Pioneer's 2024 AGM
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Good Afternoon everybody, welcome to Pioneer's 2024 Annual General Meeting. My name is Steven Targett and I am chair of the board of Pioneer. I'd like to introduce you to the board of Pioneer. On my left is Keith John, managing director and to my right our Non-Executive Director’s Pauline Gately and our recently appointed Non-Executive director, Andrew Whitechurch. Members of the executive are also with us today, our Company Secretary, Sue Symmons, and Chief Financial Officer Barry Hartnett.
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Mr. Matthew Beavis, who is representing the companies auditors RSM for financial year 24, is also in attendance today. Matthew is available to answer any relevant questions as required. The notice of meeting contains six items of business with five resolutions. As we announced on 4 October 2024, resolution two, the re-election of Susan Pervan as non-executive director is withdrawn from the meeting following Susan's decision to resign from the company, effective 3 October 2024.
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Resolution five is a special resolution which requires 75% majority of votes cast in favour by shareholders, who are entitled to vote on the resolution. Before we proceed to the business of the meeting, I'll be providing my chairman's address. Then, following the formal part of the meeting at the close of the AGM, Keith will provide his business update. I confirm that a copy of my address and presentation is being made at
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this meeting has been lodged with the Australian Securities Exchange.
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Before the meeting begins, there are a few housekeeping matters. Please ensure you have followed the instructions on Link Group's virtual meeting online guide and have registered to vote by clicking on a ‘Get a Voting Card’ button as this is a meeting of Pioneer Credit Limited shareholders only shareholders, their appointed proxies or corporate representatives are entitled to ask questions or vote.
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For those visitors who have joined us. You are not eligible to vote or ask questions, but you are obviously very welcome as observers for shareholders once you have registered, you may submit a question by clicking on the ‘Ask a Question’ button, typing your question, and clicking submit. We will do our best to answer all questions during the meeting, so please keep these questions and comments concise to ensure as many questions as possible are answered.
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Following consideration of the 2024 financial report, I will give shareholders the opportunity to ask general questions of the board or questions about the conduct of the audit by the independent auditor, RSM. You will also be given the opportunity to ask questions in relation to each of the resolutions to be considered by the meeting when they are brought forward for consideration, in accordance with the ASX Corporate Governance Principles and recommendations
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all resolutions will be voted on by a poll. Each resolution will be read. Proxy votes will be displayed, and shareholders will be given the opportunity to ask questions. The poll will then be undertaken, and the meeting closed. The results of the poll will be provided to the ASX following the meeting. Proxy votes for each resolution will be as at
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the closing time for receipt of proxies, which was 10am Australian Western Standard Time on Tuesday 29th of October 2024. I will now move to the business of the meeting.
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Ladies and gentlemen, in accordance with the Corporations Act, a link was provided to shareholders on 26 September 2024 to download the company's notice of Annual General Meeting. A copy of the notice is available on a website at the Investor Centre page. If there are no objections, I propose the notice of meeting be taken as read.
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I confirm there is a quorum present. Therefore, the meeting is properly constituted, and I declare the meeting open.
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I am honoured to be representing the board today as your chair. We are hosting today's meeting via webcast, allowing shareholders, proxy holders and visitors to attend virtually. This format enables everyone to watch the meeting live, allowing shareholders and proxy holders to ask questions and submit their votes. I encourage all of you to fully participate in our AGM. Financial year 24 marks a critical point in Pioneers history, as we firmly return to the path of long-term profitable growth, supported by successful refinance of our senior debt facilities at significantly lower margin and obviously lower margin means lower cost of funds, which, is been, a real strong endorsement by the debt markets of Pioneer's balance
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sheet and future direction. At this stage, Keith, I'd also like to thank during the year the amount of work that went in to get that refinancing done by you and your team was enormous. And I think the shareholders should all realise that. And it was a really, really great outcome. So very well done to you, Barry and the rest of the team who worked so hard to, to get that done.
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So, with this milestone behind us and a strong growth orientated syndicate of lenders backing the company's balance sheet, we are now fully focused on achieving our ambitious targets for the future. Your board and management are laser focused on achieving a financial year 25 net profit after tax guidance of at least $9 million. We're also confident that by financial year 26, we will double this to a net profit after tax of at least $18 million.
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These are not just numbers. They represent momentum that we've built and the foundation we have laid for future successes. While, we recently had a resignation from our board. We've decided not to expand the number of directors for the foreseeable future. We believe that keeping the board lean will allow us to concentrate on our core business debt purchasing and servicing and driving the company's profitability. Over the next five years.
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our priorities are clear, the first one being to ensure ongoing, effective governance of the company. Secondly, overseeing management's performance. And thirdly, working closely with the managing director and his team to optimise Pioneer's balance sheet. This straightforward agenda is designed to maximise shareholder value and set the company on course for significant, sustained profitability. In a moment, we'll move to the formal part of the meeting and the voting on resolutions.
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After the formal business concludes, our Managing Director will provide his update. In closing, I'd like to acknowledge and thank my fellow directors, and that includes the directors that served on the board during the year, our company secretary and the management team and all the staff for dedication and their contribution over the past 12 months. Finally, I extend my deepest thanks to you as shareholders for your unwavering and ongoing support.
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The journey ahead for Pioneer is one of growth, resilience and success. I look forward to continuing this exciting chapter with you. Before moving on to the formalities of the meeting, are there any questions? No questions. And there are any questions on the phone line? There are no further questions at this time. Okay. Thank you. Following the formalities of the meeting, I'll be passing to Keith for his presentation.
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You'll have the opportunity to ask at that point to ask Keith any questions. If there are no questions on, then move to the formal business of the meeting. As mentioned, all resolutions will be decided on will be decided on a poll. Each resolution will be read. Proxy votes will be displayed and shareholders will be given the opportunity to ask or submit questions.
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The poll will then be undertaken and the meeting will be closed. The results of the poll will be provided to the ASX later today. The first order of business is to receive and consider the financial report. The directors report and the auditor's report for the year ended 30 June 2024. The 2024 Annual Report contains those reports. A copy of the 2024 Annual Report was made available on the company's website and was sent to those shareholders who requested it.
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The financial statements have been approved by directors and audited by RSM, as required by section 317 of the Corporations Act. I now lay before the meeting, the financial report, the director's report and the auditor's report for the financial year ended 30 June 2024.
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At this time, I would like to take any general questions or comments about the financial report, director's report, or auditor's report. Mr. Matthew Beavis, our audit partner for financial year 24 from RSM, is also available to answer any specific questions you may have about the conduct of the audit. I confirm there been no questions submitted in writing to the auditor prior to this meeting.
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That's correct. Yes. Please keep any questions specifically relating to remuneration until resolution one is dealt with. Are there any questions, Sue? There are no questions. Are there any questions on the phone line? There are no phone questions at this time. Thank you. As there are no questions, I'll now proceed to consider the proposed resolutions on today's agenda.
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Resolution one. Remuneration report. Resolution one of the agenda is to consider, and, if thought fit, to pass a resolution to adopt the remuneration report. I put the resolution to the meeting that the company's remuneration report for the financial year ended 30 June 2024, as set out in the Director's Report, to be adopted. I confirm that the remuneration report is included within the director's report on pages 32 to 45 of the company's 2024 annual report.
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While the vote on this item is advisory only and does not bind the company or its directors, please be assured that the board takes into consideration any feedback we receive from shareholders. The board abstains in the interests of good corporate governance from making a recommendation in relation to this resolution. Voting restrictions apply to this resolution. Key management personnel and their closely related parties whose remuneration details are contained in the remuneration report, are excluded from voting on this resolution, except we're exercising a direct proxy on behalf of persons whose remuneration details are not included in the remuneration report.
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So, the proxy votes. Are there any questions, Sue? No questions. Any questions on the phone line? There are no phone questions at this time. Okay. As there are no questions. And voting will be conducted by a poll. I will now move to the next resolution. As noted previously, resolution two re-election of Susan Pervan as director has been withdrawn following Susan's resignation as a director of the company.
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On 3 October 2024. In August 2024, Susan agreed to retire by rotation and offer herself up for re-election at this year's AGM. Susan’s circumstances changed and she chose to resign as non-executive director. Prior to this meeting. Resolution three. Resolution three is to consider, and is thought fit to pass, a resolution to elect Andrew Whitechurch as a non-executive director of the company.
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I now put the resolution to the meeting that Andrew Whitechurch. He retires as a director in accordance with clause 6.1 E of the company's constitution and having offered himself for election and being eligible, is re-elected as a director of the company. Mr. Whitechurch's experience and qualifications are set out on page nine of the notice of meeting the board, with Mr. Whitechurch abstaining.
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Unanimously recommends that the shareholders vote in favour of the election of Mr. Whitechurch.
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Are there any questions, Sue? no questions. Any questions on the phone line? There are no phone questions at this time. Thank you. As there are no questions and voting will be conducted by a poll. I will now move to the next resolution. Resolution four resolution four is to consider and if thought fit to pass a resolution to ratify the issue of 16,866,614 fully paid ordinary shares.
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I now put the resolution to the meeting that for the purpose of ASX Listing Rule 7.4 and all other purposes, the issue of 16,866,614 fully paid ordinary shares to institutional investors as more fully described in the explanatory statement, be approved. The board unanimously recommends that shareholders vote in favour of the ratification of the issue of 16,866,614 fully paid ordinary shares.
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Are there any questions Sue? No questions. Any questions on the phone line? There are no phone questions at this time. Okay. As there are no questions. And voting will be conducted by a poll. Ill, now move to the final resolution. ASX Listing Rule 7.1 allows companies to issue up to 15% of their fully paid ordinary shares over a 12 month period, without shareholder approval.
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ASX Listing Rule 7.1 A enables eligible entities to seek approval for an additional 10% of their fully paid ordinary shares over any 12 month period. Pioneer is an eligible entity, as it is not included in the S&P ASX 300 index, and has a market capitalisation of less than $300 million, and resolution five seeks shareholder approval by way of special resolution to have the ability to issue securities under the 10% placement facility.
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While the company currently has no plans to make an issue of equity securities under the Listing rule 7.1 A, this approval provides the company with additional flexibility. I now put the resolution to the meeting that, for the purposes of listing rule 7.1 A, and for all other purposes, shareholders approve the issue of securities totalling up to 10% of the issued capital of the company at the time of issue, calculated in accordance with the formula prescribed in listing rule 7.1 A2, and on the terms and conditions as set out in the explanatory statement.
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The board unanimously recommends that shareholders vote in favour of the 10% placement facility.
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Are there any questions Sue? There are no questions. Any questions on the phone line? There are no phone questions at this time. Thank you. As there are no further questions and no further resolutions. I will move to the poll. Ladies and gentlemen, the company has adopted the ASX Corporate Governance Council guidelines, which recommends that a poll be called on all substantive resolutions.
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Linked Market Services Limited has been appointed by Pioneer as returning Officer for the poll. Shareholders who have registered may click on the ‘Get a Voting Card’ button. Once you are voting card appears, all the resolutions to be voted on will be displayed. You may need to use the scroll bar on the right hand side of the voting card to view all resolutions.
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Please follow the prompts online to complete the voting card, and then click the ‘Submit Details’ and ‘Vote’ button.
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The proxy votes that I hold as a nominated proxy for shareholders in relation to each resolution, and they are displayed.
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Online voting will end five minutes after the close of the meeting.
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The results of the poll will be released to the ASX later today, and will be posted on our website, in accordance with the company's constitution. I confirm that there is no other business to be brought forward to be transacted, and as there is no further business, that concludes the formal proceedings of the 2024 Annual General Meeting of Pioneer Credit Limited.
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And I thank you all for attending the meeting and declare the meeting closed. Having concluded our annual General meeting, I would now like to invite Keith John to provide his Managing Directors presentation. Thank you, Steve, and thank you to all the shareholders and visitors, our staff, everyone that's joined us today for this update and for our AGM.
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We really appreciate your interest in our business and your participation in the ongoing building back of Pioneer. Before I start and walk us through the presentation, which really is an update building upon what we're working on from our full year presentation only a short while ago. I just want to talk briefly about where Pioneer is and what it will be doing in the in the next few years.
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And Steve, talked about this in his speech in particular around the way the board will function from here and what we're about. In short, we're about to get very boring. I think shareholders will welcome that. We certainly will. Following the events of the last few years and very boring looks like three very simple, focused, parts or parts to deliver to you our shareholders, what you expect of this company, which is sustained profitable growth.
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The first is the board's focus on continuing that effective governance that we've had the whole way through. And part of that leads to that litigation against PWC, which I'll update you on in a little bit. The second is overseeing management's performance. And for the board, that's clearly the oversight of what we do as management and how we deliver on the operational strategy of the business.
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And for the executive, your executive that is about, excellent execution through our business and how we drive this business forward in a very sustainable, profitable and consistent way. And the third is for us to continue to work now to optimise our balance sheet, to build that strength back into our balance sheet over time. So that we're a very strong, robust company, as we have been previously.
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And that is our focus for the next few years. So as we walk through, presentations from here, you will see more about our operational performance, more about why we are a great business, why you should trust us with your capital, why the banks want to sell to us, and how we're going to turn that into, into growth and value for you, our shareholders, and for all of the stakeholders as well.
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Much of what I will present today, you have seen before. But it contains the updated information as at last night, so that you can continue to get a really good feel for the way the business that you’ve invested in continues to grow and to execute. We remain a debt recovery specialist, and we focused on acquiring and servicing retail debt portfolios.
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We don't work for third parties. And as you know, we do not invest in payday loans. It is a critical difference between us and everyone else that builds strength and resilience into the business that we have, but it also supports attracting really good talent into our contact centers. For the people that are working with our customers directly.
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They want to be working with customers that have the opportunity and have the ability to get ahead and get back on track financially in their lives. They get great satisfaction from working with our customers through situations to deliver that. And it's a critical part if we have payday or lower quality, segments, it's very, very difficult.
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It's not where we operate. Our PDP, as you know, are primarily acquired from the banks and major financial institutions in our business. There is a lot of opportunity now. It's to be expected with the cost of living pressures that are around and have been for some time in, in the context of how we execute our investment strategy.
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It is very considered. It is very, strategic and it is about building long term, repeatable growth into our business. We have market leadership across this sector. We are exceptionally well known and regarded for our differentiated servicing. If you go back and look at our very first presentation to the ASX in 2014, we spoke about that. It is never changed.
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It is a hallmark of this business and it has been the right strategy the whole way through. We now live in an environment where consumers have incredible weight in terms of, their persona, in terms of the way they, they influence the behaviour of companies and people that service them. Pioneer has always been at the forefront of that and will continue to be.
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That's highly regarded. And it's a great, hallmark of this business which allows us to be successful. We've got an incredible track record since 2008. We've invested almost, well, just over three quarters of a billion dollars into portfolios across, you know, almost 6 billion in receivables. That's a lot of consumer debt. That's a lot of data.
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And we've got a very talented team that are very dedicated to making sure that we invest our money. Your money, we invest well, and if we don't, then we don't do it. We don't take unnecessary risk with any of our capital. Our customer base. Now some 221,000 consumers across 2 billion in receivables, $435 million of which is under arrangement.
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These are customers that are paying us weekly, fortnightly or monthly on a regular basis. And it's a great source of repeatable, revenue from us or for us. We need to look after those customers really, really well. And I think we do an exceptional job of that. And ultimately this bit that makes us different, the bit that makes us special.
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Everyone talks about culture. Very few people can define it. In Pioneer it's founded in good. We look for people that have good intent. That's what makes us special. And we're very, very focused on that. We make mistakes like everyone, but our intent is unbelievably good. And it's one of the great characteristics if you walk across our contact centre floors, which many, many people have.
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You can feel it right across our business. And it's part of why the banks love dealing with us.
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Over the course of the next couple of years, we've got a lot of growth opportunities. These are not opportunities that sit outside of our core market. They are all in our core market. Right back to what I said at the beginning. This is going to be a very boring business now. We are focused on improving our profitability and continuing to grow that, improving our balance sheet and, and continue to strengthen that and growing in our markets where we can do that profitably for our benefit, for your benefit in a sustainable way.
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In terms of our positioning, we're one of few scaled participants. We live in a virtual duopoly now across the major banks. That's a really great position that we've dealt ourselves into over the past few years. We think over the next few years that's going to pay dividends for us handsomely. We've got a market leading reputation. You can't be one of the participants if you don't have that.
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Ours is market leading. We are renowned for that. And if you think about this business over the last few years, the challenges that it had pre refinancing to be able to maintain these relationships with the banks is a great testament to the work that our entire team does and the way they care about our customers, about our vendors, about your capital, about every single thing that we do.
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That's creating opportunities for us that that we think are unique and are going to pay massive dividends over the next few years. We've got that unique servicing approach. I've spoken through that and the very logical, very logical position that we have. We don't compete with our vendors. We don't compete with our vendors. These people are the ones that are helping grow this business, and we respect that deeply.
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They know we respect that deeply, and we're a part of the solution for them. We don't compete with them in terms of the growth opportunities. There's a broad range. There are performing portfolios from vendors also some of our competitors, as they become less competitive because of cost of funds, because of the increased compliance costs that our sector faces and so forth.
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Having scale allows us to participate in that. And over the course of the last year, you've seen some of those transactions. There are broad scale warehouse transactions coming to market in the next couple of years. Over the last few years coming out of Covid, there's been a lot of portfolios stockpiled. There, coming back to market now, we think we're in an ideal position to participate in that.
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Alternative portfolios that are low cost to serve. Really important in terms of how we manage this business, how we allocate our capital. There is some M&A opportunities as well, competitors that are looking to exit from this market. And finally, an economic outlook that is very supportive of this business. The biggest swing factor in the performance of our portfolio is not interest rates.
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It is how many people are employed. Australians are incredibly focused on paying down debt. It is a big focus of Australians, and we have continuing to see that right through the operation of our business. You know, the full year I spoke about, we've got the quickest or the most number of customers paying us that at three months, six month and 12 months.
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And we've had in years, and the average payment arrangement is up 2.3% over the last couple of years. It's a remarkable number when you consider exactly what's going on in our economy, but it goes to the quality of our book, the quality of the service we provide and the strength of the Australian consumer, and just how remarkable they are in their intent to pay down debt.
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In terms of investment, as I've said, there is a, an incredible amount of opportunity that sits in the market, more than we have ever seen, more than we have ever seen in terms of the number of vendors that are coming and engaging with us. That creates a whole range of work for us. Obviously, a big part for Pioneer is to understand those vendors.
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We're not interested in one off transactions. That's not who we are. We are looking for long term sustainable partnerships so that when you, as a vendor, get to the point of wanting to sell again or whatever you only think of Pioneer. That's where we're aiming. As we said, we've invested some three quarters of a billion dollars. We've got extensive performance data, and you'll see just how strong our underwriting is in a moment.
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And we don't invest in payday or SAC. That has served us incredibly well. On the right hand side of the graph, you can see that through 18 to 21, those Covid years, our investment peeled off dramatically, as you would expect. But through that time, our cash collections remained pretty static at $100 million. And then you see it shoot up as soon as we started investing again.
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It's a really important part to understand that this business continues to do really well, even when it stops investing, when it's ex growth, because it continues to perform well in the back vintages. You can't do that unless you look after these people well. And if you don't invest well, and we do both of those things incredibly well as we stand today, we need to invest about $56 million, on a replacement basis.
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So anything beyond that is growth. That's where we're in the growth territory. As we start, we've had the best starting position of investment in the last six years. We were $61 million when we released, at the full year results. We're now up to $65 million. We haven't made that much more in investment.
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We're spending a lot of time talking to people, understanding what the opportunity is, and making sure that we allocate the rest of our capital, the rest that we want to allocate this year, exceptionally well. In terms of our investment. This really just talks to what we've done in the past three years. So you can just see how diversified it is.
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We've had we had 20 vendors in FY24. You will have seen we've already got 14 in FY25. It's a great position to start from. And we've dealt with 30 vendors in the past three years. Very, very proud of that. We're very, very proud that the people that we're dealing with want to continue dealing with us, and, and continue doing business with pioneer and trusting us with their customers in terms of, ERC at June 24, this is the estimated remaining collections.
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What do we expect to recover over time from that book? We've got $435 million under arrangement. We expect to recover about $642 million. The job of our team, of and our analysts and all the other people is to see if we can increase that through better analytics data, through better treatment. And that's one of the big jobs that we have when we talk about operational performance.
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But across our book there, you can see 80% of our book is credit cards and personal loans. And there's a bit of insolvency in there and a bit of mortgage and some other asset types as well, car loans and the like, but a really, really nice portfolio of customer types that we understand fully.
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At the full year, we removed, this graph and we were asked by some of our institutional shareholders and new business shareholders if we put it back. And of course, we're very pleased to do that. The feedback of shareholders is critical. We can't possibly understand everything that's important to you. But we do seek your counsel and we do listen to you, and it's valued.
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This here talks to our performance across vintages. So 36% of our, revenue in the first quarter of this year has come from accounts that have been with us for less than a year. And you can see the performance right through our books were very, very pleased with the continued performance of our business and our operation across everything else, that we're, that we're working on.
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In terms of historical returns and this goes back to the quality of our underwriting, no one in Australia has ever published this information. It is, regularly published in the Northern hemisphere. And we always talked about once we reached scale, we would do this and in line with our commitment to be the most transparent and the most well understood business in our sector.
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We're publishing the real returns that you can see on a vintage basis. The graph in the black is the multiple, the money multiple we expected at underwriting. What was our investment case? The bar in the orange is receipted cash collections, what we've actually got in the bank, and the bit more that we expect to recover. And you can see right across the board, we are exceeding our underwriting.
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This goes back to the way this business is structured, from the delegation of the board, in the investment delegation that is provided to management. It is rigid, it is immovable, and it is very, very clear about where we can invest and where we cannot invest. And that is provided and delegated to a management team that is all heavily invested into this business with its wealth sitting alongside you as shareholders.
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There are no short term incentives in this business, as I have repeated time and time again when we invest our capital, when we invest your capital, we're doing it with a long term outlook on what is best for this business. We do not do things for the short term. We make sure that we're investing for the long term to get great outcomes.
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And that is why, from an underwriting perspective, we are outperforming across every vintage.
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Finally, we've had lots of questions with respect to the litigation against PWC. It's very difficult to be more expensive than what we have on the screen, but it's been provided by our counsel. So that we can give you as much information as we possibly can with respect to how that litigation is progressing. In short, we have a claim against PWC for some $32 million, including the accrued interest.
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They have not counterclaim against us and we are not aware of any reason they could counterclaim against us. This matter needs to continue to progress. And where we are now in that process is we have provided our expert evidence. We think that is compelling as we do our entire case. The matter will be returning before a judge to case management in March next year, late March next year.
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And what will happen at that stage is that the judge will set out a detailed path through to, in likelihood, mediation and then to trial. So I said it all out and then we'll continue to progress through the matter. We will provide you with an update, most likely at the full year results next year. But we're very pleased with the way the matter is progressing and with the work that our council are doing and that our team has done over the last few years to ensure that we can recover that which, which we believe is due.
00:38:13:24 - 00:38:43:13
I just mentioned our alignment. The shareholders management remains the largest shareholder and exposure to this equity as you should. Well, expect when we make decisions, we are standing right beside you and we are there after you. That's the way it should be in small financials. It's the way it's always been at Pioneer. And it is a key part of our formula to success.
00:38:43:15 - 00:39:15:15
As I've also explained to people, when we make investment decisions, there are four people in the room and it is unanimous or it does not happen. We don't move from that. We don't budge on integrity or standards. It's critical to ensuring we get the best possible outcome every time in terms of our long term incentives. As you are aware, there are three yearly incentives.
00:39:15:18 - 00:39:31:25
We need to deliver on this year's performance. And then next year, for those incentives to vest, we must deliver a statutory net profit after taxation of at least $18 million.
00:39:31:27 - 00:39:39:21
We will do everything to deliver upon that number.
00:39:39:23 - 00:40:12:21
In terms of our outlook, as I've mentioned, there are strong tailwinds, for opportunities in our sector. We've guided to an investment of $80 million with held at that. We've got $65 million under contract already. We think there's some upside risk to this investment guidance late in the financial year, but we want to make sure we invest that money really, really well to start with, industry regulatory focus is clearly a big part of our industry.
00:40:12:21 - 00:40:36:06
It's what sets us apart. We've got a strong compliance record. We've got our NPS, which is an advantage. We continue to invest heavily in that part of our business. There remains this opportunity to realize some of the operating leverage in our business that's brought about through scale and also brought about through our new platform, which is on track to be delivering in 2025.
00:40:36:09 - 00:41:04:23
You have an exceptional and well tested and experienced management team working for you. They're very, very committed. Deeper than that, you've got an exceptional team of people, working through our business at every level. Only last week we had a celebratory dinner for people that have been with us for more than ten years. There was about 25 people at that dinner.
00:41:04:25 - 00:41:35:20
Which is quite remarkable when you think about we only started, 11 or 12 years ago. So, that was a great celebration. But those are people that are just incredibly committed to delivering for our shareholders and for our customers. And we reiterate our guidance. PDP investment of at least $80 million net profit after taxation for the full financial year of at least $9 million.
00:41:35:22 - 00:41:58:01
With that said, we have received one question, online. I'm more than happy to take any other questions online, should you wish to the, should you wish to submit them. But I'll answer that question now, which was with the additional capital from exercising the 80 cent listed options, assist in improving the balance sheet at all.
00:41:58:01 - 00:42:41:25
Is it required? Thank you for the question. It absolutely will assist in improving the balance sheet. There's no doubt about that. We're working hard to appropriately share our message. Share the growth story. We've had fantastic support from some of our new institutional shareholders, which we're just so grateful for. In terms of them also sharing the message and helping us as we, as we move through this next phase of the business where we're very keen to see those options exercised and, and, and hopefully and we're hopeful that that that will occur.
00:42:41:28 - 00:43:00:21
It's not required. We don't need the extra capital, but I can assure you it will be very, very, very well used in making sure we build resilience back into our business at a, at a very good right.
00:43:00:23 - 00:43:28:24
There are no more questions that have come through. That concludes my presentation. I thank you very much again for your attendance today. I thank you for your interest and support of Pioneer. And special thanks to my board. It's a lot of work. For a small board. We're very focused on a lot in our business, and I appreciate all of your efforts.
00:43:28:26 - 00:43:36:13
And to my executive as well. Thank you for everything that you do each and every day in our business. Thank you.
00:00:00:00 - 00:00:34:12
Good Afternoon everybody, welcome to Pioneer's 2024 Annual General Meeting. My name is Steven Targett and I am chair of the board of Pioneer. I'd like to introduce you to the board of Pioneer. On my left is Keith John, managing director and to my right our Non-Executive Director’s Pauline Gately and our recently appointed Non-Executive director, Andrew Whitechurch. Members of the executive are also with us today, our Company Secretary, Sue Symmons, and Chief Financial Officer Barry Hartnett.
00:00:34:15 - 00:01:12:05
Mr. Matthew Beavis, who is representing the companies auditors RSM for financial year 24, is also in attendance today. Matthew is available to answer any relevant questions as required. The notice of meeting contains six items of business with five resolutions. As we announced on 4 October 2024, resolution two, the re-election of Susan Pervan as non-executive director is withdrawn from the meeting following Susan's decision to resign from the company, effective 3 October 2024.
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Resolution five is a special resolution which requires 75% majority of votes cast in favour by shareholders, who are entitled to vote on the resolution. Before we proceed to the business of the meeting, I'll be providing my chairman's address. Then, following the formal part of the meeting at the close of the AGM, Keith will provide his business update. I confirm that a copy of my address and presentation is being made at
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this meeting has been lodged with the Australian Securities Exchange.
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Before the meeting begins, there are a few housekeeping matters. Please ensure you have followed the instructions on Link Group's virtual meeting online guide and have registered to vote by clicking on a ‘Get a Voting Card’ button as this is a meeting of Pioneer Credit Limited shareholders only shareholders, their appointed proxies or corporate representatives are entitled to ask questions or vote.
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For those visitors who have joined us. You are not eligible to vote or ask questions, but you are obviously very welcome as observers for shareholders once you have registered, you may submit a question by clicking on the ‘Ask a Question’ button, typing your question, and clicking submit. We will do our best to answer all questions during the meeting, so please keep these questions and comments concise to ensure as many questions as possible are answered.
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Following consideration of the 2024 financial report, I will give shareholders the opportunity to ask general questions of the board or questions about the conduct of the audit by the independent auditor, RSM. You will also be given the opportunity to ask questions in relation to each of the resolutions to be considered by the meeting when they are brought forward for consideration, in accordance with the ASX Corporate Governance Principles and recommendations
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all resolutions will be voted on by a poll. Each resolution will be read. Proxy votes will be displayed, and shareholders will be given the opportunity to ask questions. The poll will then be undertaken, and the meeting closed. The results of the poll will be provided to the ASX following the meeting. Proxy votes for each resolution will be as at
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the closing time for receipt of proxies, which was 10am Australian Western Standard Time on Tuesday 29th of October 2024. I will now move to the business of the meeting.
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Ladies and gentlemen, in accordance with the Corporations Act, a link was provided to shareholders on 26 September 2024 to download the company's notice of Annual General Meeting. A copy of the notice is available on a website at the Investor Centre page. If there are no objections, I propose the notice of meeting be taken as read.
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I confirm there is a quorum present. Therefore, the meeting is properly constituted, and I declare the meeting open.
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I am honoured to be representing the board today as your chair. We are hosting today's meeting via webcast, allowing shareholders, proxy holders and visitors to attend virtually. This format enables everyone to watch the meeting live, allowing shareholders and proxy holders to ask questions and submit their votes. I encourage all of you to fully participate in our AGM. Financial year 24 marks a critical point in Pioneers history, as we firmly return to the path of long-term profitable growth, supported by successful refinance of our senior debt facilities at significantly lower margin and obviously lower margin means lower cost of funds, which, is been, a real strong endorsement by the debt markets of Pioneer's balance
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sheet and future direction. At this stage, Keith, I'd also like to thank during the year the amount of work that went in to get that refinancing done by you and your team was enormous. And I think the shareholders should all realise that. And it was a really, really great outcome. So very well done to you, Barry and the rest of the team who worked so hard to, to get that done.
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So, with this milestone behind us and a strong growth orientated syndicate of lenders backing the company's balance sheet, we are now fully focused on achieving our ambitious targets for the future. Your board and management are laser focused on achieving a financial year 25 net profit after tax guidance of at least $9 million. We're also confident that by financial year 26, we will double this to a net profit after tax of at least $18 million.
00:06:08:11 - 00:06:36:05
These are not just numbers. They represent momentum that we've built and the foundation we have laid for future successes. While, we recently had a resignation from our board. We've decided not to expand the number of directors for the foreseeable future. We believe that keeping the board lean will allow us to concentrate on our core business debt purchasing and servicing and driving the company's profitability. Over the next five years.
00:06:36:06 - 00:07:06:08
our priorities are clear, the first one being to ensure ongoing, effective governance of the company. Secondly, overseeing management's performance. And thirdly, working closely with the managing director and his team to optimise Pioneer's balance sheet. This straightforward agenda is designed to maximise shareholder value and set the company on course for significant, sustained profitability. In a moment, we'll move to the formal part of the meeting and the voting on resolutions.
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After the formal business concludes, our Managing Director will provide his update. In closing, I'd like to acknowledge and thank my fellow directors, and that includes the directors that served on the board during the year, our company secretary and the management team and all the staff for dedication and their contribution over the past 12 months. Finally, I extend my deepest thanks to you as shareholders for your unwavering and ongoing support.
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The journey ahead for Pioneer is one of growth, resilience and success. I look forward to continuing this exciting chapter with you. Before moving on to the formalities of the meeting, are there any questions? No questions. And there are any questions on the phone line? There are no further questions at this time. Okay. Thank you. Following the formalities of the meeting, I'll be passing to Keith for his presentation.
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You'll have the opportunity to ask at that point to ask Keith any questions. If there are no questions on, then move to the formal business of the meeting. As mentioned, all resolutions will be decided on will be decided on a poll. Each resolution will be read. Proxy votes will be displayed and shareholders will be given the opportunity to ask or submit questions.
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The poll will then be undertaken and the meeting will be closed. The results of the poll will be provided to the ASX later today. The first order of business is to receive and consider the financial report. The directors report and the auditor's report for the year ended 30 June 2024. The 2024 Annual Report contains those reports. A copy of the 2024 Annual Report was made available on the company's website and was sent to those shareholders who requested it.
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The financial statements have been approved by directors and audited by RSM, as required by section 317 of the Corporations Act. I now lay before the meeting, the financial report, the director's report and the auditor's report for the financial year ended 30 June 2024.
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At this time, I would like to take any general questions or comments about the financial report, director's report, or auditor's report. Mr. Matthew Beavis, our audit partner for financial year 24 from RSM, is also available to answer any specific questions you may have about the conduct of the audit. I confirm there been no questions submitted in writing to the auditor prior to this meeting.
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That's correct. Yes. Please keep any questions specifically relating to remuneration until resolution one is dealt with. Are there any questions, Sue? There are no questions. Are there any questions on the phone line? There are no phone questions at this time. Thank you. As there are no questions, I'll now proceed to consider the proposed resolutions on today's agenda.
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Resolution one. Remuneration report. Resolution one of the agenda is to consider, and, if thought fit, to pass a resolution to adopt the remuneration report. I put the resolution to the meeting that the company's remuneration report for the financial year ended 30 June 2024, as set out in the Director's Report, to be adopted. I confirm that the remuneration report is included within the director's report on pages 32 to 45 of the company's 2024 annual report.
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While the vote on this item is advisory only and does not bind the company or its directors, please be assured that the board takes into consideration any feedback we receive from shareholders. The board abstains in the interests of good corporate governance from making a recommendation in relation to this resolution. Voting restrictions apply to this resolution. Key management personnel and their closely related parties whose remuneration details are contained in the remuneration report, are excluded from voting on this resolution, except we're exercising a direct proxy on behalf of persons whose remuneration details are not included in the remuneration report.
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So, the proxy votes. Are there any questions, Sue? No questions. Any questions on the phone line? There are no phone questions at this time. Okay. As there are no questions. And voting will be conducted by a poll. I will now move to the next resolution. As noted previously, resolution two re-election of Susan Pervan as director has been withdrawn following Susan's resignation as a director of the company.
00:11:55:07 - 00:12:26:06
On 3 October 2024. In August 2024, Susan agreed to retire by rotation and offer herself up for re-election at this year's AGM. Susan’s circumstances changed and she chose to resign as non-executive director. Prior to this meeting. Resolution three. Resolution three is to consider, and is thought fit to pass, a resolution to elect Andrew Whitechurch as a non-executive director of the company.
00:12:26:08 - 00:12:50:28
I now put the resolution to the meeting that Andrew Whitechurch. He retires as a director in accordance with clause 6.1 E of the company's constitution and having offered himself for election and being eligible, is re-elected as a director of the company. Mr. Whitechurch's experience and qualifications are set out on page nine of the notice of meeting the board, with Mr. Whitechurch abstaining.
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Unanimously recommends that the shareholders vote in favour of the election of Mr. Whitechurch.
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Are there any questions, Sue? no questions. Any questions on the phone line? There are no phone questions at this time. Thank you. As there are no questions and voting will be conducted by a poll. I will now move to the next resolution. Resolution four resolution four is to consider and if thought fit to pass a resolution to ratify the issue of 16,866,614 fully paid ordinary shares.
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I now put the resolution to the meeting that for the purpose of ASX Listing Rule 7.4 and all other purposes, the issue of 16,866,614 fully paid ordinary shares to institutional investors as more fully described in the explanatory statement, be approved. The board unanimously recommends that shareholders vote in favour of the ratification of the issue of 16,866,614 fully paid ordinary shares.
00:14:08:12 - 00:14:36:15
Are there any questions Sue? No questions. Any questions on the phone line? There are no phone questions at this time. Okay. As there are no questions. And voting will be conducted by a poll. Ill, now move to the final resolution. ASX Listing Rule 7.1 allows companies to issue up to 15% of their fully paid ordinary shares over a 12 month period, without shareholder approval.
00:14:36:18 - 00:15:09:12
ASX Listing Rule 7.1 A enables eligible entities to seek approval for an additional 10% of their fully paid ordinary shares over any 12 month period. Pioneer is an eligible entity, as it is not included in the S&P ASX 300 index, and has a market capitalisation of less than $300 million, and resolution five seeks shareholder approval by way of special resolution to have the ability to issue securities under the 10% placement facility.
00:15:09:14 - 00:15:49:20
While the company currently has no plans to make an issue of equity securities under the Listing rule 7.1 A, this approval provides the company with additional flexibility. I now put the resolution to the meeting that, for the purposes of listing rule 7.1 A, and for all other purposes, shareholders approve the issue of securities totalling up to 10% of the issued capital of the company at the time of issue, calculated in accordance with the formula prescribed in listing rule 7.1 A2, and on the terms and conditions as set out in the explanatory statement.
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The board unanimously recommends that shareholders vote in favour of the 10% placement facility.
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Are there any questions Sue? There are no questions. Any questions on the phone line? There are no phone questions at this time. Thank you. As there are no further questions and no further resolutions. I will move to the poll. Ladies and gentlemen, the company has adopted the ASX Corporate Governance Council guidelines, which recommends that a poll be called on all substantive resolutions.
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Linked Market Services Limited has been appointed by Pioneer as returning Officer for the poll. Shareholders who have registered may click on the ‘Get a Voting Card’ button. Once you are voting card appears, all the resolutions to be voted on will be displayed. You may need to use the scroll bar on the right hand side of the voting card to view all resolutions.
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Please follow the prompts online to complete the voting card, and then click the ‘Submit Details’ and ‘Vote’ button.
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The proxy votes that I hold as a nominated proxy for shareholders in relation to each resolution, and they are displayed.
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Online voting will end five minutes after the close of the meeting.
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The results of the poll will be released to the ASX later today, and will be posted on our website, in accordance with the company's constitution. I confirm that there is no other business to be brought forward to be transacted, and as there is no further business, that concludes the formal proceedings of the 2024 Annual General Meeting of Pioneer Credit Limited.
00:17:38:13 - 00:18:04:23
And I thank you all for attending the meeting and declare the meeting closed. Having concluded our annual General meeting, I would now like to invite Keith John to provide his Managing Directors presentation. Thank you, Steve, and thank you to all the shareholders and visitors, our staff, everyone that's joined us today for this update and for our AGM.
00:18:04:25 - 00:18:38:16
We really appreciate your interest in our business and your participation in the ongoing building back of Pioneer. Before I start and walk us through the presentation, which really is an update building upon what we're working on from our full year presentation only a short while ago. I just want to talk briefly about where Pioneer is and what it will be doing in the in the next few years.
00:18:38:19 - 00:19:18:16
And Steve, talked about this in his speech in particular around the way the board will function from here and what we're about. In short, we're about to get very boring. I think shareholders will welcome that. We certainly will. Following the events of the last few years and very boring looks like three very simple, focused, parts or parts to deliver to you our shareholders, what you expect of this company, which is sustained profitable growth.
00:19:18:18 - 00:19:41:16
The first is the board's focus on continuing that effective governance that we've had the whole way through. And part of that leads to that litigation against PWC, which I'll update you on in a little bit. The second is overseeing management's performance. And for the board, that's clearly the oversight of what we do as management and how we deliver on the operational strategy of the business.
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And for the executive, your executive that is about, excellent execution through our business and how we drive this business forward in a very sustainable, profitable and consistent way. And the third is for us to continue to work now to optimise our balance sheet, to build that strength back into our balance sheet over time. So that we're a very strong, robust company, as we have been previously.
00:20:13:23 - 00:20:46:09
And that is our focus for the next few years. So as we walk through, presentations from here, you will see more about our operational performance, more about why we are a great business, why you should trust us with your capital, why the banks want to sell to us, and how we're going to turn that into, into growth and value for you, our shareholders, and for all of the stakeholders as well.
00:20:46:11 - 00:21:12:10
Much of what I will present today, you have seen before. But it contains the updated information as at last night, so that you can continue to get a really good feel for the way the business that you’ve invested in continues to grow and to execute. We remain a debt recovery specialist, and we focused on acquiring and servicing retail debt portfolios.
00:21:12:12 - 00:21:38:06
We don't work for third parties. And as you know, we do not invest in payday loans. It is a critical difference between us and everyone else that builds strength and resilience into the business that we have, but it also supports attracting really good talent into our contact centers. For the people that are working with our customers directly.
00:21:38:08 - 00:22:01:28
They want to be working with customers that have the opportunity and have the ability to get ahead and get back on track financially in their lives. They get great satisfaction from working with our customers through situations to deliver that. And it's a critical part if we have payday or lower quality, segments, it's very, very difficult.
00:22:01:28 - 00:22:26:14
It's not where we operate. Our PDP, as you know, are primarily acquired from the banks and major financial institutions in our business. There is a lot of opportunity now. It's to be expected with the cost of living pressures that are around and have been for some time in, in the context of how we execute our investment strategy.
00:22:26:16 - 00:22:53:20
It is very considered. It is very, strategic and it is about building long term, repeatable growth into our business. We have market leadership across this sector. We are exceptionally well known and regarded for our differentiated servicing. If you go back and look at our very first presentation to the ASX in 2014, we spoke about that. It is never changed.
00:22:53:20 - 00:23:22:03
It is a hallmark of this business and it has been the right strategy the whole way through. We now live in an environment where consumers have incredible weight in terms of, their persona, in terms of the way they, they influence the behaviour of companies and people that service them. Pioneer has always been at the forefront of that and will continue to be.
00:23:22:06 - 00:23:46:07
That's highly regarded. And it's a great, hallmark of this business which allows us to be successful. We've got an incredible track record since 2008. We've invested almost, well, just over three quarters of a billion dollars into portfolios across, you know, almost 6 billion in receivables. That's a lot of consumer debt. That's a lot of data.
00:23:46:07 - 00:24:15:02
And we've got a very talented team that are very dedicated to making sure that we invest our money. Your money, we invest well, and if we don't, then we don't do it. We don't take unnecessary risk with any of our capital. Our customer base. Now some 221,000 consumers across 2 billion in receivables, $435 million of which is under arrangement.
00:24:15:02 - 00:24:37:29
These are customers that are paying us weekly, fortnightly or monthly on a regular basis. And it's a great source of repeatable, revenue from us or for us. We need to look after those customers really, really well. And I think we do an exceptional job of that. And ultimately this bit that makes us different, the bit that makes us special.
00:24:38:00 - 00:25:06:28
Everyone talks about culture. Very few people can define it. In Pioneer it's founded in good. We look for people that have good intent. That's what makes us special. And we're very, very focused on that. We make mistakes like everyone, but our intent is unbelievably good. And it's one of the great characteristics if you walk across our contact centre floors, which many, many people have.
00:25:07:00 - 00:25:16:29
You can feel it right across our business. And it's part of why the banks love dealing with us.
00:25:17:02 - 00:25:52:12
Over the course of the next couple of years, we've got a lot of growth opportunities. These are not opportunities that sit outside of our core market. They are all in our core market. Right back to what I said at the beginning. This is going to be a very boring business now. We are focused on improving our profitability and continuing to grow that, improving our balance sheet and, and continue to strengthen that and growing in our markets where we can do that profitably for our benefit, for your benefit in a sustainable way.
00:25:52:15 - 00:26:15:15
In terms of our positioning, we're one of few scaled participants. We live in a virtual duopoly now across the major banks. That's a really great position that we've dealt ourselves into over the past few years. We think over the next few years that's going to pay dividends for us handsomely. We've got a market leading reputation. You can't be one of the participants if you don't have that.
00:26:15:18 - 00:26:45:07
Ours is market leading. We are renowned for that. And if you think about this business over the last few years, the challenges that it had pre refinancing to be able to maintain these relationships with the banks is a great testament to the work that our entire team does and the way they care about our customers, about our vendors, about your capital, about every single thing that we do.
00:26:45:09 - 00:27:14:18
That's creating opportunities for us that that we think are unique and are going to pay massive dividends over the next few years. We've got that unique servicing approach. I've spoken through that and the very logical, very logical position that we have. We don't compete with our vendors. We don't compete with our vendors. These people are the ones that are helping grow this business, and we respect that deeply.
00:27:14:18 - 00:27:37:15
They know we respect that deeply, and we're a part of the solution for them. We don't compete with them in terms of the growth opportunities. There's a broad range. There are performing portfolios from vendors also some of our competitors, as they become less competitive because of cost of funds, because of the increased compliance costs that our sector faces and so forth.
00:27:37:17 - 00:28:03:08
Having scale allows us to participate in that. And over the course of the last year, you've seen some of those transactions. There are broad scale warehouse transactions coming to market in the next couple of years. Over the last few years coming out of Covid, there's been a lot of portfolios stockpiled. There, coming back to market now, we think we're in an ideal position to participate in that.
00:28:03:10 - 00:28:32:17
Alternative portfolios that are low cost to serve. Really important in terms of how we manage this business, how we allocate our capital. There is some M&A opportunities as well, competitors that are looking to exit from this market. And finally, an economic outlook that is very supportive of this business. The biggest swing factor in the performance of our portfolio is not interest rates.
00:28:32:17 - 00:28:54:27
It is how many people are employed. Australians are incredibly focused on paying down debt. It is a big focus of Australians, and we have continuing to see that right through the operation of our business. You know, the full year I spoke about, we've got the quickest or the most number of customers paying us that at three months, six month and 12 months.
00:28:54:27 - 00:29:25:07
And we've had in years, and the average payment arrangement is up 2.3% over the last couple of years. It's a remarkable number when you consider exactly what's going on in our economy, but it goes to the quality of our book, the quality of the service we provide and the strength of the Australian consumer, and just how remarkable they are in their intent to pay down debt.
00:29:25:09 - 00:29:52:07
In terms of investment, as I've said, there is a, an incredible amount of opportunity that sits in the market, more than we have ever seen, more than we have ever seen in terms of the number of vendors that are coming and engaging with us. That creates a whole range of work for us. Obviously, a big part for Pioneer is to understand those vendors.
00:29:52:09 - 00:30:21:03
We're not interested in one off transactions. That's not who we are. We are looking for long term sustainable partnerships so that when you, as a vendor, get to the point of wanting to sell again or whatever you only think of Pioneer. That's where we're aiming. As we said, we've invested some three quarters of a billion dollars. We've got extensive performance data, and you'll see just how strong our underwriting is in a moment.
00:30:21:05 - 00:30:47:29
And we don't invest in payday or SAC. That has served us incredibly well. On the right hand side of the graph, you can see that through 18 to 21, those Covid years, our investment peeled off dramatically, as you would expect. But through that time, our cash collections remained pretty static at $100 million. And then you see it shoot up as soon as we started investing again.
00:30:48:01 - 00:31:18:00
It's a really important part to understand that this business continues to do really well, even when it stops investing, when it's ex growth, because it continues to perform well in the back vintages. You can't do that unless you look after these people well. And if you don't invest well, and we do both of those things incredibly well as we stand today, we need to invest about $56 million, on a replacement basis.
00:31:18:00 - 00:31:41:19
So anything beyond that is growth. That's where we're in the growth territory. As we start, we've had the best starting position of investment in the last six years. We were $61 million when we released, at the full year results. We're now up to $65 million. We haven't made that much more in investment.
00:31:41:19 - 00:32:06:04
We're spending a lot of time talking to people, understanding what the opportunity is, and making sure that we allocate the rest of our capital, the rest that we want to allocate this year, exceptionally well. In terms of our investment. This really just talks to what we've done in the past three years. So you can just see how diversified it is.
00:32:06:08 - 00:32:38:06
We've had we had 20 vendors in FY24. You will have seen we've already got 14 in FY25. It's a great position to start from. And we've dealt with 30 vendors in the past three years. Very, very proud of that. We're very, very proud that the people that we're dealing with want to continue dealing with us, and, and continue doing business with pioneer and trusting us with their customers in terms of, ERC at June 24, this is the estimated remaining collections.
00:32:38:06 - 00:33:04:15
What do we expect to recover over time from that book? We've got $435 million under arrangement. We expect to recover about $642 million. The job of our team, of and our analysts and all the other people is to see if we can increase that through better analytics data, through better treatment. And that's one of the big jobs that we have when we talk about operational performance.
00:33:04:17 - 00:33:28:26
But across our book there, you can see 80% of our book is credit cards and personal loans. And there's a bit of insolvency in there and a bit of mortgage and some other asset types as well, car loans and the like, but a really, really nice portfolio of customer types that we understand fully.
00:33:28:28 - 00:33:55:21
At the full year, we removed, this graph and we were asked by some of our institutional shareholders and new business shareholders if we put it back. And of course, we're very pleased to do that. The feedback of shareholders is critical. We can't possibly understand everything that's important to you. But we do seek your counsel and we do listen to you, and it's valued.
00:33:55:24 - 00:34:22:05
This here talks to our performance across vintages. So 36% of our, revenue in the first quarter of this year has come from accounts that have been with us for less than a year. And you can see the performance right through our books were very, very pleased with the continued performance of our business and our operation across everything else, that we're, that we're working on.
00:34:22:07 - 00:34:48:21
In terms of historical returns and this goes back to the quality of our underwriting, no one in Australia has ever published this information. It is, regularly published in the Northern hemisphere. And we always talked about once we reached scale, we would do this and in line with our commitment to be the most transparent and the most well understood business in our sector.
00:34:48:24 - 00:35:19:08
We're publishing the real returns that you can see on a vintage basis. The graph in the black is the multiple, the money multiple we expected at underwriting. What was our investment case? The bar in the orange is receipted cash collections, what we've actually got in the bank, and the bit more that we expect to recover. And you can see right across the board, we are exceeding our underwriting.
00:35:19:10 - 00:35:53:25
This goes back to the way this business is structured, from the delegation of the board, in the investment delegation that is provided to management. It is rigid, it is immovable, and it is very, very clear about where we can invest and where we cannot invest. And that is provided and delegated to a management team that is all heavily invested into this business with its wealth sitting alongside you as shareholders.
00:35:53:28 - 00:36:16:12
There are no short term incentives in this business, as I have repeated time and time again when we invest our capital, when we invest your capital, we're doing it with a long term outlook on what is best for this business. We do not do things for the short term. We make sure that we're investing for the long term to get great outcomes.
00:36:16:12 - 00:36:29:13
And that is why, from an underwriting perspective, we are outperforming across every vintage.
00:36:29:15 - 00:37:02:13
Finally, we've had lots of questions with respect to the litigation against PWC. It's very difficult to be more expensive than what we have on the screen, but it's been provided by our counsel. So that we can give you as much information as we possibly can with respect to how that litigation is progressing. In short, we have a claim against PWC for some $32 million, including the accrued interest.
00:37:02:15 - 00:37:32:20
They have not counterclaim against us and we are not aware of any reason they could counterclaim against us. This matter needs to continue to progress. And where we are now in that process is we have provided our expert evidence. We think that is compelling as we do our entire case. The matter will be returning before a judge to case management in March next year, late March next year.
00:37:32:22 - 00:38:13:21
And what will happen at that stage is that the judge will set out a detailed path through to, in likelihood, mediation and then to trial. So I said it all out and then we'll continue to progress through the matter. We will provide you with an update, most likely at the full year results next year. But we're very pleased with the way the matter is progressing and with the work that our council are doing and that our team has done over the last few years to ensure that we can recover that which, which we believe is due.
00:38:13:24 - 00:38:43:13
I just mentioned our alignment. The shareholders management remains the largest shareholder and exposure to this equity as you should. Well, expect when we make decisions, we are standing right beside you and we are there after you. That's the way it should be in small financials. It's the way it's always been at Pioneer. And it is a key part of our formula to success.
00:38:43:15 - 00:39:15:15
As I've also explained to people, when we make investment decisions, there are four people in the room and it is unanimous or it does not happen. We don't move from that. We don't budge on integrity or standards. It's critical to ensuring we get the best possible outcome every time in terms of our long term incentives. As you are aware, there are three yearly incentives.
00:39:15:18 - 00:39:31:25
We need to deliver on this year's performance. And then next year, for those incentives to vest, we must deliver a statutory net profit after taxation of at least $18 million.
00:39:31:27 - 00:39:39:21
We will do everything to deliver upon that number.
00:39:39:23 - 00:40:12:21
In terms of our outlook, as I've mentioned, there are strong tailwinds, for opportunities in our sector. We've guided to an investment of $80 million with held at that. We've got $65 million under contract already. We think there's some upside risk to this investment guidance late in the financial year, but we want to make sure we invest that money really, really well to start with, industry regulatory focus is clearly a big part of our industry.
00:40:12:21 - 00:40:36:06
It's what sets us apart. We've got a strong compliance record. We've got our NPS, which is an advantage. We continue to invest heavily in that part of our business. There remains this opportunity to realize some of the operating leverage in our business that's brought about through scale and also brought about through our new platform, which is on track to be delivering in 2025.
00:40:36:09 - 00:41:04:23
You have an exceptional and well tested and experienced management team working for you. They're very, very committed. Deeper than that, you've got an exceptional team of people, working through our business at every level. Only last week we had a celebratory dinner for people that have been with us for more than ten years. There was about 25 people at that dinner.
00:41:04:25 - 00:41:35:20
Which is quite remarkable when you think about we only started, 11 or 12 years ago. So, that was a great celebration. But those are people that are just incredibly committed to delivering for our shareholders and for our customers. And we reiterate our guidance. PDP investment of at least $80 million net profit after taxation for the full financial year of at least $9 million.
00:41:35:22 - 00:41:58:01
With that said, we have received one question, online. I'm more than happy to take any other questions online, should you wish to the, should you wish to submit them. But I'll answer that question now, which was with the additional capital from exercising the 80 cent listed options, assist in improving the balance sheet at all.
00:41:58:01 - 00:42:41:25
Is it required? Thank you for the question. It absolutely will assist in improving the balance sheet. There's no doubt about that. We're working hard to appropriately share our message. Share the growth story. We've had fantastic support from some of our new institutional shareholders, which we're just so grateful for. In terms of them also sharing the message and helping us as we, as we move through this next phase of the business where we're very keen to see those options exercised and, and, and hopefully and we're hopeful that that that will occur.
00:42:41:28 - 00:43:00:21
It's not required. We don't need the extra capital, but I can assure you it will be very, very, very well used in making sure we build resilience back into our business at a, at a very good right.
00:43:00:23 - 00:43:28:24
There are no more questions that have come through. That concludes my presentation. I thank you very much again for your attendance today. I thank you for your interest and support of Pioneer. And special thanks to my board. It's a lot of work. For a small board. We're very focused on a lot in our business, and I appreciate all of your efforts.
00:43:28:26 - 00:43:36:13
And to my executive as well. Thank you for everything that you do each and every day in our business. Thank you.