Roops, your assumption is correct, I've got a lot of familiarity with the way CH was run back into Colin Day's time. I'm now mostly invested into the small loans arena, but the collections industry is small and word gets around fast.
Please keep in mind I'm not going to say too much about specific individuals as it may be perceived as defamatory.
When Matt Thomas was appointed as CEO, there was a real drive for the company to focus on technology to drive collection strategy. The reality is the Australian debt market has not matured to the level where technology is a key driver in collections. To make matters worse, the team driving this change at CH had no significant background in analytics. In my humble opinion, Matt made a great CIO, and he should have stayed in that, or similar roles.
For a collections company to be effective it needs to focus on a few key points:
* Achieving right party contact with debtors
* Purchasing debt at the right price
* Leveraging their existing portfolio as efficiently as possible to purchase more debt
* Cross referencing their existing portfolio to maximize right party contact and use this to differentiate themselves from other collections companies
* Maximizing points of contact to place pressure on debtors to pay
* Negotiating appropriate repayments so arrangements don't fall through
* Minimizing staff cost for low hanging fruit (such as incoming calls)
Technology can help with arrangement negotiation and right party contact rates, however neither of these are the result of an effective CRM. C5 is focused on the entirely wrong metrics, and does a poor job at cross referencing and has limited integration with their dialer.
Prior to the current CEO, CH had the following clear issues:
* Over-compliance. The company was virtually governed by their HR department.
* Complete lack of academic education on statistics
* Focus on the CRM development rather than on having a well used dialer
* Poor use of offshore staff to handle incoming calls (low hanging fruit)
* Complete lack of trust in offshore staff entirely
* Staff having absolutely no filter when discussing the company with 3rd parties
If you look into the ACCC's discussion on the matter, you'll find that the larger the company, the more compliant it usually is. Having a HR department governing what is ultimately an outbound sales company, makes no business sense.
The previous C level management had an unusual interest into maintaining Veda as their vendor for everything. They also seemed to have an unusual process for selecting the vendor for development of C5 and other development related projects. I'm pretty sure this is what Lev is getting at.
What I think has happened is the board realized how poorly things were managed, they appointed Rivas to the sinking ship, handcuffed him to the mast, and expected him to pull a magic escape trick before giving him any power to make decisions. I think Rivas and the board were the only people aware the ship was sinking, and the staff were oblivious that the time had come for change. I think it takes a lot of balls for Rivas to take on the role that he did.
What you're seeing now is the end of a purge which will should yield a productive 2018 for CH.
CLH Price at posting:
$1.40 Sentiment: None Disclosure: Held
