Next week's update, page-18

I had earlier recorded CCP's guidance and performance metrics since FY2012, so I paste them below. In that time the April or May guidance usually matched or exceeded the earlier guidance. Often the top of the guidance remained static, but the bottom of the range was increased to signify greater certainty. The final results tended to be a little better than the last guidance for the year.

I hope the line spacing turns out to be OK. Sometimes the preview looks fine, but not the final post. PS - just as I thought, the final spacing is stuffed - unlike what it looked like in the preview.

FY2012
................................... Initial............ Updated........... Updated....... Guidance...... Actual
................................. Guidance........ Nov 2011........ Feb 2012...... May 2012.... FY2012
PDL acquisitions.... $45m-65m.... $50m-$65m.... $75m-$85m.... $84m-$88m.... $91.5m
NPAT................... $21m-$23m..... $23m-$25m.... $25m-$27m.... $26m-$27m.... $26.6m
EPS (basic)................46c-51c............. 50c-55c.......... 55c-59c.......... 57c-59c....... 58.4c
DPS.......................... 23c-25c................................................................................. 29.0%
ROE..................................................................................................................... 23.49%

FY2013
....................................... Initial.......... Updated ..... Updated ......... Updated ........ Actual
.................................... Guidance .... Nov 2012 .... Dec 2012 ....... May 2013 ..... FY2013
PDL acquisitions ...... $50-$70m .. $70m-$90m .. $105-$125m .. $125-$130m .. $136.8m
NPAT – underlying $27m-$29m .. $27m-$29m ... $27m-$29m .. $28m-$29m...... $29.9m
NPAT – reported* ................................................. $29m-$31m .. $30m-$31m...... $32.0m
EPS (basic) underlying 59c-63c ........ 59c-63c ....... 59c-63c .......... 61c-63c ......... 65.2c
EPS (basic) reported*.............................................. 63c-67c .......... 65c-67c ......... 69.8c
DPS ............................ 29c-32c ............................................................................... 37.0c
ROE....................................................................................................................... 24.44%

* 1-off litigation $2m, or 4c per share. Actual win transpired to be 4.6c per share.
December 2012 Update confirmed in January.

FY2014
.................................. Initial ............ Updated .......... Updated .......... Guidance ....... Actual
............................... Guidance ....... Nov 2013 ........ Jan 2014 .......... May 2014 .... FY2014
PDL acquisitns .. $70-$90m... $110m-$120m .. $125m-$135m .. $135m-$140m .. $154.6m
NPAT................. $31m-$33m .... $31m-$33m .......... $33-$35m ...... $34M-$35m ... $34.8m
EPS (basic)............. 67c-71c .......... 67c-71c.............. 71c-76c ............ 74c-76c ....... 75.4c
DPS........................ 34c-37c....................................................................................... 40.0c
ROE (rounded to whole number) ................................................................................. 23%

FY2015
................................ Initial ........ Updated ....... Updated ....... Guidance ...... Actual
............................ Guidance ..... Nov 2014 ...... Jan 2015 ..... April 2015 ..... FY2015
PDL acquisitns.. $70m-$90m .. $80m-$90m .. $120-$130m .. $130-$135m .. $155.1m
Net lending....... $40m-$50m ... $40m-$50m ... $40m-$50m ... $40m-$50m ... $36.0m
NPAT................ $36m-$38m ... $36m-$38m .... $36m-$38m .... $37m-$38m ... $38.4m
EPS........................ 78c-83c ........ 78c-83c ........... 78c-83c ........... 80c-83c …...... 83c
DPS........................ 39c-42c ................................................................................... 44c
ROE (rounded to whole number) ............................................................................ 23%

The impact of buying more PDLs will have a positive impact on FY2016.

FY2016
.................................. Initial ............ Updated ........ Updated ........ Guidance ....... Actual
.............................. Guidance ....... Nov 2015 ......... Jan 2016 .... Apr May 2016 ..... FY2016
PDL acquisitions.. $90-$120m ... $125-$145m ... $185-$195m .................................
Net lending......... $30m-$40m …. $30-$40m ........ $30-$40m ...............................
NPAT.................. $40m-$42m ….. $42-$44m ....... $44-$45m ............................
EPS........................... 86c-91c ........ 91c-95c ............ 95c-97c ......................................
DPS.......................... 44c-46c ...................................................................................

As a stab in the dark, I expect management will either only lift the EPS guidance lower range by a cent to give 96c-97c, or perhaps also lift the top of the range by a cent to give 96c-98c. The final result, I think, will be at least 97c, perhaps 98c. To reduce debt, and because cash can be usefully invested in PDLs now, DPS will be held to 45c or 46c – a slightly lower payout ratio than last year.

ROE should increase, but we will have to wait until the final accounts are published to know the ROE metric. The Morningstar ROE metrics for ROE are slightly lower that those published by CCP.