• Cash Collections: Increased to $71.5 million, up a couple of percent half on half.
• EBITDA: Statutory basis at $47.6 million, flat half on half when normalized.
• EBIT: Increased significantly to $22 million during the period.
• Net Profit After Tax: $3.6 million for the half, aligning with guidance for $9 million for the full year.
• PDP Investment: Nearly $30 million for the half year, with guidance of $90 million for the full year.
• Estimated Remaining Collections (ERC): Up 5%.
• PA Portfolio: Slightly decreased to $431 million.
• PDP Asset: Increased by 2% to $329 million.
• Total Income: Grew to $47.9 million.
• Impairment Gain: $3.8 million on the portfolio.
• Cost of Service: 36%, within the target range of 35% to 37%.
• Total Assets: Increased to $370.7 million.
• Total Liabilities: Decreased to $314.9 million.
• Net Assets: Increased to $55.8 million.
• Borrowings: $289.7 million, with $46 million in unrestricted funding available.

• Warning! GuruFocus has detected 8 Warning Signs with ASX:PNC.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Pioneer Credit Ltd (ASX:PNC) reported a significant increase in EBIT to $22 million, showcasing strong operational performance.
• The company achieved a net profit after taxation of $3.6 million for the half, aligning with their guidance of $9 million for the full year.
• Pioneer Credit Ltd (ASX:PNC) completed a senior financing debt facility with $50 million of growth funding at a reduced cost, enhancing financial flexibility.
• The company raised $10 million of equity, strengthening the balance sheet and increasing net assets by about $12 million.
• Pioneer Credit Ltd (ASX:PNC) has made significant progress on its core system replacement and data analytics platform, expected to improve decision-making and operational efficiency.

Negative Points

• The share price performance has been disappointing despite earnings growth, leading to concerns among shareholders.
• Cash balance was lower than anticipated due to timing of receivables, indicating potential liquidity management issues.
• The company faces a competitive market with fewer sellers and banks selling less, which could impact future growth opportunities.
• There is a reliance on maintaining cost discipline and operational efficiencies to achieve financial targets, which may be challenging.
• The company is involved in ongoing legal matters, such as the PwC case, which could pose financial and reputational risks.

Q & A Highlights

Q: The share price performance of the company has been disappointing considering the earnings growth and outlook. What are you doing about that? A: Keith John, Founder, Managing Director, Executive Director: We share your disappointment. We believe the share price should be materially higher. We are working with institutional funds and brokers to spread our message. If we don't see appropriate recognition and share price appreciation soon, we will explore other options to unlock value.

Q: What do you view as the biggest risks to the business? A: Keith John, Founder, Managing Director, Executive Director: The biggest risk is hubris. We operate in an environment with full employment, giving our customers the capacity to pay. We must remain disciplined in underwriting and presenting ourselves to investors and partners.

Q: Another group mentioned that the PDP market had fewer sellers, and banks were selling less. Can you comment on that? A: Keith John, Founder, Managing Director, Executive Director: This narrative is not our experience. We have substantial opportunities and have made significant investments. We focus on building a sustainable business with long-term earnings growth.

Q: Can you provide an update on the PwC matter? A: Barry Hartnett, Chief Financial Officer: The matter is set for a strategic conference at the end of March. Our council remains confident in our position, and we aim to achieve a good result for shareholders, potentially later this year.

Q: Of the $2 million in interest savings in the FY26 bridge, what assumptions are around further rate cuts? A: Barry Hartnett, Chief Financial Officer: No further rate cuts are included in that number. The savings relate to an amortizing facility expected to be paid off by the end of the financial year.

Q: What are you doing about AI in your business? A: Keith John, Founder, Managing Director, Executive Director: We have invested in modernizing our data and analytics platform. AI is part of our solutions, but we treat it carefully and see it as a business-as-usual offering that supports our existing operations.

Q: Is the forecast NPAT for this year and next year statutory or normalized? A: Barry Hartnett, Chief Financial Officer: The FY25 guidance is a normalized number, adjusted for project and refinancing costs. The FY26 number is a statutory figure.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.