Keith joins Elisha Newell to talk about how Pioneer helps customers during serious life events and more

00:00:06:14 - 00:00:17:02
Elisha Newell
Hello and welcome back to Proactive Investors. Joining me today to introduce the Pioneer Credit story is managing director Keith John. Keith, welcome to the program. Lovely to meet you.

00:00:18:03 - 00:00:20:14
Keith John
And you too, Elisha. Thanks so much for having me.

00:00:21:09 - 00:00:27:19
Elisha Newell
Keith, give us the elevator pitch here. What is important about the Pioneer Credit story?

00:00:28:02 - 00:00:50:12
Keith John
For sure, look Pioneer Credit are an investor in customer accounts predominantly out of the banks, Elisha. Where the customers are in some form of hardship. So at 180 days, we buy those accounts at a discount off the banks, and then we work with those customers over time to get them back on track. They become our customers and we work with them to get them back on track.

00:00:50:12 - 00:00:53:09
Keith John
And that's where we earn our revenue from.

00:00:53:19 - 00:01:05:01
Elisha Newell
I understand an important part of that business model is trying to help these customers alleviate their debt stress. Can you talk to us a little bit more about the model that you've set up here?

00:01:05:01 - 00:01:24:20
Keith John
For sure. I mean, certainly, you know, banks are very good at lending money. That's what they do and they're very good at lending you the right amount of money. The customers we deal with, just like you and I, they're going about living their lives, using their credit cards and their personal loans to live and they suffer a life event, death, divorce, sickness might have lost their job.

00:01:25:06 - 00:01:44:22
Keith John
Increasingly, domestic violence. And we're much better at managing those customers and working through their situation than the banks are. So at 180 days past due so 180 days since the time that I missed making that monthly payment. The banks sell those accounts to us and we work with those customers over time to get them back on track.

00:01:46:10 - 00:02:01:13
Elisha Newell
And as you say, there are certainly a number of environmental and social factors that can compound in this debt stress scenario. One of which, of course, is the increasing interest rate rises at the moment. How should customers navigate this environment as they deal with debt?

00:02:03:01 - 00:02:24:12
Keith John
Yeah, so it's a really important question. I mean, for a lot of our customers with the very vast majority of them, that they don't own a home. So they're good people going about their lives. They don't own a home, so they're not impacted directly, but they are indirectly, obviously through the cost of living pressures that we've got now, which includes the cost of rental increases.

00:02:25:00 - 00:02:43:12
Keith John
The most important thing for consumers to remember is to speak to their lender, be that the banks themselves or to someone like Pioneer now who takes the place of the banks and start working through. We're all trying to find a solution. No one is trying to make life hard for consumers. And if we can find a solution, that'll be good for them.

00:02:43:12 - 00:02:54:05
Keith John
And in our case, obviously good for us as well. But that's very much what it is. But communication is the key to getting through whatever situation consumers might find themselves.

00:02:54:05 - 00:03:03:17
Elisha Newell
It's good to get that advice. And Keith, bringing you back to the Pioneer story, tell us, what is the vision you've set for the coming months? Any key activities in the pipeline?

00:03:05:00 - 00:03:25:20
Keith John
Yeah, look, we've got a really busy program of work ahead for us. I mean, clearly there's a lot of debt stress in the community, so there's a lot of investment opportunities for Pioneer. We invested about $100 million in last financial year. We're investing about another 60 odd million dollars at the moment into this financial year, into buying new portfolios.

00:03:26:01 - 00:03:50:01
Keith John
So that's a really big piece of work. The other is continuing to understand what's happening with the consumers. You know, our ability to be able to trade successfully and to be able to offer a good value to shareholders and a good return to shareholders is making sure we understand that. So that's a big piece of work. And then the final pieces we’re just about to do a refinance of our debt facilities ourselves.

00:03:50:01 - 00:04:04:08
Keith John
So we partly fund our business through debt and probably through equity. And reducing the cost of funds will really open up the profitability for this business into next financial year. So that's a big piece of work that we're working on over the next few months.

00:04:05:03 - 00:04:14:07
Elisha Newell
All right. So a couple of irons in the fire here. But Keith, I'm wondering, as we wrap up today, could you tell us what is the message you'd like to leave both with your customers and your shareholders?

00:04:15:13 - 00:04:35:20
Keith John
For sure. Look, I think it's a really exciting time in the economy, Elisha. I know there's a lot of stress around, but if people communicate and take their opportunities, just like Pioneer does through these periods, I think there's great opportunity for everyone. You know, there's lots of employment opportunities around. There are lots of investment opportunities around.

00:04:35:20 - 00:04:51:05
Keith John
So it's a pretty exciting time once you look through, you know, the very obvious challenges that are around, that they always exist, they just look differently. So I'd tell people to be optimistic on all fronts at the moment.

00:04:51:05 - 00:05:01:14
Elisha Newell
Well, we appreciate you bringing us some insight on this market at the moment, particularly at a time where there can be a lot of debt stress around Pioneer Credit. Keith John, thanks so much for your time.

00:05:02:16 - 00:05:05:06
Keith John
Thank you, Elisha.