Ho hum, ho hum – predictably better than November's Guidance. I...

Ho hum, ho hum – predictably better than November's Guidance. I love boring predictable companies, and if they have a touch of odium to them (like being a debt collector), that's a bonus.

The lower improvement in NPAT of 6% can to a degree be explained by the boost in the Loan Book, which carries a high up-front provisioning burden – I think 20%, but I am unsure if that is applied to all loans. Anyhow, CCP is withdrawing from providing SACC loans (less than $2K in value), and the announcement states that this would give a better NPAT result in H2 because of the provisioning effect.

The increase in PDL purchases at good prices confirms what CCP opined in August – i.e., PDL purchasing dynamics had improved, which is the opposite of what CLH stated then. I never believed CLH on that issue – I think it was a convenient excuse to cover other reasons to explain a relative CLH performance retreat in FY2016.

CCP's throw-away comment that PDL purchases in the USA had increased could be the harbinger of a tectonic change for the better for CCP, and it justifies CCP's patience in the USA, where it has pedalled water for a few years. Encore Capital's poor comparable performance would not have escaped CCP management's notice, so they would not have seen Encore, and other USA operators, as a threat to their USA initiative.