True, which is why I added, "particularly because there is no advantage to err on the under-impairment side." I did not dwell on the theatrics. If one cries, "Wolf", it helps if one has a plausible dead wolf to show interested parties.
It is the theatrics that inclines me to think that CCP may not reverse any impairment when it is in its best interest to let routine accounting for collections accommodate "unexpected" collections. CCP likes to come in at the top end of guidance, and I have always believed that it holds back a little firepower to do that, or to plug a hole if things transpire to be below Managements' real expectations. All well run companies do this, IMO.
One of the cautionary points that Ord Minnett made in the opinion piece at https://www.fnarena.com/index.php/2020/07/29/credit-corp-can-circumvent-current-crisis/ was, "PDL sales are expected to accelerate with the company enjoying an increase in market share in Australia, although this is is also necessary to underwrite earnings into FY22 and beyond. I think that PNC and CLH are unlikely to soak up any meaningful PDLs for some years, if ever, and Baucorp is no longer a competitor. CCP should have a good run in Australasia for more than a year or two when PDL supply is expected to increase.
CCP Price at posting:
$19.19 Sentiment: Hold Disclosure: Held
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