Good news or bad news?, page-46

Well, there's two ways of approaching it.

The first would be to look at overall provisions vs actuals. To do this, you need to get the previous year's provision amount and check this against the actual that occured at the end of the FY. This gets a little confusing, so you'll need to spend some time understanding the accounting treatment.

The other way is to look at provisions (which are broken down by division) against some figures that are provided in investor presentations. Usually they provide an actual deliquency rate against each line of business, but sometimes they're not there.
(Don't look in the Annual Report for this, they only provide the aggregated amount for actual delinquency amounts/rates)

Once you have this information, you'd have to contrast it against a bank (if comparison to a bank if what you desire) and determine:
1) Does the Net Interest margin (NIM) provide a sufficient barrier, if delinquency rates hit X%? (X being the value you believe is conservative to use in this case)
2) How did this book perform during the last downturn, or over the whole credit cycle? (which can be used to derive the abovementioned 'X' value)

(No. 2 may be difficult as the division hasn't been around for a long time).

I prefer to look at the investment (in this case, in a number of loans) in their own right and determine the potential outcomes.

Also don't forget to take into account the 'warehouse' facility. This line of credit is secured by the loans within TEF. If Thorn breach their covenants, the lender gets the loan book and that's about it.
It's also why they quote figures with and without the 'trust' (I think that's how they word it).