I tend to disagree with most of your points above:
1) NPAT of core debt business as percent of revenue has actually increased vs pcp: 2016 19.5% 2015 18.9%
2) They always say that, but in today's release they actually say that their are signs of PDL prices easing.
3) On a revenue basis, debt buying increased by 15% in the half vs lending at 14%. I do concede on a profitability basis, the lending business is increasing profitability more quickly. This was always going to be the case of course though, as provisions are expensed up front.
4) Yes, debt has gone up significantly in recent years due to the run of strong PDL purchasing and launching the lending business. However, the company is forecasting return to positive free cash flow with resultant decrease in debt levels going forward.
5) Debt collection productivity has remained constant in Australia but has improved by a whopping 35% in the US vs pcp. So, I don't see any justification for saying staff levels are stretched but rather increasing headcount is just the consequence of growth.
Just my two cents worth, happy to discuss further.
CCP Price at posting:
$17.52 Sentiment: Buy Disclosure: Held
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