Ann: 1H23 Results Presentation, page-17

The results look pretty good on the surface.

But the bear case would be that this is temporary boost from the elevated level of PDP purchasing in FY22 (~$100m). There is evidence supporting this in the fact 48% of the collections were PDP vintages purchased in the past year - where it was only 28% a year ago (1H FY22).

The problem is $100m of purchasing isn't sustainable for the company. The operating cashflow sans the PDP purchasing for the half suggest that $70m/year of purchasing is the absolute maximum right now. There's only $9m of undrawn facilities available to them and Tranche 4 needs to be paid back as they collect.

Finance costs is eating up all of the EBIT and rates (BBSY) are expected to rise a couple more times and increase this pressure. When they fall back to $60-70m/year of purchasing, what happens to collections and EBIT?

However it's done, they'll need more capital within the year.