CCP will it all come crashing down in a huge heap?:
* Combination of:
1) a rising unemployment rate will limit the ability of borrowers to repay their debts, leading to a lower cash collection and
2) a potential impairment of the company's asset base as debt recoverability becomes compromised.
3) there is a limitation of its employees' ability to work at home due to privacy reasons.
4) If the company's operations were to shut temporarily (as the Australian government enacts greater social distancing laws) and staff cannot work remotely to generate income, the cash at bank of ~$19m (1H20) would not be sufficient to cover cash payments of ~$115m (1H20) as well as a dividend payment of ~$20m (1H20). As was the case in 2008-2009, higher rates of unemployment and earnings uncertainty would reduce the sustainability of current dividends.
5) Approximately 80% of existing PDL collections are from customers on payment arrangements, which serves to cushion the reliance on a human workforce during a forced lockdown. However, a material uplift in unemployment could compress this revenue stream.
6)an extended lockdown would increase operational risk and impede revenue generation
