Ann: Investor Presentation - Market Update, page-16

The market reaction was weird. CCP put out a guidance in February, then improved it a few days ago, and the SP declined dramatically.

-------------------------30 Nov 2021 ---- 23 Feb 2022 --- 26 Apr 2022
Ledger investment-- $280–$300m --- $320–$330m -- $345–$355m
Net lending------------- $45–$55m ------ $45–$55m ----- $70–$75m
NPAT-------------------- $92–$97m ------ $92–$97m ----- $92–$97m
EPS (basic) ------ 137–144 cents -- 137–144 cents -- 137–144cents

The large increase of PDL investment reported in February 2022 could substantially be attributed to the acquisition of Radio Rentals. Other metrics did not change. The increase in PDL investment would have been in part caused by the NZ book acquired from CLH

I presume that the increase in lending reported in April 2022 sprung from a revitalisation of the lending business stat had a dramatic Covid-related slump in the demand for loans.

On NPAT and EPS, we have been told for years that CCP provisions for doubtful debts up-front. I am unsure of the percentage, but it was initially 20%, but it may have declined to circa 18.5%. The first 12 months of all loans do not make a reported profit, so the significant boost in Lending does not flow to NPAT and EPS. The profit is there, but CCP under-declares it because it can. Further, it is not unusual for CCP to hang back on changing the NPAT and EPS guidance until the last quarter.

I am more than happy to see the metrics that are relevant to F23 and beyond improve, even if NPAT and EPS stay as per the initial guidance. On FY23 and beyond, WalletWizard in the USA may be the big surprise – it is currently only offered in Illinois and Missouri, which together have about 20 million citizens (see https://www.walletwizard.com/).