Slide 7 clearly shows a significant decrease in expected PDL investment in FY18 in Aus. The reasons for this summarised by the company in the presentation, for example the drop in market share due to increased competitor investment.
In terms of the 'upgrade', yes investment was upgraded though still well below FY17. If CCP don't maintain or increase the level of PDL investment than profits further out for that division won't maintain or grow. Investment at or beyond thier investment hurdles translates to more collections and profit.
Conversely as reported, a 30% reduction in PDL purchases (AUS/NZ) and loss of market share to 25% from 35% average because PDLs are to expensive will hurt profit. There will be a lag, though in time reduced investment will flow through to less accounts on paymemt plans ect. Have a look at slide 23 to see the lifecycle of collection. The majority are under 2 years.
There were a lot of positives in the report however the market was expecting much more. For example, a large upgrade to purchasing expections matching FY17 which cements more earnings down the track.
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