Well I'm a cynic and think it is worth a punt. My grasp of the facts are hazy and should be checked!
Couple of years ago CBA decided the industry was unsavory and ceased providing loan facility. That was a warning. CCV issued some bonds for $100 m to replace CBA loan. Top end of town exited the stock. Price collapse came with a Class action event. CCV paid $10 m " go away" money settlement. This was equal 1 years profit. Next annual report then talked about "underlying" profitability. EZ Corp then shored up the balance sheet [forget how much] 12 months elapsed then EZ corp exited the directors that had stuffed up. They were 20 year men that didn't read the writing on the wall with their predatory practices and adjust to the times
Lawyers then commenced another class action.
In the meantime the new EZ directors have cleaned the place up.
There is increasing emphasis on car loans and less on "payday" loans.
A recent earnings guidance suggests a turnaround that is solid.
The price collapse has opened up an opportunity for EZ to pump more money in and increase control.
This money will in part be used to reduce debt which is a good thing.
EZ guys are no fools. They are buying in "gloom"
Downside risk is the roll out of another class action.
CCV Price at posting:
32.0¢ Sentiment: Hold Disclosure: Held
(20min delay)
