Ann: CLH Responds to shareholder's latest false claims, page-7

With the Balbec deal they got the unencumbered cash and talk about the call option. There was never really any mention of the terms of the put option (who holds the right, terms of exercise etc). If one strips out the gain from this deal and the gross cash flows (they accelerated 5 yrs cf into one) from the financials then the base collection metrics and profitability don't look nearly as crash hot as they might suggest. While they are no doubt compliant with standards, I get the point that not making sensible adjustments to normalise earnings for these items makes them look rosier - companies have a good habit of showing normalised earnings with favourable adjustments only. I wonder if thIs Is the poInt Lev Is alludIng to and If so there is some real potentIal merit to that vIew (whether ultImately rIght or wrong). If rIght It would essentIally say the business is performIng poorly but these one off transactIons mask that In the complIant statutory accounts.

One area I've always found interesting with CLH is the insistence of talking about one PDL amortisation rate as if there is only one portfolio. If they truly use the one percentage across a book with multiple purchase vintages (at different acquisition prices and thus by default different EIRs) that would appear to be very odd, especially when havIng to reforecast future cash flows each perIod end to determIne the amortIsed cost value and thus effectIve amortIsatIo (whIch woIld create gaIn/loss embedded In theIr numbers when dIscoInted at orIgInal EIR). Taking a singular unit of account view to the accounting approach I can't believe is compliant with AASB 9 and accounting standards, but hey they've been audited so they couldn't possibly be wrong....

(apologies for the typos, my phone's playing up...)