# PNC - Pioneer Credit



## System (1 May 2014)

Pioneer Credit Limited (PNC) is an Australian financial services provider, specialising in acquiring and servicing unsecured retail debt portfolios. 

http://www.pioneercredit.com.au/corporate


----------



## Faramir (18 August 2015)

Does anyone know anything about this company?

Christopher Joye from AFR and Smart Investor published something on Sat 8 Aug 2015, page 28 (Smart Money section).

This is a link
http://www.afrsmartinvestor.com.au/...ou_need_when_times_get_HFs2YR4m8FJgi1pEABFtfK

Read the last two paragraphs.


----------



## Faramir (18 August 2015)

I made an error. The above link is an online article which different to the newspaper article.

The newspaper article is similar to the link above but it's wording is different. Can I re type the last paragraph:


> Yet Pioneer has two challenges: properly scaling its business, given the relatively small size of the personal loan market it is focused on, and accessing longer-term funding facilities that cannot be suddenly pulled when the next recession lands. If Pioneer can apply its core distressed debt competencies to other larger sectors (e.g. Home loans) and secure committed financing, it could be the perfect business to profit from any downturn.




This does not sound like a recommendation. It speculates whether Pioneer can profit from a recession.

Anyone with any thoughts?


----------



## efoyzer (1 September 2015)

Hi Faramir 

I like the fundemental principle of the business. I think it will thrive in a recession and experience good growth. 

It may not explode in size due to the small amount of cash it would have available to buy distressed debt.

But if it is doing so well in good times, one can only imagine that would be massively improved in a downturn (which is inevitable)

Ive picked up some stock a few weeks ago and its slowly moving up


----------



## Faramir (1 September 2015)

Hi efoyzer

I am sitting on the sidelines. It has moved up. The most recent report was very good. Thank you for your input.


----------



## Klogg (19 October 2016)

Completely puzzled by PNC. At face value, it seems to present opportunity... but when one looks at the way PDL "Change In Value" (CIV) is calculated, it totally destroys any chance at determining credit quality.
Simply put, they have their own DCF, with assumptions against their PDL book. There's some adjustment of this value downwards according to presentations, but nowhere do they quantify it. This is very different to the upfront provision CCP take, followed by straight-line amortisation (I think it's straight-line...).

To date, they've performed well, but that's because NPAT is heavily dependent on CIV. Even trading at 8 times forward earnings with strong PDL investment, I just can't get comfortable.

And today, there's notification that the MD and a director sold over 1m shares each (the Director through Banksia capital) to investors at a discount to market price, even at what seems to be a low price 

There are some other investments in the company (such as an ~17% holding of Goldfields, an ADI) and some productivity investments through opex (telephone systems upgrade was $1m from memory).


----------



## Faramir (19 October 2016)

Hi Klogg
Thank you for commenting. I am still sitting on the sidelines. I'm so happy with CCP. I feel more comfortable owning CCP because it is bigger and has a proven record over PNC.

Not sure if I should consider PNC or OXF? Two different companies. Maybe I should sit on the sidelines until either I find time to do some analysis OR it is so obvious that there is a bargain in front of me???

PNC is based in WA. Now there is a downturn in WA (can't mention the R word yet), shouldn't things go better for PNC at this point of time?


----------



## Value Hunter (20 October 2016)

Would not trust the management. Aggressive accounting is always a huge red flag. Them writing up the value of their PDLs and declaring it as increased profit is very aggresive accounting chicanery designed to bolster reported earnings and push up the share price. Managements and boards that play these sorts of games are not to be trusted.


----------



## Klogg (20 October 2016)

Value Hunter said:


> Would not trust the management. Aggressive accounting is always a huge red flag. Them writing up the value of their PDLs and declaring it as increased profit is very aggresive accounting chicanery designed to bolster reported earnings and push up the share price. Managements and boards that play these sorts of games are not to be trusted.




It's not necessarily aggressive - the problem is, we can't tell.
For all I know, they're amortising the PDLs too quickly.


----------



## Ves (20 October 2016)

Klogg said:


> It's not necessarily aggressive - *the problem is, we can't tell.*
> For all I know, they're amortising the PDLs too quickly.



Agree especially with the part you have bolded.  I've looked at this one before briefly  (I believe after you mentioned it on another forum) and I couldn't make heads or tails of it either.   I honestly have the same problem with CCP,  and have avoided that one too.

Confusing accounting policies + future moment of market panic =  psychological disaster waiting to happen for me because it's too bloody hard to get a decent oversight of what is actually going on.  

However,  if you gained some expertise on these sorts of PDL companies,   that knowledge could be handy because you'd have a head start over many others.


----------



## craft (20 October 2016)

Klogg said:


> Completely puzzled by PNC. At face value, it seems to present opportunity... but when one looks at the way PDL "Change In Value" (CIV) is calculated, it totally destroys any chance at determining credit quality.
> Simply put, they have their own DCF, with assumptions against their PDL book. There's some adjustment of this value downwards according to presentations, but nowhere do they quantify it. This is very different to the upfront provision CCP take, followed by straight-line amortisation (I think it's straight-line...).
> 
> To date, they've performed well, but that's because NPAT is heavily dependent on CIV. Even trading at 8 times forward earnings with strong PDL investment, I just can't get comfortable.
> ...




Hi Klogg

I see very little difference between the two approaches, FVTPL and effective interest rate amortisation. Both basically require the same underlying assumption of cashflow amount and timing.  No way of knowing if the assumptions about the future are correct and hence current profit is economically accurate. Very difficult companies to analyse. I probably shouldn't, but I do have a recent position in PNC. CCP Possibly better business, but neither is truly knowable so price of the risk to hold comes into it for me.


----------



## craft (20 October 2016)

Ves said:


> Confusing accounting policies + future moment of market panic =  psychological disaster waiting to happen for me because it's too bloody hard to get a decent oversight of what is actually going on.




For a long term fundamental investor (which I like to think I am), this seems like the correct way of thinking.  I have to admit I have an unhealthy obsession in these debt purchase companies right from the very early days of CCP, including being blindsided by the first CCP price gap of the GFC.


----------



## Klogg (21 October 2016)

craft said:


> I see very little difference between the two approaches, FVTPL and effective interest rate amortisation. Both basically require the same underlying assumption of cashflow amount and timing.




Good point. Ultimately both need the same assumption, regardless of how they handle the accounting internally.





> I've looked at this one before briefly (I believe after you mentioned it on another forum) and I couldn't make heads or tails of it either. I honestly have the same problem with CCP, and have avoided that one too.




I keep coming back to it just because it looks so cheap. The stingy side of me just thinks I'm doing something wrong, but rationality has prevailed so far (I like to think so anyway...)





> CCP Possibly better business, but neither is truly knowable so price of the risk to hold comes into it for me.




It has a longer history, that's for sure, so there's a form of safety in that alone. That said, PNC was part of CCP at one point, so it would have had a similar culture at that time.



On a different point - looking at the history of PNC, they've only ever had an increasing about of PDL purchases (from memory). This would allow for any previous bad PDL purchases to be 'hidden' as an ever-increasing amount of PDLs can shift the Change In Value amount. I think that's right anyway...

I might just remove this from my watchlist completely and give up on it. As Ves has pointed out, it's much better to own something I can hold with certainty, rather than continuously questioning my investment thesis.


----------



## hiddencow (23 November 2016)

The main difference between amortised cost and fair value is that under amortised cost the discount rate used is always the original implicit discount rate while under fair value the discount rate can change subsequently.

Either method involves a lot of assumptions and judgements. Klogg I think when you mention that CCP take an up front provision that is only for the loan book, not for PDLs. Amortisation is calculated using the effective interest method as well so it's not straight line. More amortisation is actually recognised compared to interest revenue towards the end of the PDL life.

I've stuck with CCP because I can see how conservative they have been with their accounting over time. That's not to say they couldn't get more aggressive with it if the business falls to prop up their profits. It would be hard to pick up straight away if they did but over time it would become obvious.


----------



## Value Hunter (28 December 2016)

If you look at the 2016 annual report (turn to page 41 cash flow statement) you will see that operating cash flow actually declined compared to 2015.

Net cash inflow from operating activities
FY2016:  $24,631,000 FY2015: $28,176

Meanwhile fully diluted earnings per share (diluted e.p.s.) (page 38) increased solely due to the change in value of ledgers (accounting chicanery):
FY2016: $0.2008 FY2015: $0.1640

If you look at page 14 of the FY2016 results presentation it shows EBITDA before the non-cash Change in Value movement:
FY2016: $29.7 million FY2015: $29.7 million. i.e. flat which tends to support my view that they did not actually increase their earnings other than by revaluing their ledgers upwards. It all just seems highly suspicious to me. Meanwhile Credit Corp are always using the most conservative accounting they possibly can. Not to mention Credit Corp has better management, a stronger balance sheet, higher market share, a longer track record, a higher return on equity and better software, systems and processes. I would rather pay 15 times forward earnings for CCP than pay 10 times forward earnings for a dog like PNC. The difference in multiple is completely justified and should be greater if anything.


----------



## Muschu (14 May 2017)

A Perth broker [probably the floater?] put a buy on PNC in today's paper..... The renowned Sunday Times.  Anyway I had a look at its performance and the chart is pretty reasonable this past month and now SP $2.15 with few sellers.
Is this in the same area as CLH?
I'd never heard of PNC before and wondered if previous posters may have more postive thoughts or still wary?
I do hold both CCP and CLH btw.


----------



## craft (14 July 2017)

PNC market update this morning looks pretty robust.


----------



## Faramir (14 July 2017)

I missed the boat (again!!!) ummming and arrring, ummhing and arrhing!!! Procrastination, wait until July next year, (another year passes), wait until July next year (another year). After waiting for an opportunity for two years, I lost it. Owning CCP, I thought 'don't buy another company like CCP'. Why? Not a rational decision! Just emotionally wanted a food stock or a tech stock. I got neither and missed out on PNC.
Is there such a thing called emotional investing? No logic applied, no analysis, just going off emotions only. I hope that I am not one of those but it looks like I am becoming one??
I must have been too busy during PNC lows over the past 13 months, that I didn't take any notice, saving money or had no funds. Actually no excuse. I just missed out.


----------



## craft (14 July 2017)

Faramir said:


> I missed the boat (again!!!) ummming and arrring, ummhing and arrhing!!! Procrastination, wait until July next year, (another year passes), wait until July next year (another year). After waiting for an opportunity for two years, I lost it. Owning CCP, I thought 'don't buy another company like CCP'. Why? Not a rational decision! Just emotionally wanted a food stock or a tech stock. I got neither and missed out on PNC.
> Is there such a thing called emotional investing? No logic applied, no analysis, just going off emotions only. I hope that I am not one of those but it looks like I am becoming one??
> I must have been too busy during PNC lows over the past 13 months, that I didn't take any notice, saving money or had no funds. Actually no excuse. I just missed out.



You may have missed a bullet. PNC might not end well - it is a very difficult company to have any transparency on. Just as CCP is. Ceratinly no reason to have both.

Most likely a time will come to get out and get out quick with these types of stocks.  Umming and arring on the way in can be anoying when you don't act and it goes up. but umming and arring when you should be getting out can be much worse.


----------



## galumay (14 July 2017)

Faramir said:


> Just emotionally wanted a food stock or a tech stock.




Further to Craft's sensible comments, I used to get caught in a similar mindset, I bought ANZ & QBE because I decided I needed exposure to the finance and insurance sectors. I have since modified my investing philosophy, its hard enough to find good businesses for a price that allows a fair margin of safety to the value without adding the filter of sectors! 

Now I just concentrate my efforts on finding businesses I want to become a part owner of, and dont worry about what sector they sit in. 

Maybe look at increasing your position in CCP by buying the dips when and if they come?


----------



## Faramir (4 April 2019)

craft said:


> You may have missed a bullet. PNC might not end well - it is a very difficult company to have any transparency on. Just as CCP is. Ceratinly no reason to have both.




Things are not easy at Pioneer Credit. In less than 3 months, dropping from roughly $3.20 to $2.12 today.

ASX Announcement Trading Update 1 Apr:
Liquations: at least $120 million
PDP investment: $80 million
EBITDA: at least $65 million
NPAT: at least $20 million

@craft I listened and didn't touch PNC. In hindsight, I could have purchased two years ago and sold last year. Yet my personality tells me to loyal and hang on (even though I should have exit a long time ago). I need to change my personality - what I am like in real life, I should be different here. I like CCP but I stayed away from PNC - I just couldn't get my head around PNC.

Does anyone follow PNC???


----------



## Faramir (27 August 2019)

Trading Halt today

https://www.asx.com.au/asxpdf/20190826/pdf/447v7w2bywz4k2.pdf

They can't work how to report their profits??? Accounting change?

I am guess that not many of us are interested in PNC. I don't think I should be either. Credit Corp is much better. PNC did seem promising two - three years ago. No reason for me to hold both CCP and PNC.


----------



## Knobby22 (27 August 2019)

I think you are right Farimer. Looks like their accounting is wrong. The CFO must be a dud. Bad in a financial organisation.


----------



## Faramir (29 August 2019)

Voluntary Suspension. Wait until 2 September.

https://www.asx.com.au/asxpdf/20190828/pdf/447y5sqlyqfbcv.pdf

Classification of Amortised Cost is causing disagreements. I can't help but keep watching. What would happened if I did commit funds??? Feel sorry for existing holders. Maybe things will work out for them one day.


----------



## Value Hunter (29 August 2019)

Value Hunter said:


> Would not trust the management. Aggressive accounting is always a huge red flag. Them writing up the value of their PDLs and declaring it as increased profit is very aggresive accounting chicanery designed to bolster reported earnings and push up the share price. Managements and boards that play these sorts of games are not to be trusted.




I made that comment in October 2016. Nobody on this forum took me seriously at the time. It looks like I was eventually proven right. How can you base your ledger valuation on fair market value in Australia when there is not much of a resale market for debt ledgers? It seemed like a very sketchy proposition right from the beginning.


----------



## Faramir (2 September 2019)

@Value Hunter 
I am sure all of us did take you seriously. I certainly didn’t put anything into PNC. Despite experiencing FOMO 2-3 years ago, your warning was definitely heard. We just didn’t have that “like” button to acknowledge it like we do now.

Now they want us to wait until 30 Sept 2019!!!!!
https://www.asx.com.au/asxpdf/20190902/pdf/4484j56vhwdn6t.pdf
Did I read that correctly?
I seem to like watching train wrecks?? How did I get attracted to these types of companies in the first place? There must be something I should learn from this but this lesson is just flying over my head.


----------



## craft (2 September 2019)

Yep Train wreck, but fascinating.

I have 13,905 with a cost base of $1.795 (25k cost base). They were my initial purchase to see how PNC felt, increased the holding and then decreased as things unfolded but kept the original parcel because I have a morbid fascination with debt collector accounting.

Financially immaterial but sadly I suspect very shortly I will no longer be able to say that I have never held a company as it’s gone into administration. Bummer, a 1R loss on that parcel.


----------



## JTLP (2 September 2019)

craft said:


> Yep Train wreck, but fascinating.
> 
> I have 13,905 with a cost base of $1.795 (25k cost base). They were my initial purchase to see how PNC felt, increased the holding and then decreased as things unfolded but kept the original parcel because I have a morbid fascination with debt collector accounting.
> 
> Financially immaterial but sadly I suspect very shortly I will no longer be able to say that I have never held a company as it’s gone into administration. Bummer, a 1R loss on that parcel.




In breach of debt covenants and credit facility will not be renewed. Uh ohhh.


----------



## Value Hunter (3 September 2019)

Klogg said:


> It's not necessarily aggressive - the problem is, we can't tell.
> For all I know, they're amortising the PDLs too quickly.






Value Hunter said:


> If you look at the 2016 annual report (turn to page 41 cash flow statement) you will see that operating cash flow actually declined compared to 2015.
> 
> Net cash inflow from operating activities
> FY2016:  $24,631,000 FY2015: $28,176
> ...




I think the point that Klogg and Craft missed is that they were looking at things purely from an academic accounting point of view where a number of approaches could in theory be equally valid whereas I looked at the change in accounting methodology by the company from a behavioral and historical point of view. To me its guilty until proven innocent. I mean it seems rather too convenient that a different accounting methodology just happens to allow them to report higher profits at the exact time they decide to adopt it, no? The second point is historically speaking when companies revalue difficult to value and illiquid assets upwards to boost profits in the majority of cases it has ended badly. 

Read any books about market crashes and market history and you will plainly recognize it as one of the oldest tricks in the book used by crooked/cowboy companies e.g. Babcock and Brown, Allco finance group, etc. Whereas in many multi-generational family style businesses you see the opposite e.g. Washington H. Soul Pattinson, Schaffer corporation, etc you tend to see many assets which are greatly undervalued (at old historical costs) on the books. 

Another example is when it comes to R&D and software expenses. Conservative well managed companies always fully expense these things whereas shifty companies have a tendency to partially capitalize them.


----------



## Value Hunter (3 September 2019)

Also like I pointed out a long time ago (refer to my quote in the post above) that increase in reported profit occurred at a time when EBITDA was flat and operating cash flow went down. And as I pointed out its better to pay a reasonable (as opposed to excessive) premium (e.g. earnings multiple) for the higher quality business in the industry than to buy the lower quality one for a lower multiple.


----------



## Value Hunter (3 September 2019)

For all those on this thread I would now like to talk about a few red flags regarding Collection House which I like Pioneer Credit I would not touch with a 20 foot barge pole!

-Collection House is currently being sued by Lez Mivikovsky for defamation. Lez is one of its largest shareholders who was also a long time former director of the company. Lev generally has a good track record as a business man and is knopwn for being conservative. For example, Tamawood (TWD) a company which is a director and major shareholder in is highly profitable and has a pristine balance sheet (Cash + receivables of 9,684,000 vs total liabilities of 8,696,000). So Mr. Mivikovsky's concerns regarding should not be dismissed out of hand by investors.  

-Collection House has a history of capitalizing software development expenses, and while it may be allowable under accounting standards as I said 2 posts above its never a good sign and conservative companies always fully expense such costs.  

-Collection house has a deal with private equity Balbec Capital to resell some of the cash flows of some of its purchased debt ledgers to Balbec Capital. This activity is of a similar nature to banks writing mortgages and then securitizing them. Its a short term ploy for Collection House to front end profits. Also private equity usually demands their pound of flesh so I am suspicious if its really a good long-term deal for Collection House. Also the it creates bad behavioral incentives for Collection House both in terms of the price they pay for ledgers and also in terms of excessive focus on short-term collections before they flip the ledger to somebody else. The whole thing just smells fishy to me. 

-In its most recent results presentation Collection House said "Cash Operating expenses temporarily elevated due to acquisitions and one-off costs." If you read back through many years of results presentations by Collection House you will see it is one of those serial offender companies that seems to have extremely frequent occurrences of "one-off costs". How can "one-off" costs keep occurring every other year?

-In FY2019 e.p.s. increased 16% and NPAT by 17.5% meanwhile operating cash flow only increased 1% and EBITDA went backwards.

-Debt is rather high for a company of this type. Long + short term borrowings are $210.6 million (last reported) compared to NPAT of $30.7 million and market cap of $170 million. 

-In 2017 when the current CEO Mr. Anthony Rivas took the helms of the company introduced a range of initiatives which seemingly showed very fast improvements in key operating metrics such as collections per hour, costs of collections, return on equity, etc. One would expect in a business of this size and type such changes if they were done in a long-term and sustainable manner they would take a number of years to get results. Such quick results especially given the company's history smell fishy to me.

-4 directors resigned from the company in calendar 2017. The same year in which Lez Mizikovsky raised a number of concerns about the company and the same year in which Anthony Rivas was appointed managing director. 

-The company makes frequent references to "normalized" profit which conveniently seems to be almost always higher than reported profit. 

All of the above is aside from the fact that its continually had inferior performance in comparison to Credit Corp.


----------



## Klogg (3 September 2019)

Value Hunter said:


> I think the point that Klogg and Craft missed is that they were looking at things purely from an academic accounting point of view where a number of approaches could in theory be equally valid whereas I looked at the change in accounting methodology by the company from a behavioral and historical point of view. To me its guilty until proven innocent. I mean it seems rather too convenient that a different accounting methodology just happens to allow them to report higher profits at the exact time they decide to adopt it, no? The second point is historically speaking when companies revalue difficult to value and illiquid assets upwards to boost profits in the majority of cases it has ended badly.
> 
> Read any books about market crashes and market history and you will plainly recognize it as one of the oldest tricks in the book used by crooked/cowboy companies e.g. Babcock and Brown, Allco finance group, etc. Whereas in many multi-generational family style businesses you see the opposite e.g. Washington H. Soul Pattinson, Schaffer corporation, etc you tend to see many assets which are greatly undervalued (at old historical costs) on the books.
> 
> Another example is when it comes to R&D and software expenses. Conservative well managed companies always fully expense these things whereas shifty companies have a tendency to partially capitalize them.




To be clear, I didn't buy PNC because the accounting method was too opaque.

But I agree in principle with most of what you wrote


----------



## Faramir (7 November 2019)

This announcement mentioned a shortlist of potential companies willing to takeover Pioneer Credit. Please confirm whether or not Credit Corp is on that shortlist. Given the Pioneer Credit books maybe dodgy, how could Credit Corp or anyone else unravel it and turn things around??

https://www.asx.com.au/asxpdf/20191031/pdf/44b3m2l40ntz85.pdf

Will things get back to normal 2 December, when they will hopefully be trading?

I cannot get a sense of whether or not Credit Corp acquiring Pioneer Credit is a good thing or a bad thing. It is not a simple case of "lets takeover our competitor". Are there any hidden traps? Credit Corp taking over Pioneer Credit will mot be the same as Credit Corp taking over Baycorp for example. Even if this is just a hypothetical question, I would like to know. (There are four suitors on the shortlist.)

@Value Hunter - please correct me if I thinking incorrectly

PS: If Collection House or anyone or no one else takes over Pioneer Credit, I won't care.

There must be something positive to say Pioneer Credit??? How did I ever find out about it, let alone experience FOMO and now proposing hypothetical questions?


----------



## JTLP (7 November 2019)

Faramir said:


> This announcement mentioned a shortlist of potential companies willing to takeover Pioneer Credit. Please confirm whether or not Credit Corp is on that shortlist. Given the Pioneer Credit books maybe dodgy, how could Credit Corp or anyone else unravel it and turn things around??
> 
> https://www.asx.com.au/asxpdf/20191031/pdf/44b3m2l40ntz85.pdf
> 
> ...




I’m sure Credit Corp would have taken a look, it’s just whether the price is right to purchase the loan book / meets their ethical standards.


----------



## Faramir (5 December 2019)

https://www.asx.com.au/asxpdf/20191205/pdf/44c9vbj4m1wnty.pdf

@craft if you are still around, all is not lost. $1.82 plus special dividend.

Plenty of time for a counter bid. Don’t know much about Carlyle. Just happy that Credit Corp are not getting involved.

I was thinking a long time ago that between $1.50-$1.60 is OK to enter. Otherwise above that, I missed the boat and entered into FOMO range. This was a rough guess and no proper thought involved.

@Value Collector what are your thoughts of this deal? I need to read it. Did I waste time looking at time looking into PNC or did I learn a lesson about FOMO, dodgy accounting and avoiding land mines? Not sure if I have learnt how to avoid land mines. This is a lucky step for me because I didn’t succumb to FOMO with this one.


----------



## craft (5 December 2019)

Faramir said:


> https://www.asx.com.au/asxpdf/20191205/pdf/44c9vbj4m1wnty.pdf
> 
> @craft if you are still around, all is not lost. $1.82 plus special dividend.
> 
> ...



Hi @Faramir
$1.82 'less' special div.
It could have been worse.

I built and subsequently disposed of a position in PNC, keeping my initial 25K exposure with a thought that I may rebuild it again one day after the dust settled on accounting recognition issues. I don't really subscribe to a lot of the general wisdom/rumour spouted on the internet about PNC. But it always was a high risk exposure, I wasn't naïve to those risks.

Its fair enough to say though that the potential I brought that initial exposure for did not come to pass and I still hold that exposure. This is my clash flows for that exposure on what is essentially a failed investment thesis.

After Tax (super Environment) return of 7.68% per annum.







Assumes special dividend is paid and transaction proceeds to timeline. Its not the sort of return I target, but Its far from the end of the world either.


----------



## Value Collector (5 December 2019)

Faramir said:


> @Value Collector what are your thoughts of this deal? I need to read it. Did I waste time looking at time looking into PNC or did I learn a lesson about FOMO, dodgy accounting and avoiding land mines? Not sure if I have learnt how to avoid land mines. This is a lucky step for me because I didn’t succumb to FOMO with this one.




Hey Mate,

I don't actually follow this company, So I am not going to be much help on this one.


----------



## Faramir (6 December 2019)

Sorry, I meant @Value Hunter . I press the wrong Valuable person. :lol Actually, everyone is valuable.

@craft, I thought your buy price was higher. Thank you correcting me about that special dividend. 7.86% CARG is fantastic for a company that was looking like it was on the ropes a few months ago. I feel relief for you.

I guess I never put any 'speccy' funds into PNC mainly because I had limited funds, so none of my funds could be speccy. Credit Corp was a much superior company (from my limited point of view). I wonder if I had lots funds of 3 years ago, would have I purchased PNC? Maybe I would increased my position in CCP instead or invested in another company. I am still so vulnerable that I could make mistakes like buying PNC. Only having limited funds stopped me. (Some of my other stocks have not been good neither.) I still cannot work why or what made me interested PNC other than a simple newspaper article by Christopher Joye (Australian Financial Review). This is the one time that procrastination worked for me. I will be honest to say that I didn't understand the risks involved.


----------



## Faramir (25 March 2020)

Hi @craft 
Things are looking bad. Today it dropped to $0.31, that's 39.8% from yesterday. Things have been going not too well over the past couple of months. Recent market turmoil has not help.

Today, this announcement looks like it put a nail in their coffin. Maybe I am being too alarmist.
https://www.asx.com.au/asxpdf/20200324/pdf/44gbdpg44yw08l.pdf

This is not an update. This is saying that Carlyle might want to back out??? I think they got a raw deal??

I may as well pick PNC for the tipping comp. A4N have not served me well in terms of tipping, so I am going to choose PNC.


----------



## Dona Ferentes (25 March 2020)

having a thread with multi-year posts makes for interesting reading, and allows for vicarious 'observer status'. What do we see?
- aggressive accounting
- 'personalities'
- sustained suspension from trading (after which it never had uplift)
- hope for a white knight

And some prescient comment from 2015 that may well be still relevant 







> Yet Pioneer has two challenges: properly scaling its business, given the relatively small size of the personal loan market it is focused on, and accessing longer-term funding facilities that cannot be suddenly pulled when the next recession lands.



- guess what, recession time!

Must say this one is not travelling well.


----------



## craft (25 March 2020)

Faramir said:


> Hi @craft
> Things are looking bad. Today it dropped to $0.31, that's 39.8% from yesterday. Things have been going not too well over the past couple of months. Recent market turmoil has not help.
> 
> Today, this announcement looks like it put a nail in their coffin. Maybe I am being too alarmist.
> ...



Hi @Faramir 

I exited Pnc as soon as it restarted trading. Wasn't prepared to risk deal completion then, certainly wouldn't risk it in this market. Not following developments in this company, many better opportunities in this market.


----------



## Faramir (8 April 2020)

Just as PNC was going great for my tipping comp in April - this Trading Halt happens:
https://www.asx.com.au/asxpdf/20200408/pdf/44gt653gt5lmpp.pdf
Their “White Knight” could have picked a better looking damsel to rescue.

Oh well, I wore the yellow jersey for at least 4 trading days during April.

@Dona Ferentes I am really worried about this business. I feel sorry for its clients and front line staff. I use to believe in its ‘ethics’ about how PNC helped its vulnerable customers. Maybe I was fooled by my naivety. There seems no way out.


----------



## Dona Ferentes (8 April 2020)

Faramir said:


> this Trading Halt happens:
> https://www.asx.com.au/asxpdf/20200408/pdf/44gt653gt5lmpp.pdf
> Their “White Knight” could have picked a better looking damsel to rescue.
> 
> @Dona Ferentes I am really worried about this business. I feel sorry for its clients and front line staff. I use to believe in its ‘ethics’ about how PNC helped its vulnerable customers. Maybe I was fooled by my naivety. There seems no way out.



Trading Halt.... has all the hallmarks of Carlyle pulling out (as per the denial in response to media 25/3).... and, then, CFO moving on (06/4), mmmm? ......Red Flags (up the pole)


----------



## Dona Ferentes (14 April 2020)

_*plot thickens.*_ On 13 April, Carlyle Group issued PNC with a 27-page list of demands implying the company had been less than forthright during the due diligence process and reserved the right to demand Pioneer return the $141.6 million debt it has drawn down.

Among the defaults claimed by Carlyle Group with Pioneer Credit are "strategies employed by the company between March and August 2019", "non-compliant disclosure of information to Carlyle prior to its entry into the facility agreement" and "internal governance matters".







> _The Australian Financial Review _understands Carlyle Group is livid the company was offering large discounts to debtors in 2019 to get money in the door and is yet to appoint permanent replacements to the chief risk officer, chief operating officer and chief financial officer roles.



Pioneer Credit has denied the claims..







> "The Company is generally disappointed with Carlyle’s actions and is considering this further letter and its proposed response. Pioneer believes that it has engaged with Carlyle in good faith continuously throughout the period since the SIA was signed, providing extensive information, analysis and data and has responded to all enquiries with vigour and detail. It seems clear to the Board that Carlyle are intent on exercising maximum pressure on the Company, including using the potential impacts of COVID-19, to move from their original commitment under the SIA and either withdraw from the transaction or attempt to gain control of Pioneer for a very low price. "



_- well, der_.


----------



## Value Hunter (17 May 2020)

It seems that what I previously mentioned in this thread about the numerous red flags of both Pioneer Credit and Collection House turned out to be extremely  prescient.


----------



## james5890 (16 December 2020)

Hi Everyone;

PNC (Pioneer Credit :ASX 200) stock price has been falling constantly from last few weeks after cleansing statement announced. what could be the reason of price drop? stock price just went up before cleansing announcement. does this all activity say good or bad sign?


----------



## peter2 (17 December 2020)

coolcup said:


> A cleansing notice is a statutory notice a company must issue after placing new shares on the market. They are usually accompanied by appendix 3Bs. Their purpose is to tell the market that the company is in compliance of its continuous disclosure obligations and is not relying on any carve outs under the continuous disclosure regime. In other words the market is fully informed. This means the newly placed securities can then trade with no restrictions. Hope this helps. Above is my basic understanding but I am no lawyer.




The cleansing notice would not have caused investors to sell. It could be a few knife catchers selling to grab some profit or other holders taking the opportunity to sell after the recent rally. 

*PNC* looks to have been in big trouble during the past year.


----------



## coolcup (17 December 2020)

peter2 said:


> The cleansing notice would not have caused investors to sell. It could be a few knife catchers selling to grab some profit or other holders taking the opportunity to sell after the recent rally.
> 
> *PNC* looks to have been in big trouble during the past year.




Is there a reason you quoted my post from 7 years ago? I am trying to understand the relevance to today, I may have missed the connection. Also I'm not sure I intended to convey the cleansing notice from 7 years ago caused investors to sell.


----------



## james5890 (17 December 2020)

peter2 said:


> The cleansing notice would not have caused investors to sell. It could be a few knife catchers selling to grab some profit or other holders taking the opportunity to sell after the recent rally.
> 
> *PNC* looks to have been in big trouble during the past year.



Thanks Peter


----------



## peter2 (17 December 2020)

@coolcup  I quoted your explanation of a cleansing notice as I thought it was a good explanation.

Knowing what a cleansing notice is would make it an unlikely reason for the recent price fall in PNC. Hence my response to James5890.


----------



## coolcup (19 December 2020)

peter2 said:


> @coolcup  I quoted your explanation of a cleansing notice as I thought it was a good explanation.
> 
> Knowing what a cleansing notice is would make it an unlikely reason for the recent price fall in PNC. Hence my response to James5890.




Thank you for clarifying mate. I thought I had inadvertantly drawn a link I didn't intend to or misunderstood your note. Thanks again.


----------



## Value Hunter (1 January 2021)

Pioneer Credit is definitely still a zombie company. Still alive but in a weak position and likely to remain so for years to come.


----------



## The Cruising Investor (2 January 2021)

I bought this company years ago as a dividend stock, but after a bungled takeover, the dividends stopped and the price tumbled. I now hold well out of the money. I think the business is differently a growth industry and PNC has some good contracts, so cash flow still looks good. I would expect dividends to start again in Q2 2021(albeit much smaller than before). Once the 20 days MA crosses the 128 day MA (just my system) I will heavily dollar cost average, so my break-even point is much closer. So long as PNC gives guidance on dividends I will be a long-term hodler.


----------

