Ann: Response to ASX Query - Half Year Accounts, page-35

Good observations on the technical side of things MadTrader, thanks for your input. 
Here's my layman like take on it, because the real issue is this: is the asset called 'Financial Assets at Fair Value' really worth $$224.6m at 1h19?  
I say the answer can only be determined by the ultimate Judge - CASH through the Bank Account and with PNC the Cash Flows Statement is the first thing I look at. There has to be a real good comparison of cash from liquidations with revenues otherwise I am leery.

I am sure the bankers who are owed some $150m watch the value ascribed to the Financial Assets like a hawk because it is the major company asset. Indeed they would be privy to all the analytics and historic evidence that gives PNC such confidence in their stated value...and you have to say they exude tremendous confidence in their position.

I am invested in PNC because of their business model and their deep research and understanding of how to extract maximum value from a ledger. It's a bit like watching a master butcher bone out a carcass to extract maximum dollars per kilo. And in the process they keep both their suppliers (Tier 1 lenders) and their customers (the debt defaulters) happy. Heck, look at their NPS +19 customer experience scorecard. Google it for its significance and then think about this...a scorcard like this for a 'debt collector'...unheard of...and all the more reason why Keith John is very entitled to say 'all PDL's are not the same we are different from our competiutors.' 

Cash is KIng and the message is watch the cash...particularly annuity style regular income which comes in clockwork month on month...and PNC is growing this month-on-month both in terms of numbers and the average monthly amount they pay.

So let's look at a few back of the enveope calculations of likely cash flows (figures taken from the 1h19 presentation slides)

50% of PDP liquidation cash comes from flexible payment schedules
They now have 22,183 customers payng an average of $239 (and rising gradually each year) for 30 months.
So, this alone will generate $159m in 2h19 and FY20 and FY211....and its sitting in the values ascribed to Financial Assets right now. No wonder there is no alarm from the bankers...they are out scot free!
To this I would think it fair to add 100% of the value of the PDP's purchased in 1h19 as they haven't had a chance to dismantle the 'carcass' yet...there's another 30m of value in the "Financial Assets" at 1h19...so $189m accounted for...and yes, yes, I know that DCF applies but let's not engage in gobbly-gook, this is a back of the cigarette pack calculation.
To take 50% of the value of the PDP's acquired in the 2hFY18 isn't too much of a stretch, after all they have only had 6 months to begin boning it out. Sorry to use butcher terms and my knife might be a little blunt, but I hope you'll agree its better than Douglas Craig's (auditor) blunt instrument, which he declined to produce. There's another $23m...total now $212m.

And so to the 'rats and mice'...back when Noah was floating his ark, I did a few liquidations and the rough rule of thumb was that there was always 10% of a debtors ledger in the rats and mice if you were prepared to wait for the serial dodgers, litigants and BS stories to play out... another $22m making $234m in value.

Yeah, I'm reasonably happy that the value is there in the ledger, particulalry when you have a professional outfit using advanced techniques doing the recoveries. I really like the way PNC 'test and measure' their different collection techniques and I am sure they will be using AI in the not too distant future. A bit different from the brusier jamming his big foot in the door to get a debt recovery.