I could not resist not replying after seeing the recent results )
Some facts
Fair value is creating artificial profits and in turn converts to dividends to be paid.
These fair value profits are for future financial years. Read my previous post - PNC only company in the world to fair value its PDL.
Look at timelines of dividends, capital raise, debt sales and restructure of loans.
Low cash balance at each reporting date. Capital raise to pay dividends disguised for the purchase of PDLs.
Jun14 div paid out of IPO.
2 Apr15 PNC says it sold $3m worth of its PDL assets. Used to pay divi? Dec14 div paid 17 Apr15. Jun15 div paid Oct15.
Dec15 PDL assets sold $1.4m. Check the timing of capital raise on 12 Apr16: $5.8m. Dec15 div $1.7m paid 29 Apr16 from capital raise? Jun16 div also paid from capital raise?
6 Apr17 capital and rights issue raises. Used to pay 28 Apr17 divi and Oct17 divi?
How was the $20m raised really spent?
$14m from PDL purchase.
MD 6 Apr17 ann: customers are non-defaulted customers, will not result in revenue increase in FY17, but in FY18. Why not?
Sold GMY investment shares purchased with IPO funds for a strategic purpose - Jun15 financial report. Sold few days before paying Apr18 divi - check GMY announcement. The record results this year includes the profit on sale of this investment. MD lost board seat on GMY. Not announced to market. Not announced to market is resignation of KMP chief risk officer from financial report but present in investors presentation??
$40m bond raised Mar18 before Apr18 divi payment. Apparently purchased to refinance its existing debts and personal lending business. Existing debts are 3.7%; bond rate 7.4%. Why borrow at 7.4% to repay loans of 3.7%? $40m bond - only $3m loaned to customers from SOFP and cash at bank $3.4m. From presentation $6m loaned as of now. So in just 4 months only $400,000 cash left from $40m borrowed? How can it pay Oct18 divi $4.7m and settle high liabilities and run the business?
Dividend Reinvestment Plans has returned millions to PNC.
Bank loans renegotiated earlier than their maturity dates on several occasions.
PNC has horrific debt levels. How much is the company really geared if you remove the fair value and measure the PDL at amortised cost, like all other companies? Ask PNC to provide a gearing ratio on cost comparable to CLH or CCP.
Lowest PDL amortisation rate in the industry.
Legal matters settled with IPO funds in FY14/15 to the Ombudsman.
Launch of a credit card product advised to the market 2014 prospectus, 17 Jun15, 21 Aug15, 1 Oct15 that was due to release in Feb16 never delivered. Jump on their website and try to apply for a credit card.
Opinion
Future profits have already been distributed by fair value.
PNC is running a ponzi style operation. Too good to be true.
The music has stopped. It will play again when shareholders pour more $ in.
DYOR
PNC Price at posting:
$3.52 Sentiment: Sell Disclosure: Held
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