I think, but do not know for sure, that part of the reason for CCP's SP being suppressed is that some of the reasons for CLH's current woes are seen as being sector generic by folk who do not understand the rubbery nature of accounting – namely, more net credits in the Trading Accounts, balanced by the reverse in the Balance Sheet Accounts, means a larger statutory NPAT and a stronger-looking, but illusory, Balance Sheet. generally, this may translate in the short-to-medium term to larger bonuses for management, and a higher SP while the illusion holds. Cui Bona? (to whose gain?) you might ask – for one example, I suggest management who do not stick around to wear the long-term effects of the accounting puffery.
CLH had a bonzer FY2015. From memory, significant director selling occurred. In my post dated 11/10/2015 I wrote in part:
CLH states in the FY2015 Annual Report that, “ During the year, the rate of expensing assets (Amortisation rate) averaged 42 percent over FY15 and has remained in tight range of 42-45 percent since FY11.” This means that Collections Revenue was reduced by 42% in FY2015. In contrast, CCP amortised PDLs by about 47%. CCP's relevant metrics since FY2010 are:
............................................ 2015 ...... 2014 ....... 2013 ...... 2012 ....... 2011 ....... 2010
PDL collections $K ..... 288,186 .. 288106 .. 250,369 .. 230,442 .. 205,289 .. 178,806
PDL amortisation $K .. 135,721 .. 136,242 .. 119,451 .. 108,439 .... 93,127 ... 87,609
Percentage amortised .. 47.10% ... 47.29% ... 47.71% ... 47.06% ... 45.36% .. 49.00%
The above metrics suggested to me that for a number of years CCP has, relative to CLH, understated NPAT and the value of its PDL assets, or put the other way, CLH has exaggerated NPAT and the value of the PDL assets, or, most likely, it's a bit of both. That CLH now finds collections slow should not be surprising - the PDls may be overvalued.
Anyhow, IMO, in the flow of time CCP's EPS and DPS will march onward and upward. In fact I hope the SP remains low for a while yet, because I need time to get my hands on funds to buy more to push my shareholding to where I want it to be.
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