Ann: Appointment of Non-Executive Director, page-2

The Announcement states in part, “Digitisation is fundamental to both the consumer lending and debt buying segments of Credit Corp. Phil’s appointment will enhance the continued execution of our technology strategy.” This prompts me to write about investing some of CCP's liquidity in digital technology.

In past posts been critical of the capital raising at a very low $12.50, but I reserved being too harsh, lest Management emerged with some earth-shattering investment into which the money could be deployed. For instance, in addition to buying CLH;s book, an opportunistic North American acquisition at an absurdly attractive price, but the latter has not happened. On drafting at least two of those posts, I was tempted to suggest an additional cash-deployment target could be investing in digital technology. This is because CCP had provided information to the effect that investing in digital technology was important and ongoing, and the two CCP-like firms that I keep an eye on, Encore Capital (https://www.encorecapital.com) and Intrum (https://www.intrum.com), echo the the same sentiment.

The Interim FY21 Report is slated for 27/07/2021. Hopefully, we might learn what Management is going to do with CCP's expensive pile of money. I underline “expensive” because the shares granted to Instos at $12.50 a share cost us earlier shareholders dearly via dilution, and although faced with the same Covid-related problem, neither Encore nor Intrum saw the need to indulge in a capital raising, in spite of operating at a much higher leverage than CCP. I think both actually bought back shares with the funds that flowed from good collections.