Pioneer Credit Ltd · ASX:PNC
Pioneer Credit — FY2023 Earnings Presentation
23 slides from Pioneer Credit's earnings presentation, Aug 28, 2023
Slide 1: FY23 Results Presentation
FY23 Results Presentation August 2023
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: FY23 Highlights
FY23 Highlights
Slide 4: FY23 Financial Highlights
FY23 Financial Highlights • Return to Profitability: Delivered on guidance, with a return to profitability and a growth trajectory • Record Cash Collections: From recent PDP investment yielding benefits • Record EBITDA: Up 42% on FY22, as cost to service declined as business scaled $132.6m $86.1m $3
Slide 5: FY23 Financial Highlights
FY23 Financial Highlights • Quality PDP Investment: Disciplined investment; across 18 vendors, 6 new to Pioneer • Estimated Remaining Collections (“ERC”): Evidence of strong cash collections to follow • Sustainable PA Portfolio: $457m across >40k customers, underpins ERC and future cash collections
Slide 6: About Pioneer Credit
About Pioneer Credit
Slide 7: About Pioneer Credit
About Pioneer Credit We buy impaired credit • Pioneer is a debt recovery specialist that acquires and services We partner with a range of leading retail finance Purchased Debt Portfolios (“PDPs”) financial institutions to purchase outstanding debt • PDPs are acquired from major banks, financial inst
Slide 8: Board of Directors
Board of Directors Steve Targett Keith John Suzan Pervan Peter Hall Pauline Gately Non-Executive Chairman Managing Director Non-Executive Director Non-Executive Director Non-Executive Director • Formerly CEO RACQ Bank, • Founder of Pioneer Credit • Co-founder of accounting • Formerly MD at Genworth
Slide 9: Executive Leadership
Executive Leadership Sue Symmons Barry Hartnett Andrea Hoskins Ian Burnette Company Secretary Chief Financial Officer Chief Operating Officer Chief Information Officer • Over 25 years’ experience • 10 years at Pioneer across • Strategic and commercial • Over 25 years IT experience including at Autom
Slide 10: Our Purpose and Principles
Our Purpose and Principles Act with purpose Be human To put an end to Choose integrity debt stress 10
Slide 11: Australian PDP Market
Australian PDP Market High barriers to entry and changing landscapes are presenting Pioneer with opportunities PDP MARKET OVERVIEW PIONEER DIFFERENTIATION • From the Hayne Royal Commission (2017) and • Pioneer has a unique servicing approach: We work closely with the customer COVID-19, focus on cust
Slide 12: PDP Investment
PDP Investment Increase in vendor partnerships, building a solid base for growth across FY24 PDP INVESTMENT OVERVIEW PDP INVESTMENT & PRICE1 • Focus on banking and finance PDPs; controls ensure $120m 20% appropriate investment $99.5m 10% • No payday lending or lower quality receivables $100m • Diver
Slide 13: Portfolio Opportunity
Portfolio Opportunity $1.9b of receivables; $457m performing portfolio, with an inventory opportunity of $1.4bn TOTAL PORTFOLIO OPPORTUNITY PERFORMING PORTFOLIO CAGR = 10% Inventory Portfolio Figure $464m $457m $1.4bn 76% # Accounts ~170,000 $1.9bn Outstanding balance $1.4bn $377m $457m Weighted ave
Slide 14: Customer Outcomes and ESG
Customer Outcomes and ESG Strong NPS1 demonstrates our genuine care for our customers NPS MEASURING CUSTOMER EXPERIENCE DIFFERENTIATED APPROACH • Performance: A servicing model that drives customer engagement, payments +28 (29) First Contact +30 New Payers +34 Ongoing Payers +39 Settled Payers and s
Slide 15: Financial Performance
Financial Performance
Slide 16: FY23 Profit or Loss
FY23 Profit or Loss Profit or Loss ($’m) FY22 FY23 % KEY CALL OUTS PDP income 53.7 77.5 44% • Total income grows to record level Other income1 0.7 5.3 >100% • Other income is mostly remediation payments by vendors for PDPs Total income 54.3 82.7 52% across multiple products and vintages Employee exp
Slide 17: FY23 Balance Sheet
FY23 Balance Sheet Balance Sheet ($’m) Jun-22 Jun-23 KEY CALL OUTS Cash and cash equivalents 23.1 8.4 • Cash and cash equivalents of $8.4m Trade and other receivables 6.2 1.5 • FY23 includes payment for PDPs contracted in Jun-22 PDP assets at amortised cost 295.5 304.3 • Trade and other payables low
Slide 18: Financing Activity
Financing Activity Pioneer has commenced the process to reduce funding costs SENSITIVITY TO YE 30 JUN-23 KEY CALL OUTS ‘All in’ Interest Rate Interest Expense Incremental Cash Cash Balance • Average FY23 ‘All In’ interest rate was 11.0% 12.83% - Current ($31.1m) - $8.4m • All else equal, a reduction
Slide 19: FY23 Cash Flow
FY23 Cash Flow Cash Flow ($’m) FY22 FY23 KEY CALL OUTS Cash collections and receivables 106.7 138.8 • Increase in cash collections substantially funded PDP investment Trade and other payables (52.0) (47.4) • Includes ~$20.5m for PDPs contracted in Jun-22 and paid in Jul-22 Net interest paid (25.7) (
Slide 20: Cash Collections
Cash Collections Significant investment in last 12 months has shifted cash collections profile to earlier vintages CASH COLLECTIONS BY VINTAGE1 CASH COLLECTIONS OVERVIEW • Uplift in contribution from the < 1 year vintage over FY23 is driven by recent investments in performing portfolios $128.0m $118
Slide 21: Outlook
Outlook
Slide 22: Positive FY24 Outlook
Positive FY24 Outlook Continued industry Strong tailwinds for Realise operating Material uplift in Reduce cost of funds regulatory focus PDP opportunities leverage NPAT • Continued investment in • $60m PDP investment • Process commenced to • CRM replacement • Continue to implement compliance, custom
Slide 23: Oionee
Oionee cer