I really think you add value to all the stocks you comment on so...

I really think you add value to all the stocks you comment on so thank you.

This company is the only one in my portfolio where I believe my investment is based upon trust in management as the numbers are not totally a reflection of business performance.

My reasons are simple:

It seems that if they upfront provision against loans made then they incur a charge that isnt directly linked to the interest earnings.

Then the big issue there is a PDL purchase amount and then collections and at the end a carrying value of the book. Buy lots of PDL seems to mean that you will directly earn lower income until they start getting the revenue in from that book.

Add a third team of collectors - that will be a cost until collections start paying for those costs.

In one business I was involved in we had a debt manager that always seemed to get paid. She used to come in and say that a business was struggling and she was letting them not pay the amount due but will mange it back to health. The relationships she built up meant we had lower bad debt overall and people generally kept our account clear as they knew they could work with us only if they played the game. So yes debt often is attitudinal rather than ability to pay.

Auto - someone raised that as a potential concern - its irrelevant - $47 Million total book.

If you look at payers book it seems to suggest that USA has as yet not got their teeth into these new debts to collect. That is suggested as cost to collect goes up in second half estimate.

I would suggest that putting on Australian employees is an expensive process but they are doing it as well. Only offset by favorable exchange rate.

They have been investing in this business for a long time and cashflows have been negative for a few years I personally would like a rights issue or a convertible note issue just to fund some of this growth. Everyone hates dilution but this end of town doesn't get money when they need it - given that they are collecting bad debt.