here of mine I have identified, brought on by the layout of a table in AR2020 p31 (reproduced in the quoted text box above). That figure of $6.136m I quote above relates to FY2019, not FY2020, - even though it appears under a column header '2020'. How do I know this? Because when I go to the equivalent page in AR2021 (p29), there is no equivalent column header '2020' (it should be there reading '2021' if the two reports were consistent).

In the AR2021 report equivalent table on p29, this time looking at row headers, the two row headers read '2021' and '2020'. Now going back to AR2020, the information along the row header '2020' p29 AR2021 is exactly the same as the information alongside the row header '2020' on p31 AR2020. IOW each report is comparing lease information of the current year with the previous year, which is kind of what you expect annual reports to do.

Then on p18 of AR2020 we learn:
"The Group applied NZ IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 July 2019. Accordingly comparative information is not restated ‐ i.e. it is presented as previously reported."

The fact that 'comparative information is not restated', means that the full process of transitioning from NZ IAS17 to IFRS16 remains opaque. To someone like me trying to understand this, is extremely annoying ):-(

This means upon adopting the IFRS16 standard, lease expenses have increased by: $7.250m - $6.136m = $1.114m
As a result NPAT would reduce by 0.72x$1,114m = $0.802m.

That is rather more than the $0.44m reduction suggested on AR2020 p4. So I remain confused :-(

Because I misunderstood where the $6.136m figure in the above quoted calculation came from, the above quoted calculation is nonsense. Yet another factor causing confusion is that the rent due in any current year remains as an expense, and is not been capitalised as a 'right of use asset' alongside the longer term rental liabilities. When things get as confusing as this, I believe it is better to go back to what we do know for sure, rather than try guessing figures that we don't know.

One source of real world information that can by pass all this IFRS16 stuff (IFRS16 is simply an accounting construct that has little meaning in the day to day running of a business) is to look at the cashflow statement. Real money paid out as rent should be recorded there. Unfortunately in AR2020 for Vital, this information is not there in its entirety. $5.619m cash paid out is listed as "Principle Element of Lease Payments" (are these other payments that have been renamed for reporting purposes as lease payments?)

Right, 'back to the facts' that we know.....

AR2020 p4 tells us the overall 'answer' we seek - the NPAT impact.
"The IFRS16 impact to Net Profit after Tax ($0.44m)."
I believe that to mean that the Vital profit reduced over FY2020 because of IFRS16 by $0.44m. It should be possible to derive the missing annual rent information - that I will term 'R'- using this number, because the after tax difference effect in the two rent calculations (IFRS16 and NZ IAS17) we are told is $0.44m.

We also need to keep in mind that this unknown 'R' only captures the rent from the 'non current term' lease agreements. The current term lease agreement rent is still listed separately as an expense (I hope readers can now see how annoying all of these little details are becoming). Bringing all of this information together, produces an exercise in algebra to solve for the missing rent - if I haven't made another mistake which is not guaranteed! (to see where I pulled these numbers from look at the first quoted text above):

$0.44m = 0.72[($7.250m -(R + $0.219m)]
=> $0.611m = $7.031m - R
=> R = $6.420m

Add onto that the 'current period rent' and I get a 'total rent contracted' rent bill over FY2020 to be: $6.420m + $0.219m = $6.639m

The comparative figure for FY2019 under NZ IAS 17 was $6.136m (AR2020 p31). So my figure for rent payable over FY2020 of $6.639m passes the 'in the ballpark' test, even if it is 8% higher.

As a double check, I took the $6.136m of 'rent' from FY2019 that was back referenced from AR2020 and tried to find it in AR2019. But I couldn't find it :-(. And that leaves me feeling both stupid and annoyed at the same time. ):-(

SNOOPY

P.S. Just in case any readers are wondering why any of this matters, unless I solve this, it means that I can't adjust the profit figures from FY2021 and FY2022 back to pre-IFRS16 figures either. And why do I need to do that? Because the banks do not accept IFRS16 compliant profit reporting, even though it is the current accounting standard!

From AR2021 p28
"The secured bank loans are subject to various covenants such as debt coverage and interest coverage. Throughout the year the Company has complied with all debt covenant requirements. With the implementation of NZ IFRS 16 all covenants are calculated exclusive of NZ IFRS 16."

[Snoopy]

Just in case any readers are wondering why any of this matters, unless I solve this, it means that I can't adjust the profit figures from FY2021 and FY2022 back to pre-IFRS16 figures either. And why do I need to do that? Because the banks do not accept IFRS16 compliant profit reporting, even though it is the current accounting standard!

From AR2021 p28
"The secured bank loans are subject to various covenants such as debt coverage and interest coverage. Throughout the year the Company has complied with all debt covenant requirements. With the implementation of NZ IFRS 16 all covenants are calculated exclusive of NZ IFRS 16."

It looks like I have been thrown a lifeline by Vital itself, in my quest to get around IFRS16 distortions

From AR2022 p6:
"The Company’s results are complicated by IFRS 16 Accounting for Leases, which means that rent expense on the sites leased is predominantly shown under Depreciation (and partly in Net Interest) in the Financial Statements. The following Summary Financial Performance restates the composition of the Income Statement to reflect what the directors believe better represents the economic performance of the Company in the sense of EBITDA in relation to free cash flow (noting that EBITDA is a non-GAAP accounting measure)."

This is effectively a two fingered salute to the current accounting standards, as my translation from the above paragraph written in 'accounting speak' into plain English will reveal.

"The published accounts are bollocks and give an inaccurate picture of the business. So we have gone back to the old accounting standards and redrafted the accounts 'as they should be' ourselves."

So how does the 'new' income statement presentation compare with the accounting body sanctioned one?

Income Statement FY2022	Vital Presentation {A}	IFRS Sanctioned Presentation {B}	Difference {A}-{B}
Revenue	$31.456m	$30.719m
add Other Income		$0.737m
less Staff Costs	$9.878m
less Other Selling General/Admin Costs	$8.264m
less Administrative Expenses		$12.494m
less Operating Costs (excluding D&A)		$8.283m
less Lease/Rent Costs	$7.691m
equals EBITDA	$5.623m	$10.679m	-$5.056m
less Depreciation	$6.745m	$6.258m	$0.487m
less Amortisation on Right of Use Asset		$5.072m
equals EBIT (operating)	-$1.123m	-$0.651m
less Impairment Charge	$17.038m	$17.038m
equals EBIT (reported)	-$18.161m	-$17.689m
less Net Finance Cost	$0.673m	$2.194m	-$1.521m
equals Net Profit Before Tax	-$18.834m	-$19.883m
add back Income Tax refund	-$0.503m	-$0.790m
equals Net Profit After Tax	-$18.331m
less Lease Adjustment Accounting Loss after tax	-$0.762m
equals Net Profit After Tax (reported)	-$19.093m	-$19.093m

Discussion

Both sides add up to the same ultimate number, which is always a good start.

EBITDA is considerably greater on the IFRS side. This is to be expected, because IFRS16 introduces an artificial construct called a 'Right of Use' asset that is amortised. This 'right of use asset' may be thought of as a reflection of a capitalised rent contract (IFRS16 requires companies to captalise any long term rental contracts in this way) . Through the years, this long term 'Right of Use' asset is amortised annually. However, in the 'Vital' way of looking at things, this 'Right of Use' asset does not exist. And because it does not exist, there is no long term asset relating to 'rent' to amortise each year. This explains why the EBITDA (where 'A' stands for the amortisation that we have been discussing) is so much higher on the IFRS approved side of the table.

Depreciation is $0.487m different from each perspective. I do not understand why this should be so.

Moving on to 'net finance cost', the operating cost of 'rent' in the Vital view is seen as a 'lease expense' (a financial 'interest cost' under IFRS16). This 'Interest expense on lease liabilities' of $1.588m may be found under Note 11 of AR2022. Nevertheless $1.588m is not quite the same difference in 'net financial cost' as found in the table above of $1.521m. I am unsure why there is a discrepancy.

The FY2022 'Amortisation of the Right to Use' of $5.072m when added to the 'lease expense' of $1.588m comes to $6.660m. This adds up to less than the $7.681m rent charge on the Vital side of the table. This surprises me, because although both methods of treating rents over the length of any rent contract are equal, the IFRS16 method tends to see these costs front loaded. That in turn reduces company profits in the early years of a rent contract. I can think of two possibilities to explain this unexpected result.

1/ On average we are in the latter years of these rent contracts, not the early years.
2/ It is a fact that for some reason this IFRS16 treatment of 'right of use assets' excludes 'current year rent contracts' that are separately expensed (AR2022 note 23a ii. - Why this is allowed to happen, I do not know). So it may be that such contracts need to be added back separately to get a like with like comparison between methods.

Finally there is the 'Lease Adjusted Accounting Loss' that squares up both the totals on the second to last line. But is it the lease that is being adjusted? (IOW changes in leasing arrangements were renegotiated during the year). Or is it the way that information is being fed into the accounts that is being adjusted? I find this adjustment ambiguous.

Regardless of how or why all this tabled information fits together, Vital have given shareholders a clear message that the representative after tax profit (excluding the goodwill adjustment) for FY2022 was:

-$18.331m + $17.038m = -$1.293m

There are still a few unanswered questions in this analysis. Fortuitously Vital have done a comparative redraft for FY2021 as well. So I am going to look at that too, in the interests of trying to learn more.

SNOOPY

[Snoopy]

There are still a few unanswered questions in this analysis. Fortuitously Vital have done a comparative redraft for FY2021 as well. So I am going to look at that too, in the interests of trying to learn more.

Income Statement FY2021	Vital Presentation {A}	IFRS Sanctioned Presentation {B}	Difference {A}-{B}
Revenue	$35.239m	$34.559m
add Other Income		$0.681m
less Staff Costs	$9.117m
less Other Selling General/Admin Costs	$8.208m
less Administrative Expenses		$11.386m
less Operating Costs (excluding D&A)		$7.920m
less Lease/Rent Costs	$8.057m
equals EBITDA	$9.858m	$15.934m	-$6.076m
less Depreciation	$7.824m	$7.306m	$0.518m
less Amortisation on Right of Use Asset		$5.642m
equals EBIT (operating)	$2.034m	$2.985m
less Impairment Charge	$0m	$0m
equals EBIT (reported)	$2.034m	$2.986m
less Net Finance Cost	$0.618m	$1.822m	-$1.204m
equals Net Profit Before Tax	$1.416m	$1.164m
less Income Tax	$0.397m	$0.323m
equals Net Profit After Tax	$1.019m
less Lease Adjustment Accounting Loss .after tax	-$0.178m
equals Net Profit After Tax (reported)	+$0.841m	+$0.841m

Discussion

Both sides add up to the same ultimate number, which is always a good start.

EBITDA is considerably greater on the IFRS side. This is to be expected, because IFRS16 introduces an artificial construct called a 'Right of Use' asset that is amortised. This 'right of use asset' may be thought of as a reflection of a capitalised rent contract (IFRS16 requires companies to captalise any long term rental contracts in this way) . Through the years, this long term 'Right of Use' asset is amortised annually. However, in the 'Vital' way of looking at things, this 'Right of Use' asset does not exist. And because it does not exist, there is no long term asset relating to 'rent' to amortise each year. This explains why the EBITDA (where 'A' stands for the amortisation that we have been discussing) is so much higher on the IFRS approved side of the table.

Depreciation is $0.518m different from each perspective. I do not understand why this should be so.

Moving on to 'net finance cost', the operating cost of 'rent' in the Vital view is seen as a 'lease expense' (a financial 'interest cost' under IFRS16). This 'Interest expense on lease liabilities' of $1.203m may be found under Note 11 of AR2022. $1.203m is the same difference in 'net financial cost' between the two reporting scenarios as found in the table above of $1.204m (within the bounds of rounding error).

The FY2021 'Amortisation of the Right to Use' of $5.642m when added to the 'lease expense' of $1.203m comes to $6.845m. This adds up to less than the $8.057m rent charge on the Vital side of the table. This surprises me, because although both methods of treating rents over the length of any rent contract are equal, the IFRS16 method tends to see these costs front loaded. That in turn reduces company profits in the early years of a rent contract. I can think of two possibilities to explain this unexpected result.

1/ On average we are in the latter years of these rent contracts, not the early years.
2/ It is a fact that for some reason this IFRS16 treatment of 'right of use assets' excludes 'current year rent contracts' that are separately expensed (AR2022 note 23a ii. - Why this is allowed to happen, I do not know). So it may be that such contracts need to be added back separately to get a like with like comparison between methods.

Finally there is the 'Lease Adjusted Accounting Loss' that squares up both the totals on the second to last line. But is it the lease that is being adjusted? (IOW changes in leasing arrangements were renegotiated during the year). Or is it the way that information is being fed into the accounts that is being adjusted? I find this adjustment ambiguous.

Regardless of how or why all this tabled information fits together, Vital have given shareholders a clear message that the representative after tax profit for FY2021 was $1.019m.

SNOOPY

[Ferg]

Depreciation is $0.518m different from each perspective. I do not understand why this should be so.

Nice work Snoopy but the depreciation line in the P&L immediately caught my eye and then I saw your comment. Is there any explanation given as to why this would change? That seems peculiar and not an adjustment I would expect to see moving from pre-IFRS16 to post-IFRS16 compliant. My only thought was maybe there were some leasehold improvements that have been disestablished under the new rules that have disappeared from fixed assets and they are now sitting in leased assets.....perhaps?

[Snoopy]

Nice work Snoopy but the depreciation line in the P&L immediately caught my eye and then I saw your comment. Is there any explanation given as to why this would change? That seems peculiar and not an adjustment I would expect to see moving from pre-IFRS16 to post-IFRS16 compliant. My only thought was maybe there were some leasehold improvements that have been disestablished under the new rules that have disappeared from fixed assets and they are now sitting in leased assets.....perhaps?

Yes the IFRS16 rules as applied have 'apparently' reduced depreciation (even though I agree with your assessment Ferg that it should have made no difference). A problem I see with your theory (unless I am misunderstanding what you wrote) is that moving assets from the 'fixed asset' box into the 'leased asset' box only means that instead of being 'depreciated' the asset becomes 'right of use amortised'. And I don't think Vital distinguishes between 'depreciation' and 'amortisation'. AR2022 p31 states the "Depreciation of a Right of Use Asset" when they must mean "Amortisation of a Right of Use Asset".

I have been reading the report again. On p6 of AR2022, where the depreciation is outlined from the 'Vital' perspective, the sub note referring to depreciation says:

"Excludes IFRS 16 adjustments resulting from changes to lease profiles."

If a customer relationship was lengthened by mutual agreement, as an example, then with disestablishment happening later, the depreciation on the mutually required equipment that was bespoke to that customer would have to be slowed down. IOW the equipment would be depreciated over five years (say) and not four. Of course, such a change would not affect cashflow. And Vital seems very clear that it sees cashflow as important.

Again from AR2022 p6:
"The following Summary Financial Performance restates the composition of the Income Statement to reflect what the directors believe better represents the economic performance of the Company in the sense of EBITDA (Adjusted) in relation to free cash flow."

So the change I described would produce lower 'depreciation' from an 'external accountant perspective'. But because it did not affect the budgeted for depreciation at the time the deal was struck (the operational performance), then Vital has chosen to ignore it. Of course, none of what I am discussing here has any connection to IFRS16....

SNOOPY

[Ferg]

And I don't think Vital distinguishes between 'depreciation' and 'amortisation'.

But there are separate lines in your analysis for Depreciation on fixed assets and Amortisation of right to use assets - did you source those from the AR or somewhere else?

The terms "depreciation" and "amortisation" can be used interchangeably so if either phrase is used to describe the reduction in value of leasehold assets, then consider it a spreading of the "IFRS16 cost" of the leasehold asset over its useful life. Do not get hung up on the word that is used.

Convention is that 'depreciation' is used for fixed assets, 'amortisation' is used for intangible assets and leasehold assets can use either phrase. The most important aspect is the amortisation and/or depreciation of leasehold assets are bundled together under the heading "xxx of leasehold assets" in the P&L.

If an item is classified as (or reclassified as) a leasehold asset, then the associated spreading of the cost will be under the "xxx of leasehold assets" in the P&L. However, prior to the introduction of IFRS16 the cost of leasehold improvements (such as office changes, new despatch office etc) was classified as a fixed asset and it was depreciated as a fixed asset which shows on the depreciation line. That may no longer be the case under IFRS16.

So if a leasehold asset was transferred from fixed assets to leasehold assets, then the depreciation charge would reduce given the fixed asset no longer exists from an accounting perspective (which is what you observed) but it has been replaced with an intangible asset. So the amortisation of the right to use assets would increase (relative to not doing the transfer or reclassification). The quickest way to determine if this happened would be to find the 2021 comparative values for fixed assets notes in the AR for 2022, and compare those to the values that were originally used in the AR for 2021. If the comparative values in AR2022 vary to the AR2011, there is your answer. If they don't then it is something else.

[Snoopy]

But there are separate lines in your analysis for Depreciation on fixed assets and Amortisation of right to use assets - did you source those from the AR or somewhere else?

The 'amortisation' for FY2022 that I put in my comparison table was listed as a 'Depreciation of Right‐to‐use Asset' $5.072m (p31 AR2022). I made an 'executive analyst decision;' to rename it as amortisation, because I regard a 'Right of Use Asset' as a theoretical construct (i.e. not a tangible asset). I am more comfortable to see an intangible asset amortise, rather than depreciate.

Somewhat confusingly, in the same annual report, but this time under Note 8 'Operating Costs' p21, we see 'Amortisation on Right of Use Assets' was noted as $5.072m.

The terms "depreciation" and "amortisation" can be used interchangeably so if either phrase is used to describe the reduction in value of leasehold assets, then consider it a spreading of the "IFRS16 cost" of the leasehold asset over its useful life. Do not get hung up on the word that is used.

Convention is that 'depreciation' is used for fixed assets, 'amortisation' is used for intangible assets and leasehold assets can use either phrase. The most important aspect is the amortisation and/or depreciation of leasehold assets are bundled together under the heading "xxx of leasehold assets" in the P&L.

I very much appreciate your clarification. The bit in bold about leasehold assets being either amortisable or depreciable I did not know about. I am fairly sure that I have seen 'Right of Use Assets' amortised before in other reports, which is why I changed the label for my Vital analysis. However, as I have noted above, Vital seem quite relaxed about using either term. They have used both the terms 'depreciation' and 'amortisation' to describe the same thing in the same report! How crazy is that?

If an item is classified as (or reclassified as) a leasehold asset, then the associated spreading of the cost will be under the "xxx of leasehold assets" in the P&L. However, prior to the introduction of IFRS16 the cost of leasehold improvements (such as office changes, new despatch office etc) was classified as a fixed asset and it was depreciated as a fixed asset which shows on the depreciation line. That may no longer be the case under IFRS16.

So if a leasehold asset was transferred from fixed assets to leasehold assets, then the depreciation charge would reduce given the fixed asset no longer exists from an accounting perspective (which is what you observed) but it has been replaced with an intangible asset. So the amortisation of the right to use assets would increase (relative to not doing the transfer or reclassification). The quickest way to determine if this happened would be to find the 2021 comparative values for fixed assets notes in the AR for 2022, and compare those to the values that were originally used in the AR for 2021. If the comparative values in AR2022 vary to the AR2011, there is your answer. If they don't then it is something else.

OK so now we are looking at the 'depreciation/amortisation of leasehold assets' for FY2021, and the balance sheet representation of the underlying assets. I compare the figures quoted in AR2021 with the reference retrospective view of the same thing in AR2022.

Operational Expenses FY2021	from AR2022 (Note 8, p21)	from AR2021 (Note 8, p20)
Amortisation of Right of Use Assets	$5.642m	$5.642m
Depreciation of Network Assets	$7.306m	$7.306m
Premisis Expenses	$0.143m	$0.143m

Balance Sheet FY2021	from AR2022 (Balance Sheet, p15)	from AR2021 (Balance Sheet, p13)
Property Plant & Equipment	$44.550m	$44.550m
Right to Use Asset	$19.157m	$19.157m

Conclusion: "It is something else' (?)

SNOOPY

[Ferg]

OK so now we are looking at the 'depreciation/amortisation of leasehold assets' for FY2021, and comparing that figure quoted in AR2021

Not quite. Per my post:

fixed assets notes in the AR for 2022

You are looking for the note in the AR under the fixed assets heading (assuming there in one, I have not looked) where they show cost and accumulated depreciation with opening values, additions, disposals, depreciation/amort etc and closing balances for various asset categories. It will be quite a long and detailed boring note. You are not looking in the P&L for this reclassification. The easiest way to find it is find the Balance Sheet in the AR, locate the line "fixed assets", and there will be a note number on that line - it will be something like note 16 or note 24 etc. Then find that particular note in the notes.

If the comparative values have changed in that note, then you have possibly found the answer.

[Ferg]

Nice detective work. But the loop is not quite closed. Per post #893 you had 2021 depreciation at $7.8m in the left hand column. However the 2021 notes to the accounts had depreciation of $7.3m per post #897. This suggests the $7.3m in the right hand column per post #893 is correct. I (mistakenly?) thought the $7.8m was the true or correct figure - I have not looked at the AR's. So something still does not tie up.

If the $7.3m is from the actual 2021 AR, where did the $7.8m come from? If that was a "presentation" rather than the AR, then it appears they are making pro-forma adjustments to the presentation comparatives...I would say perhaps for leasehold improvements? IOW they acquired some leasehold improvements in that year which were immediately classified as leasehold assets, but under the old method they would have been depreciated. I wonder if that is what they did?

But the more I look at post #893, the more I think the comparatives are a dog breakfast. Even the 2 opex lines shown 2 different ways do not sum to eachother.....oh dear. And the tax provision changes. There are a lot more moving parts than I anticipated. That can only be solved if they supplied detailed notes behind that "presentation" to show how they derived that version / interpretation.

[Snoopy]

Nice detective work. But the loop is not quite closed. Per post #893 you had 2021 depreciation at $7.8m in the left hand column. However the 2021 notes to the accounts had depreciation of $7.3m per post #897. This suggests the $7.3m in the right hand column per post #893 is correct. I (mistakenly?) thought the $7.8m was the true or correct figure - I have not looked at the AR's. So something still does not tie up.

$7.306m is the depreciation over FY2021 signed off by the auditors.

If the $7.3m is from the actual 2021 AR, where did the $7.8m come from? If that was a "presentation" rather than the AR, then it appears they are making pro-forma adjustments to the presentation comparatives...

The $7.824m depreciation for FY2021 comes from exactly the same document, -the same annual report for FY2022-, not a presentation. In the discussion by the directors, before you come to the officially sanctioned figures, a 'Summary Income Statement' is presented, on p6.

From p6
"The following Summary Financial Performance restates the composition of the Income Statement to reflect what the directors believe better represents the economic performance of the Company in the sense of EBITDA in relation to free cash flow (noting that EBITDA is a non-GAAP accounting measure)."

This means shareholders reading the Annual Report come to the 'Summary Income Statement' first, which is different to what the auditors have signed off in the annual accounts. The implied hint being that:

'We the management have included the audited annual accounts because we have to. But actually shareholders should ignore that and read our own Summary Income statement instead.'

It really is quite extraordinary to see a whole 'alternative income statement' presented in this way. I have been around the markets a while now and I don't ever recall seeing such a thing.

But the more I look at post #893, the more I think the comparatives are a dog breakfast. Even the 2 opex lines shown 2 different ways do not sum to each other.....oh dear.

Yes,

Management Preferred Statement: $9.117m (Staff Costs) +$8.208m (Other selling general admin costs) = $17.325m
Accounts Audited Statement: $11.386m (Administrative expenses) + $7.920m (Operating Costs) = $19.306m

(where 'Operating costs -excluding D&A' - are from Note 8: $20.868m-$7.306m-$5.642m = $7.920m)

The two totals don't match.

And the tax provision changes.

Yes, you would think a company would know how much tax they were due to pay for a financial year that is all wound up. But there are two alternative tax figures shown:

$0.397m (management) or $0.323m (audited)

There are a lot more moving parts than I anticipated. That can only be solved if they supplied detailed notes behind that "presentation" to show how they derived that version / interpretation.

Explanation as to why management have re-presented their accounts p6 AR2022:

"The key adjustment relates to how lease/rent costs are reallocated from the Depreciation and Net Interest categories into the Lease/rent costs line prior to EBITDA (Adjusted). This is to reflect the fact that lease/rent costs are cash costs while depreciation is traditionally a non-cash charge against prior costs."

Note that $1.588 million of the Lease/rent charge relates to Net Interest expense on leases/rent agreements ($1.203 million in FY2021)."

SNOOPY