Pioneer Credit Limited

ASX:PNC

Pioneer Credit Limited

ASX:PNC
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$0.450 (-3.2%)
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#261
Rank
3
Held by
5
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PennyPincher
Company Report
Last edited 6 years ago
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Performance (74m)
-0.2% pa
Followed by
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#Industry/competitors
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PennyPincher
Added 6 years ago
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  • Credit Corp (PDPs and PLs)
  • Panthera Finance (PDPs)
  • Baycorp (PDPs)
  • FSA (PLs)
  • Latitude Financial (PLs)
  • Pepper (PLs)
#Risks
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PennyPincher
Added 6 years ago
View author's company report
  • Pay too much for PDP and cannot generate sufficient profit from its liquidation (collection). Potential for write downs in P&L and decreased op cashflow
  • Economic downturn depresses collection levels from PDP customers and repayments from Personal Lending
  • Competition risk from well funded Public and Private companies pushes up PDP prices or results in PNC moving down PDP quality scale
  • Increasing bad and doubtful debts in Personal Lending/mispricing of loans
  • Keyman risk in Keith John (founder/MD)
#Bull Case
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PennyPincher
Last edited 6 years ago
View author's company report
  • Experienced CEO/MD who has run debt collection/financial services companies through-out the economic cycle (sold previous business to Credit Corp)
  • Board and Management have decent size holdings- 'skin in the game'. Prudent with shareholders' capital
  • Growing market share in domestic market- differentiating their offering from competition- as Banks are increasingly sensitive on reputation. Consider 'debtors' as customers
  • Market consolidation in next few years as a couple of public and private competitors coming under operational and funding pressure
  • Only purchase premium PDPs: Personal Loans, Credit Cards and recently LMI residuals. No payday loans, utilities, telco, XI debt
  • Increasing analytics capabilities to improve PDP purchasing and cash collections- showing up in recent cash collection numbers
  • New market in LMI residuals- recently spent $6-7m on ledger (paid low teens in the dollar). Estimate current market potential at $50m pa (Genworth, QBE and self insuring Banks). LMI residual customers better quality than PL/CC customers and more likely to enter into payment arrangements
  • Moving into Personal Lending- rehabilitated existing customers and others (e.g. acquired customer list from Rewardle). For example look to CCP and FSA
  • PNC estimate profit from Personal Lending could be equivalent to existing PDP business within 5 years. Currently forecasting lending book to grow to $30m by end of 2018 from standing start