Pioneer Credit Ltd · ASX:PNC
Pioneer Credit — FY2024 Earnings Presentation
27 slides from Pioneer Credit's earnings presentation, Aug 30, 2024
Slide 1: FY24 Results and Guidance
FY24 Results and Guidance 30 August 2024
Slide 2: Important Notice: Disclaimer
Important Notice: Disclaimer This presentation has been prepared by Pioneer Credit Limited (“Pioneer” or the “Company”). Disclaimer: This presentation contains information about Pioneer’s activities current as at the date of the presentation and should not be considered to be comprehensive or to com
Slide 3: FY24 Highlights
FY24 Highlights
Slide 4: FY24 Financial Highlights
FY24 Financial Highlights Cash Collections1 EBITDA2 EBIT3 NPAT2 $145.0m $99.5m $35.3m $1.2m FY23: $132.6m FY23: $86.1m FY23: $31.2m FY23: $0.2m ▲ 9% ▲ 16% ▲ 13% ▲ >100% Note: 1. Includes payments classified as other income 2. Normalised for non-recurring refinancing and other expenses (comparative f
Slide 5: FY24 Portfolio Highlights
FY24 Portfolio Highlights PDP Investment ERC PA Portfolio PDP Asset $93.7m $641.7m $440.9m $322.9m FY23: $59.2m FY23: $567.5m FY23: $456.9m FY23: $304.3m ▲ 58% ▲ 13% ⯆ 4% ▲ 6% 5
Slide 6: FY24 in Review
FY24 in Review FY24 results reflect steps taken to strengthen and position Pioneer for sustained profitability Key FY24 Initiatives • Reduced cost of capital by unwinding expensive funding following settlement of a four-year $272.5m senior syndicated debt facility • Precautionary $17.8m impairment t
Slide 7: Precautionary Impairment
Precautionary Impairment Precautionary impairment of 5% or $17.8m of PDP Assets has been applied proportionally across the portfolio Precautionary impairment is consistent with economic data and market commentary (see Appendix P23) indicating consumer financial stress • Consumer confidence at multi-
Slide 8: Deferred Tax Asset
Deferred Tax Asset DTA of $21.4m recognised in FY24; with $14.6m to be recognised at a later date Prudent recognition of DTA based on current 3-year forecast • Continue to assess 3-year forecasts and will recognise balance of DTA as appropriate AASB 112 deals with the treatment of a DTA • AASB 112.3
Slide 9: FY24 Financial Performance
FY24 Financial Performance
Slide 10: FY24 Profit or Loss
FY24 Profit or Loss Profit or Loss ($’m) FY23 FY24 Opening loss to Normalised NPAT PDP income 77.4 83.6 Loss (Inc. Refinance - Extinguish Old Other One Off Normalised Precautionary impairment 0 (17.8) Impairment) DTA New Facility Facility Costs NPAT 1 Other income 5.3 5.3 $1.2m Total income 82.7 71.
Slide 11: FY24 Balance Sheet
FY24 Balance Sheet Balance Sheet ($’m) Jun-23 Jun-24 Debt Funding (Current) Cash and cash equivalents 8.4 4.1 Facility Type Limit Drawn Available Term Expiry Trade and other receivables 1.5 4.3 Senior Syndicated Tranche 1 222.5 222.5 - Jul-28 PDP assets at amortised cost 304.3 322.9 Senior Syndicate
Slide 12: About Pioneer
About Pioneer
Slide 13: About Pioneer
About Pioneer • Pioneer is a debt recovery specialist that acquires and services retail Purchased Debt Portfolios (“PDPs”) • PDPs are mostly acquired from banks, financial institutions and non-bank lenders; and are held on balance sheet • Pioneer is a leader in the Australian PDP market; with a duop
Slide 14: Pioneer's Growth Opportunities
Pioneer’s Growth Opportunities High barriers to entry and a changing landscape is presenting opportunities to increase market share Pioneer Market Position Pioneer Growth Opportunities • Pioneer is one of few scaled participants with access to funding to take • Performing portfolios: Acquire perform
Slide 15: PDP Investment
PDP Investment Strong investment growth, growing cash collections performance to drive sustainable profitability PDP Investment Overview PDP Investment and Cash Collections • PDP historical investment $739m across ~760k accounts; $145m o Extensive performance data for underwriting $133m o No payday
Slide 16: Historical returns from PDP Investments
Historical returns from PDP Investments Forecast Money Multiples Underwriting Multiple vs. Total Money Multiple • Underwriting (‘U/W’) is the forecast set at portfolio acquisition • Money Multiple (‘MM’) is the gross multiple return on invested capital • Product mix has an impact on the MM’s 3.7 o c
Slide 17: PDP Investment and ERC
PDP Investment and ERC Diverse vendor base with no concentration risk and core product discipline to ensure capital safety PDP Investment by Vendor1,2 (FY22-FY24) ERC by Product Type 5% 3% Bank 1 6% 20% Bank 2 10% Bank 3 24% Credit Cards Personal Loans 39% Bank 4 5% 20 vendors in FY24 Regional Banks
Slide 18: Alignment to Shareholders
Alignment to Shareholders Tested and experienced management are aligned to shareholders and incentivised to deliver long-term sustainable growth Company Ownership Shareholdings # Shares % Holding Keith John Entities 17.3m 12% Other Board and Management 2.4m 2% Samuel Terry Asset Management 21.5m 15%
Slide 19: Outlook
Outlook
Slide 20: FY25 Outlook and Guidance
FY25 Outlook and Guidance Strong tailwinds for Continued industry Realise operating Tested and Experienced FY25 Guidance PDP opportunities regulatory focus leverage Management o Near-term opportunities o A strong compliance record o CRM replacement o Extensive experience ➢ PDP Investment >$80m from
Slide 21: Bridge to FY26 LTI Target
Bridge to FY26 LTI Target $7.5m $18.1m $1.9m $9.0m ($3.3m) $2.0m $1.0m FY25 Guidance Operational Interest Savings Costs Savings Efficiency Gains Net Revenue FY26 Hurdle Expenses Growth 21
Slide 22: Appendix
Appendix
Slide 23: Economic Data and Market Commentary
Economic Data and Market Commentary Economic Indicator Commentary Forecasts Source • Consumer confidence remains low due to persistent economic uncertainty, including • Expected to remain subdued concerns about inflation and interest rates. throughout FY25 as households • Westpac-Melbourne Institute
Slide 24: Pioneer's Strengths
Pioneer’s Strengths Value Summary • Increasing barriers to entry, tightening compliance, and regulatory scrutiny create a strong advantage for Pioneer Top Australian Player • Strong growth opportunity; tightening economy driving increased PDP supply with full employment underpinning revenue • #2 pur
Slide 25: Customer Outcomes and ESG
Customer Outcomes and ESG Strong NPS1 demonstrates our genuine care for our customers NPS Measuring Customer Experience Differentiated Approach • Performance: A servicing model that drives customer engagement, cash collections and +21 (50) First Contact +8 New Payers +34 Ongoing Payers +38 Settled P
Slide 26: Board of Directors and Executive Leadership
Board of Directors and Executive Leadership Non-Executive Directors Executive Management Steve Targett (Non-Executive Chairman) Keith John (Managing Director) • Formerly CEO RACQ Bank, ANZ Japan and Europe, Chair • Founder of Pioneer Credit P&N Bank and NED at Clydesdale Bank, National Bank of NZ, C
Slide 27: Oionee
Oionee cer