Barnacles, you are correct on the collections side of things. Debt is growing faster than the Financial assets in percentage terms. But is this nature of the business? They borrow to buy the PDP's and then look to strip them down and turn them back into cash. Presumably the banks are happy to lend and feel their loans are secure. The ratio of debt to FV of Financial assets has risen from 12.8% in FY14 to 57.46% @ FY18 (i am using the average FA balance).
As to limited headroom, I guess you need to buy the Keith John dream where he is predicting a cash injection from PDP liquidations of some $70m this half (v $51.5m in 1h). I'd like to think the level of debt will remain static or reduce some by June 2019. I will wait and see.
In the meantime, I will allow that jolly bunch of joksters (auditors) to ruminate on that effervescent and thrilling subject of Financial Asset valuations. Destined to be a best seller...NOT! Watching paint dry will surely pull more viewers.
(20min delay)
