Appendix 4E and Annual Report
For the year ended 30 June 2023
Contents Page
Appendix 4E – Results for announcement to the market ....................................................................... 1
Corporate Directory ................................................................................................................................ 2
Pioneer Principles ................................................................................................................................... 3
Financial Highlights ................................................................................................................................. 4
Directors’ Report ..................................................................................................................................... 6
Environmental, Social and Governance (ESG) Report ........................................................................... 14
Auditors’ Independence Declaration .................................................................................................... 36
Corporate Governance Statement ........................................................................................................ 37
Financial Statements ............................................................................................................................. 40
Directors Declaration ............................................................................................................................ 97
Independent Auditors Report to the Members .................................................................................... 98
Shareholder information ..................................................................................................................... 104
Pioneer Credit Limited ABN 44 103 003 505
Appendix 4E
Preliminary Final Report
for the year ended 30 June 2023
(previous corresponding period 30 June 2022)
1. Appendix 4E – Results for announcement to the market
Key information
Revenue from ordinary activities*
Profit/(loss) from ordinary activities after
tax attributable to members
up
up
52%
101%
Net
for
profit/(loss)
attributable to members
the
period
up
101%
$’000
82,737
166
166
to
to
to
*Revenue from ordinary activities excludes interest income on bank deposits and loans to management.
Dividends per ordinary share / distributions
There is no provision for a final dividend in respect of the year ended 30 June 2023.
Financial Statements
Released with this Appendix 4E report are the following:
•
•
•
•
Consolidated Statement of Profit or Loss and Other Comprehensive Income together with notes
Consolidated Statement of Financial Position together with notes
Consolidated Statement of Changes in Equity, showing movements
Consolidated Statement of Cash Flows together with notes
This report is based on financial statements which have been audited.
Key ratios
Net tangible assets per fully paid ordinary share
Basic earnings/ (loss) earnings per fully paid ordinary share
30 June 2023
30 June 2022
(cents)
(cents)
38.81
0.19
29.72
(40.48)
1 | Appendix 4E and Annual Report
2. Corporate Directory
Directors
Mr Stephen Targett (Chairman effective 1 January 2023)
Mr Keith John (Managing Director)
Mr Peter Hall
Ms Michelle d’Almeida
Mr Michael Smith (resigned as at 31 December 2022)
Ms Andrea Hall (resigned as at 16 February 2023)
Company Secretary
Ms Susan Symmons
Principal Registered Office
Level 6
108 St Georges Terrace
Perth WA 6000
Share Registrar
Link Market Services Limited
Auditor
Solicitors
Level 12
250 St Georges Terrace
Perth WA 6000
RSM Australia Partners
Exchange Tower
Level 32/2 The Esplanade
Perth WA 6000
K&L Gates
Level 32
44 St Georges Terrace
Perth WA 6000
Bankers
FCCD (Australia) Pty Ltd (Fortress Investment Group)
Suite 19.02, Level 19, Gateway
1 Macquarie Place
Sydney NSW 2000
Stock Exchange Listings
Pioneer Credit Limited shares are listed on the
Australian Securities Exchange (ASX).
Website
www.pioneercredit.com.au
2 | Appendix 4E and Annual Report
Pioneer Principles
Be human
Choose integrity
Act with purpose
Our Purpose
We’re here to put an end to debt stress
We focus on
customer care
Our high NPS shows our
commitment to providing a
positive customer
experience
We buy impaired
credit
We partner with a range of
leading financial
institutions to purchase
outstanding debt
We provide
flexible solutions
We tailor solutions to help
our customers address their
account in a way that suits
their needs
3 | Appendix 4E and Annual Report
Financial Highlights
Total Income
EBITDA
EBIT
NPAT
$82.7m
FY22: $54.3m
▲ 52%
$86.1m
FY22: $60.6m
▲ 42%
$31.2m
FY22: $3.4m
▲ >100%
$0.2m
FY22: ($33.1m)
▲ >100%
PDP Investment
ERC
PDP Asset
PA Portfolio
$59.2m
FY22: $99.5m
$567.5m
FY22: $572.2m
$304.3m
FY22: $295.5m
$456.9m
FY22: 464.2m
Over 400 Pioneer people are helping 210,000 Australians experiencing debt stress
12% in WA
1% in NT
22% in QLD
6% in SA
30% in NSW
25% in VIC
1% in ACT
2% in TAS
Distribution of Pioneer’s Australian customers
4 | Appendix 4E and Annual Report
3. About Pioneer
Pioneer Credit Limited (‘Pioneer’) is an ASX listed (ASX: PNC) financial services business that provides
quality, flexible, financial services support to help everyday Australians experiencing debt stress out of
financial difficulty, and to assist them in resolving their outstanding debts. We have the trust of long-
term vendor partners to do the right thing and respectfully support customers to achieve financial
independence.
With more than 220,000 customers throughout Australia and New Zealand, our focus is on providing
them with exceptional levels of service, and a broad range of solutions, to help them achieve their
financial goals.
We grow our customer base by acquiring retail debt portfolios from our vendor partners. These
portfolios consist of individuals with financial obligations to us and are the cornerstone of our customer
relationships. We value and respect our customers greatly, and work with them over time so that they
can meet their obligations and progress toward financial recovery, and through this process evolve as
a ‘new consumer’.
Our vendor partners are Australia’s major banks, financial institutions, and non-bank lenders. Our
success has been built on long-lasting relationships, and while we have grown substantially, we remain
agile enough to meet our vendor partners’ business requirements.
Our key focus is providing commercial solutions to our financial sector partners. We never forget that
the reputation of our partners is paramount, and that how we approach the servicing of portfolios we
acquire, reflects on both Pioneer and our partners.
A focus on customer service
We continually invest in the ongoing training and development of our people to ensure we provide a
consistent customer service-oriented approach to customer engagement. We also monitor all
customer contact and are at the forefront of compliance best practice. This approach means we are
confident of delivering an industry-leading service to our partners.
Strong corporate culture
Pioneer has a strong corporate culture, built on three principles. They are: Be Human, Choose Integrity,
Act with Purpose. These principles are a very well-defined set of values that our people work and live
by. They form the core of what we expect from our people; they are embedded throughout the
organisation and underpin every interaction we have with our customers and our stakeholders.
5 | Appendix 4E and Annual Report
4. Directors’ Report
The Board of Directors present their report on the Consolidated Entity (‘the Group’ or ‘the Company’)
consisting of Pioneer Credit Limited and the entities it controlled at or during the year ended 30 June
2023.
Directors
The following were Directors of Pioneer during the financial year and at the date of this report:
Mr Stephen Targett (Chairman effective 1 January 2023)
Mr Keith John (Managing Director)
Mr Peter Hall
Ms Michelle d’Almeida
Ms Andrea Hall (resigned as at 16 February 2023)
Mr Michael Smith (resigned as at 31 December 2022)
Principal activities
Pioneer acquires portfolios of customers experiencing debt stress from Australia’s major banks,
financial institutions, and non-bank lenders.
Customers are acquired in tranches called Purchased Debt Portfolios (‘PDPs’) and our business model
relies on generating returns through providing a differentiated customer service to our customers and
vendor partners, and by carefully managing our Cost to Service (‘CTS’). We are disciplined when we
invest, relying on our extensive industry expertise, vendor relationships and considerable data sets and
analytics capability to only acquire where we know we can service those customers properly, at an
appropriate margin, and in a manner that supports our continued growth.
The returns that we generate are re-invested to grow our position as the preferred option for
employees, partners, and investors. We aim for long term, sustainable growth, and communicate to
all with transparency and fairness.
There are five key metrics which tie back to our strategic objectives and ensure that we maintain a
clear and consistent understanding of how we are performing as a business:
• Customer experience is measured through Net Promoter Score (‘NPS’);
• Our ability to generate positive and sustainable customer outcomes is measured through cash
collections, and the growth of our Performing Arrangement (‘PA’) portfolio; and
• The efficiency of our business is measured through CTS;
•
Investment capability and discipline is measured through Return on Investment (‘ROI’); and
• Employee satisfaction and engagement is measured through employee Net Promoter Score
(‘eNPS’).
6 | Appendix 4E and Annual Report
Review of operations
Pioneer’s FY23 financial performance will be recorded as a key milestone in the Group’s history, re-
establishing the Group’s profitability and re-engaging with equity investors and equity markets to retell
our story, following a remarkable series of events in the prior years. That we are here to tell this story
is testament to the work of the people at Pioneer, and their commitment and tenacity is why success
in the future is assured.
The Group had five key deliverables for the period;
1. Return to profitability;
2. Capitalise on opportunities to grow PDPs;
3. Grow the PA portfolio;
4. Realise our operational leverage; and
5. To thrive under increased regulation
1. Return to profitability
The corporate activity that required the Company to refinance at usurious interest rates has been
previously explained. Following refinancing in November 2021 to reduce those rates, the Group
forecast a return to profitability based on a two key factors;
1.
2.
A reduction in the cost of funds; and
An improvement in CTS
In addition, and pleasingly, CTS fell from 44% in FY22 to the lower end of our target range of 35% - 37%
of cash collections. The decrease in CTS reflects continued discipline in operations, profitable PDP
investment which drove increasing cash collections, as well as some remaining covid-19 stimulus
through government subsidies for trainees.
In the short term, we expect CTS to be somewhat volatile (though all within an acceptable range) as
we continue to drive operational performance and deploy new technology, principally the Core System
Replacement project (refer to the announcement to the ASX on 3 July 2023). With completion
scheduled for late FY24, the new core system will contribute to an improvement in the customer
experience we deliver, compliance outcomes we achieve and in time, continue to drive down our CTS.
Of course, profitability does not just occur because we simply reduce the cost of funds and improve
CTS. Operational excellence is essential in this business. What this means is investing our shareholders’
money in PDPs that are profitable, with minimal compliance risk, and then servicing those portfolios
well through their life. Pioneer has consistently done this, and even through the pandemic induced
lean years, Pioneer maintained its cash collections. Then, in FY23 cash collections rose sharply
following our deployment of capital late in the prior period, as we embarked on our return to growth.
7 | Appendix 4E and Annual Report
2. Capitalise on PDP opportunities
Pioneer continues to be selective in its deployment of available capital, having invested $60m into high
quality portfolios. This investment was across 18 vendors, six of which were first time partners with
Pioneer.
What has become very clear in the Australian market is that, in addition to vendors preferencing
quality service providers, there is a well understood and growing preference among non-bank lenders
in particular, to partner with groups that do not have competing products. As the only ASX listed
participant in Australia in the debt purchase sector that does not compete with its vendor partners,
Pioneer is growing market share and experiencing engagement at a level not previously experienced.
While we welcome these new relationships and opportunities, we are careful and considered
custodians of shareholders’ capital, and we embark on these new relationships with caution and,
where possible, with initially small investments so we can prove up our expectations. We have done
that across FY23, and as our confidence with these new vendor partners grows, we expect to deploy
significantly more capital in the coming years.
A continuing reference point for the value of our servicing approach is Pioneer’s five year agreement
with the Commonwealth Bank of Australia. This contract underpins some of the future growth of the
Company. Following a period of very low portfolio volumes from vendor partners, with current
economic pressures, we expect increased write-offs and vendor PDP volumes to rise.
3. Grow the PA Portfolio
Pioneer’s PA portfolio remained stable at $457m for FY23 (FY22: $464m), following a significant
increase in FY22 due to the acquisition of a large portfolio that contributed significant collections in
that period. The stable result is pleasing and results in a cumulative annual growth rate of 10% over
the past 5 financial years.
Pioneer continues to support customers on their journey to financial freedom and is particularly aware
of the increased economic pressures they continue to face. Our operational focus seeks to ensure fair
and reasonable outcomes for our customers.
The anticipated increase in investment opportunities discussed above will provide significant benefits
to the Company in the coming years:
• PAs continue to underpin the substantive part of the PDP valuation in Pioneer’s balance sheet,
as the most demonstrable, predictable and certain expected cash collections;
• An increase in contributions to cash collections in future periods, which underpin Pioneer’s
cashflow and top line performance; and
8 | Appendix 4E and Annual Report
• The opportunity to introduce new lower cost funding given repeatable cashflows which
international financiers both favour and are familiar with.
4 and 5. Realise our operational leverage and to thrive under increased regulation
Pioneer continues to make improvements across all business functions with significant investment in
IT systems, data and analytics and learning and development.
Throughout FY22 and FY23, Pioneer undertook comprehensive planning to identify its current and
future systems requirements. The Company selected a best-in-class core system for deployment,
together with a sequence of other projects under a transformation program umbrella, including
systems designed to modernise the data and analytics and operational risk functions.
Implementation of C&R Software’s Debt Manager Pro system of record commenced late in FY23. This
system is used extensively worldwide across the largest debt purchasers, large multinational banks and
a broad range of other industries and is expected to lead to an improvement in the customer
experience we deliver and compliance outcomes we achieve and allow us to operate in a more efficient
manner which will contribute further to lowering the CTS. Completion is expected by end of FY24, with
benefits to be realised in FY25 and beyond.
As our industry experiences unprecedented and increased regulatory oversight, Pioneer remains
committed to treating its customers with respect and ensuring that its processes in handling any
customer grievances are managed efficiently. Technology improvements have been implemented
within this function with efficiency gains expected to flow.
Modernisation of our data and analytics platform commenced in late FY23 and is expected to deliver
best practice data architecture, computing power and utilisation of new analytical technology.
9 | Appendix 4E and Annual Report
People
Pioneer continues to invest significant thought and resources into its people. Its People Strategy seeks
to:
• optimise Pioneer’s employee value proposition;
• attract and retain a skilled and diverse workforce that replicates Pioneer’s Customer base,
ensuring our talent pool reflects people of all backgrounds and experiences; and
• drive performance across the organisation to deliver business outcomes.
The purpose of the People Strategy is to continue to develop a skilled workforce that can deliver on
Pioneer’s Purpose ‘to put an end to debt stress’. This will be achieved through the creation of simple
systems and processes that will enhance the employee experience, such as:
• embracing new ways of working, supporting experimentation and learning;
• moving talent around the Company to support commercial outcomes;
•
focussing on the health and safety of our people; and
• promoting development of our people for internal movement and progression.
Our success in these objectives is measured by Engagement and eNPS and embedding a culture of
genuine care for customers, our people and partners. A recent comprehensive engagement survey
resulted in a 71% response rate, an engagement score of 79% and an eNPS of +10 (the all Australian
average is 73% and an eNPS of +1). Annual comprehensive engagement surveys continue with
quarterly pulse checks planned for future periods.
Economic conditions
While the Company's refinance in November 2021 saw decreased credit margins from previous years,
the RBA's numerous interest rate increases throughout FY23 had a direct impact on Pioneer, resulting
in a closing interest rate of 12.77% per annum across our facility. This cost Pioneer ~$6.6m more for
the period, than was reasonably expected heading into the financial year. The process to secure
refinancing opportunities for Pioneer, has commenced. Reducing funding costs is a key focus and a
reduction to, for example, 7%, would lead to an additional $12.1m in cash, which will drop to the
bottom line directly.
From an operational perspective, with macro-economic pressure driving supply, balanced against a
fully employed population with capacity to service their financial commitments, less competition for
portfolios and a vendor preference towards Pioneer, we expect to continue to benefit from the current
environment.
10 | Appendix 4E and Annual Report
Business risk statement
Every business faces uncertainties in the future. The ability to understand, manage and mitigate those
risks is a source of Pioneer’s competitive advantage.
The following key business risks are sources of regular Board attention with a number of key projects
underway to mitigate such risks:
Funding
There are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable. Pioneer’s existing debt facility consists of 4 tranches totalling $220.5M
available. The facility expires in November 2025.
The Company also has $55.5m in Medium Term Notes outstanding. These notes expire on 30
November 2026.
Pioneer continues to consider alternative and/or increased funding in order to reduce its cost of funds
and grow.
Purchased Debt Portfolios
In order to continue its profitable growth, Pioneer needs to be able to acquire PDPs at appropriate
prices and maximise the recovery of those accounts comprising the portfolio.
The availability of debt portfolios at appropriate prices and the ability to collect on those accounts is
affected by a number of factors, some of which are outside Pioneer’s control, including the level of
credit being extended to consumers, the percentage of such credit in arrears, the current economic
and regulatory climate, insufficient debt portfolios becoming available and increased competition in
the market.
Remediation programs from various vendor partners
This year’s financial performance has been impacted by the various remediation programs undertaken
across the banking and finance sector in Australia. Were these remediation programs to continue
longer than expected these may have an impact on future financial performance.
Technology
Pioneer is heavily reliant on technology to manage its day-to-day operations. Should an event or series
of events result in the loss of access to primary and business critical information and communication
technology systems, data processing capabilities and/or network connectivity for an extended period,
it would affect Pioneer’s ability to operate in the normal course of business and result in significant
financial risk in terms of loss of ability to liquidate portfolios and report on revenues and manage
working capital and cashflow. Refer above to view a summary of the Company’s ongoing digital
strategy and transformation project.
11 | Appendix 4E and Annual Report
Resourcing
Pioneer’s success depends on identifying, hiring, training and retaining skilled and knowledgeable
team members and retaining its existing trained workforce and attracting new personnel as it grows is
imperative. Competition is keen in the current tight employment market and Pioneer continues to
enhance its systems and processes to improve the employee experience.
Regulatory and legislative risks
Pioneer operates in an industry with a strict legal and regulatory framework. Any failure by Pioneer to
comply with applicable laws and regulations could adversely affect Pioneer’s reputation, its business
and/or result in substantial losses.
Pioneer is aware of the importance of regulatory compliance and potential adverse publicity
associated with any actual or alleged non-compliance. Regular staff training, close supervision and its
call review process assists with ensuring that a culture of regulatory compliance is maintained. Pioneer
has compliance systems to identify and rectify actual or potential instances of non-compliance. These
compliance systems include compliance and cultural review of employee calls to customers, regular
employee counselling and training in relation to actual and potential breaches and senior management
involvement in relation to any actual or potential non-compliance. This also assists in ensuring rapid
resolution of any customer complaints and disputes.
Pioneer devotes significant resources to regulatory compliance.
Risk Governance
Our risk governance framework is embedded in all our practices. Pioneer uses a combination of
different and complementary skills in assessing the material risks faced and our framework is built on
the 3 lines of defence model with accountability from our employees, risk compliance through our
processes, policies and procedures and independent oversight via internal audit reporting through to
our Board.
Pioneer’s risk processes are reviewed bi-annually by its Board with the goal of aligning risk taking with
its statutory requirements, strategic objectives, and capital planning.
Corporate governance
Pioneer is a good corporate citizen, committed to sound corporate governance practices that see each
of our customers, employees, vendors, shareholders, and other stakeholders treated with empathy,
respect, and transparency. We take these responsibilities, and our accountability, seriously. Pioneer
continues to adopt all ASX Corporate Governance Council Guidelines and Recommendations.
Our corporate governance framework is established to ensure effective engagement with all our
stakeholders. This framework is underpinned by our Pioneer Principles, which are a set of values that
we work and live by. The Pioneer Principles are embedded throughout the Company and underpin
every interaction we have with our customers and stakeholders. They assist us in producing an
inclusive and empowering culture.
12 | Appendix 4E and Annual Report
Regulation and compliance
Pioneer operates in a highly regulated environment.
Our regulatory landscape includes Australian Securities Exchange, Australian Securities (‘ASX’), and
Investments Commission (‘ASIC’), Australian Competition and Consumer Commission and Australian
Financial Complaints Authority, among a broad range of other regulators.
We are of course, not without fault, and our policy and response to mistakes remain very certain. That
is, where we are at fault or error, we will call that out without question, and we will honestly and
expeditiously remedy that fault to return our customer, or any other impacted party, to at least the
position they were in prior. We care deeply for people, and we work hard to demonstrate that daily.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Events since the end of the financial year
No other matter or circumstance has occurred subsequent to the year-end that has significantly
affected, or may significantly affect, the operations of the Group, the results of those operations or the
state of affairs of the Group or economic entity in subsequent financial years.
Environmental regulation
The Company is not affected by any significant environmental regulations.
13 | Appendix 4E and Annual Report
Environmental, Social and Governance (ESG) Report
Pioneer believes that it can play an important role in lifting social, economic, and environmental
sustainability. Our approach to diversity and inclusion is captured in our statement ‘Belonging’, and we
set a standard for our group and people, starting with those we employ being ‘founded in good’.
Environment Stewardship
Social
Governance and Ethics
• Premise location: Perth, Western Australia, which has a 4
Star NABERS rating - High level of energy efficiency and
environmentally conscious design in the office space which
reflects the Company’s consideration of its footprint impact.
• Paperless environment: Reduced number of laser printers
across its offices to 2, and moving document signing to digital
forms, by email.
• E-waste: All end of life equipment that we are unable to sell
or donate to charitable groups, are disposed as e-waste.
• Pioneer considers the social impact of everything we do.
• Our customers and staff are key to the success of our business
• We ensure that all our staff are treated well, valuing diversity
and making sure everyone is included.
• Key policies such as Code of Conduct, Whistleblower, Family
and Domestic Violence, and Grievance Management ensures
our commitment in governance and ethics.
• A vast majority of our vendor partners are regulated by APRA,
and we adopt much of APRA’s governance framework.
• Committing to transparency, accountability and prudent
oversight, we uphold the highest standards of governance to
safeguard stakeholders and the stability of our financial
systems.
14 | Appendix 4E and Annual Report
Pioneer Social Pillars
Ethical debt
recovery
Prioritised
mental
health &
wellness
Human
rights
Modern slavery &
human trafficking
assessment
Charitable
donations
Diversity
1. Ethical Debt Recovery
The vision of Pioneer Credit is ‘to put an end to debt stress’.
We provide a range of flexible payment options tailored to our customers' needs, enabling them to
choose terms that align with their circumstances. We work with our customers to ensure the
arrangements they make with us are sustainable.
We have an approach to dealing with customers experiencing hardship where generally we do not
require them to prove that. We accept their view of their circumstances at face value. This saves
emotional pressure for our customer and allows us to move more quickly to working to resolve their
debt stress completely.
For customers that are most challenged, we provide debt waivers. During the year ended 30 June 2023,
we provided over $2.4m in debt waivers.
2. Prioritising Mental Health and Wellness
We are dedicated to fostering a positive and supporting work environment including with policies that
encourage open conversations about mental health, working to eradicating stigma associated with
discussing mental health, or mental health more generally and providing resources such as employee
assistance programs, participation in ‘R U OK?’ Day, and flexible working arrangements.
We recognise that by prioritising mental health and wellness, we enhance employee morale and
productivity but also contribute to a more compassionate and empathetic society as a whole.
3. Human Rights
Pioneer is committed to operating in accordance with the International Bill of Human Rights and
supports and respects the human rights of everyone it works with and complies with the appropriate
human rights legislation in the countries in which it operates. In addition to this, we have a
comprehensive approach to Modern Slavery and Human Trafficking.
15 | Appendix 4E and Annual Report
In short, Pioneer requires the highest ethical practices and professional standards of its employees and
suppliers and expects them to:
•
commit to and comply with our Code of Conduct and Pioneer Principles;
• value and respect all people by protecting human rights;
• be aware that human rights are universal and fundamental rights that preserve the inherent
freedom, dignity and equality of all human beings;
•
comply with international human rights laws;
• manage their operations and their own supply chain guided by the United Nations Guiding
Principles on Business and Human Rights;
•
commit to a workplace free from workplace bullying, harassment, victimisation, and abuse,
unlawful or inhumane treatment; and
• provide fair pay and working conditions for employees.
4. Charitable Donations
Pioneer has a long history of giving back to the communities in which it operates. Over the past twelve
months we have donated financially to 9 different organisations.
Our largest staff driven campaign is in December where, rather than buying Christmas presents for
each other, our team buy vouchers for gifts to children that are hospitalised over the holiday period.
This amount is then matched by the Company and in FY22 this programme contributed $18,000 to
ToyBox.
Supporting this programme is the opportunity for our people to spend a day wrapping presents for
Perth Children's Hospital.
5. Diversity
We have always recognised the value of a diverse workforce, long before gender targets were a thing.
Our approach to diversity and inclusion is unique, and captured in our simple but very powerful
statement ‘Belonging’.
At Pioneer, Belonging exhibits itself in many ways. It starts with our people knowing they can truly
bring their full self to their workplace.
Belonging is more than acknowledging diversity through a ‘seat at the table’ culture. We aim to amplify
every person's voice, remove barriers and appreciate each other for their uniqueness.
Diversity is a fact. Inclusion is a behaviour. Belonging is the emotional outcome that we want Pioneer’s
culture to be known for.
When you consider our statement ‘Belonging’ fully you will see our goals are ambitious. We recognise
that. We also recognise that we do not always meet them. But we do try, and where we fall short we
are honest about that, and take full responsibility.
16 | Appendix 4E and Annual Report
Female Gender Proportion metrics data captured at 30 June 2023
Staff Group
Executive
Senior Leadership Team
Employee
FY23
40%
50%
58%
Age Diversity metrics – number of employees in each age bracket. Data captured at 30 June 2023
Under 25
25 -34
21%
37%
35-44
24%
45-54
55-64
12%
5%
65+
1%
7. Future Outlook
In FY24, we have committed to advancing our ESG outcomes and have committed to forming a
committee to consider and advise the Executive and Board with respect to ESG considerations across
our operation.
17 | Appendix 4E and Annual Report
Information on Directors
Mr Stephen Targett
Independent Non-Executive Chairman
Experience and expertise
• Appointed a Director in June 2022
• Appointed Chairman on 1 January 2023
• Extensive financial services experience as a board member and
an executive in Australia and overseas
• Current Chairman of Member Owned Bank Police & Nurses
Limited (P&N), former Chair of BCU, a division of P&N and
Director of CPT Global Limited.
• Previously CEO of RACQ Bank and in successive executive
positions, successfully led National Australia Bank’s European
services, Lloyds Banking Group’s wholesale and international
division and ANZ’s institutional bank.
Listed Company Directorships
including those held at any
time in the previous 3 years
Chairman – P&N Bank
Director – CPT Global Limited
Special responsibilities
Member of Audit and Risk Management Committee
Chair of People, Remuneration and Nomination Committee
Interests in share and options Ordinary Shares
Options (Listed)
136,363
136,363
Mr Keith John
Managing Director
Experience and expertise
• Founder of Pioneer Credit with over 25 years’ experience in the
financial services industry
• Widely regarded expert in the impaired credit sector in Australia
• Director of Midbridge Investments Pty Ltd and Bondi Born.
Listed Company Directorships
including those held at any
time in the previous 3 years
Nil
Special responsibilities
Managing Director
Interests in share and options Ordinary Shares
12,347,934
Member of People, Remuneration and Nomination Committee
Options (unlisted)
Options (Listed)
8,000,000
4,527,273
18| Appendix 4E and Annual Report
Mr Peter Hall
Independent Non-Executive Director
Experience and expertise
Listed Company Directorships
including those held at any
time in the previous 3 years
• Appointed a Director of Pioneer in January 2022
• Significant career experience across financial services, with
specific expertise in credit risk in Australia, including five years
with Genworth Financial Australia and New Zealand, initially as
its Managing Director and later as Country Executive.
• Previously seven years at GE Mortgage Insurance Australia and
New Zealand, the final five years as Managing Director and Chief
Executive Officer
BNK Banking Corporation
Limited
from 15 Nov 2015 to 31 October
2022.
Special responsibilities
Chair of Audit and Risk Management Committee
Member of People, Remuneration and Nomination Committee
Interests in share and options Ordinary Shares
225,000
Ms Michelle d’Almeida
Independent Non-Executive Director
Experience and expertise
• Appointed a Director in June 2022
• Former Managing Director of News Corporation’s Sunday Times
and Perth Now
• Non-Executive Director of Perth Airport and ACTIV Foundation
• Previously Non-Executive Director of Community Newspaper
Group WA and Variety the Children’s Charity
Listed Company Directorships
including those held at any
time in the previous 3 years
Nil
Special responsibilities
Member of Audit and Risk Management Committee
Member of People, Remuneration and Nomination Committee
Interests in share and options Ordinary Shares
Options (Listed)
36,363
36,363
19 | Appendix 4E and Annual Report
Ms Andrea Hall
Independent Non-Executive Director
(resigned 16 February 2023)
Experience and expertise
• Appointed a Director of Pioneer in November 2016 and resigned
on 16 February 2023.
Mr Michael Smith
Independent Non-Executive Chairman
(Resigned 31 December 2022)
Experience and expertise
• Appointed Chairman of Pioneer in February 2014 and resigned on
31 December 2022.
Meeting of Directors
The number of meetings held, and attended, by the Directors during the year ended 30 June 2023 was:
Name
Board Meetings
Committee Meetings
Audit and Risk
Management
People,
Remuneration and
Nomination
Attended
Held
Attended
Held
Attended
Held
Mr Stephen Targett
Mr Keith John
Mr Peter Hall
Ms Michelle d’Almeida
Mr Michael Smith¹
Ms Andrea Hall²
¹ Resigned 31 December 2022
² Resigned 16 February 2023
14
14
14
14
10
11
14
14
14
14
10
11
5
n/a
5
5
3
4
5
n/a
5
5
3
4
5
5
5
5
2
2
5
5
5
5
2
2
20 | Appendix 4E and Annual Report
Company Secretary
Ms Susan Symmons joined Pioneer as Company Secretary and General Counsel on 1 October 2015. Ms
Symmons has over 25 years’ corporate experience including positions with Heytesbury Pty Ltd, Evans
& Tate Limited, Automotive Holdings Group Limited, and Helloworld Limited. Ms Symmons holds a
Bachelor of Commerce from Curtin University and a Master of Business Law from UNSW and is a
member of the Institute of Company Directors and Governance Institute of Australia.
Remuneration Report - Audited
This Remuneration Report explains the Board’s approach to executive remuneration and the
remuneration outcomes for the Company’s Key Management Personnel (‘KMP’) for the year ended 30
June 2023.
Overview
KMP includes all directors and executives who have responsibility for planning, directing, and
controlling material activities of the Company. In this report ‘executive’ refers to KMP excluding Non-
Executive Directors.
The Remuneration Report for the year ended 30 June 2023 has been prepared in accordance with
section 300A of the Corporations Act 2001 and has been audited under Section 308(3C).
List of KMP
Directors
Mr Stephen Targett
Independent Non-Executive Chairman
Mr Keith John
Mr Peter Hall
Managing Director
Independent Non-Executive Director
Ms Michelle d’Almeida
Independent Non-Executive Director
Mr Michael Smith
Independent Non-Executive Chairman
(resigned as at 31 December 2022)
Ms Andrea Hall
Independent Non-Executive Director
(resigned as at 16 February 2023)
Executives
Ms Susan Symmons
Company Secretary
Ms Andrea Hoskins
Chief Operating Officer
Mr Barry Hartnett
Chief Financial Officer
Mr Joseph Terribile
Chief Information Officer
(resigned as at 30 June 2023)
21 | Appendix 4E and Annual Report
Remuneration policy and link to performance
In setting the Company’s remuneration strategy, the Board is committed to a framework which:
a) Motivates executives to deliver long term sustainable growth within an appropriate control
framework;
b) Demonstrates a clear and strong correlation between performance and remuneration; and
c) Aligns the interests of executives with the Company’s shareholders.
Structuring executive remuneration to align with the life of the assets Pioneer acquires is consistent
with Pioneer’s differentiated customer servicing approach and reflects the Board’s commitment to
maintaining an executive team that is focused on making decisions for the long-term benefit of the
Company.
To achieve this, in part, the Board has determined that the Company will not award Short Term
Incentives (‘STIs’) to any member of its executive or leadership teams.
Executives are incentivised based on Long Term Incentives (‘LTIs’) through the issue of securities (in the
form of Performance and Indeterminate Rights (‘Rights’) or Ordinary Shares) under the Pioneer Credit
Limited Equity Incentive Plan (‘Plan’).
The terms of the Rights, generally are:
a) Rights vest over a period of 2 to 5 years;
b) Rights are issued for Nil consideration;
c) Performance Rights convert to Ordinary Shares in the capital of Pioneer on a one-for-one basis;
d) Indeterminate Rights may convert to Ordinary Shares in the capital of Pioneer on a one-for-one
basis or, alternatively, the Board may determine in its absolute discretion that a vested
Indeterminate Right will be satisfied by the Company making a cash payment in lieu of allocating
Ordinary Shares at the 5 day Volume Weighted Average Price (‘VWAP’) prior to each vesting date;
e) Conditions may include the executive being employed at the vesting date and a minimum VWAP
to be achieved before vesting occurs.
22 | Appendix 4E and Annual Report
Performance
The following table shows the statutory key performance indicators of the Group over the last five
years.
2023
$’000
2022
$’000
2021
$’000
2020
$’000
2019
$’000
Profit/(loss) for the year attributable to owners of
the Group
166
(33,094)
(19,655)
(40,084)
4,281
Basic earnings (loss) per share (cents)
0.19
(40.48)
(30.43)
(63.36)
Dividend payments paid in financial year
Paid and relating to prior years 2H performance
Paid and relating to current year 1H performance
-
-
-
-
-
-
Dividend payout ratio
Closing share price
N/A
$0.31
N/A
$0.42
-
-
-
-
-
-
N/A
N/A
6.88
7,476
4,752
2,724
N/A
$0.50
$0.29
$2.70
(Decrease) / Increase in share price
(26.2)%
(17.0)%
75.4%
(89.4)%
(14.8)%
Remuneration governance
The Board has a People, Remuneration and Nomination Committee (‘PRNC’) which was formed on 6
July 2022, merging the Remuneration and Nomination Committees. The PRNC has a Charter setting
out its responsibilities and is supported by a robust internal framework, which includes:
• A strong and embedded corporate culture, built around the Pioneer Principles; and
• A Delegation of Authority that specifies delegations from the Board to the Managing Director and
from the Managing Director to executive.
The elements of this framework are regularly reviewed and well understood throughout the Company.
Role of the PRNC
The PRNC is responsible for making recommendations to the Board on:
• Base salaries for executives, and Board and Committee fees for non-executive Directors; and
• The adequacy and structure of any incentives, including equity-based remuneration plans, and the
quantum provided to executives.
The Committee reviews its remuneration strategy at least annually to ensure that remuneration
structures are fair and support the attraction and retention of quality people who are aligned to, and
can deliver on, the Company’s strategy.
As required under the ASX Corporate Governance Principles, neither the Managing Director nor any
other executive participates in any decision relating to their own remuneration, nor that of their peers.
23 | Appendix 4E and Annual Report
The Corporate Governance Statement and the PRNC Charter provides full details of this Committee’s
role.
Use of remuneration consultants
To ensure the PRNC is fully informed when making decisions it will periodically seek external advice.
Any appointment of an external advisor is made in accordance with the ASX Corporate Governance
Principles.
The Company has previously engaged consultants to assist in the review of remuneration of its
executives. In May 2022, a remuneration consultant was appointed with the intention to review and
support an update of the LTI framework as part of our remuneration strategy.
Securities trading policy
The Securities Trading Policy imposes trading restrictions on all directors, employees, contractors and
consultants who are considered to be in possession of market sensitive information.
The policy sets out prohibited trading periods which include:
• The 30-day period prior to, and 3-day period after, release of the full year and half year results; and
• The 30-day period prior to, and 3-day period after, the AGM.
Executives are prohibited from to hedging their exposure to any securities held in the Company.
Executive remuneration
The Board recognises that satisfying appropriate remuneration expectations is important in attracting
and retaining quality people.
As an acquirer of assets that typically liquidate over a period of up to 10 years, the Board recognises
the importance of appropriately incentivising executives such that they are accountable for the most
significant part of tenure of acquired assets. In that regard, executives are primarily incentivised with
equity which vests over a medium time frame.
Structuring employee remuneration to align with the life of the assets Pioneer acquires is consistent
with Pioneer’s differentiated servicing approach and reflects the Board’s commitment to maintaining
an executive that is focused on making decisions for the long-term health of the Company.
Executives may be provided LTIs through the issue of Rights in the Company, which ensures executives
are retained and incentivised to continue delivering sustainable long-term earnings of the Company.
In limited cases, the Board may recognise individuals by making an ex-gratia payment.
24 | Appendix 4E and Annual Report
Fixed remuneration
Fixed remuneration consists of base salary and superannuation as per the Superannuation Guarantee
(Administration) Act 1992.
The Managing Director reviews the performance of his executives by meeting each at least quarterly
to discuss their performance, and then separately assesses the performance of the executive team.
The review process is consultative in nature and contains an assessment of the executive’s
performance against their responsibilities and the Company’s expectations.
The Chair meets regularly with the Managing Director to discuss all matters pertaining to the
operations of the Company including individual performance, strategy, leadership, management, and
financial performance. The Chair also obtains feedback from other Directors on the performance of
the Managing Director, at least twice per year and provides that feedback back to him. The PRNC
completes a formal performance evaluation of the Managing Director at least annually against the
stated objectives.
Remuneration for all executives is reviewed at least annually. There is no guaranteed increase in any
executive’s employment contract.
Long term incentives
At the Annual General Meeting (‘AGM’) held on 29 October 2014, shareholders approved the Pioneer
Credit Equity Incentive Plan (‘the Plan’). At the 2017 and 2020 AGMs the Company refreshed the Plan
under ASX Listing Rule 7.2 (Exception 13). The Plan will be put to shareholders at the 2023 Annual
General Meeting to be refreshed again.
The Plan provides participants with an equity incentive that recognises their contribution to the
achievement by the Company of its strategic goals and to provide a means of attracting, rewarding,
and retaining skilled employees. Proposed grants of LTI are awarded after considering the performance
of the executive over the previous 12 months, and then considered with the executive’s relative value
to the Company in the future.
The Plan is currently being modernised to provide executives and shareholders greater alignment of
outcomes and clarity on what the targets are for any payment to be made under it, and the amount
that will be paid on the achievement of targets. This intended change to the Plan, which has occurred
on advice from the Company’s remuneration consultants will be fully explained to, and where required,
presented to shareholders for approval.
25 | Appendix 4E and Annual Report
Long term incentive awards in place during the year
LTI awards were made under the Plan during the period as follows:
Instrument
Quantum
Grant Date
Key performance
measures
Performance Rights for Ordinary Shares
250,000
1 July 2022
Employment at vesting date
Performance period
1 July 2022 to 1 July 2025
Dividends
No dividends are paid on Performance Rights
Fair value, vesting date
and fully vested period
schedule
$54,375
$54,375
1 July 2024
1 July 2025
50%
50%
Non-Executive Director Arrangements
On appointment to the Board, each Non-Executive Director enters into an agreement with the
Company which sets out the fixed fee policy for time and responsibilities, that are not linked to
individual performance.
Non-Executive Directors fees for FY23 were:
• Chairman Fee
• Audit and Risk Management Committee Chair
• Non-Executive Director
$160,000 (plus Superannuation)
$120,000 (plus Superannuation)
$100,000 (plus Superannuation)
A Non-Executive Director is not entitled to receive any performance-based fee. They may be entitled
to fees or other amounts, as the Board determines, where they perform duties outside the scope of
their ordinary duties and are entitled to be reimbursed for out of pocket expenses reasonably incurred.
The maximum pool of non-executive director fees approved by shareholders at the 29 November 2018
AGM was $800,000. Non-Executive Director fees have remained the same since 27 September 2017.
26 | Appendix 4E and Annual Report
Statutory remuneration disclosures
The following tables details KMP renumeration in accordance with applicable accounting standards.
Statutory remuneration tables
Non-Executive Directors
Fixed remuneration
Variable remuneration
Year
Cash
salary
Non-
monetary
benefits
Annual
& long
service
leave
Post-
employ
ment
benefits
Termina
tion
benefits
Cash
bonus
Post-
employ
ment
benefits
Options
Total
Indet
ermin
ate
rights
$
$
$
$
$
$
$
$
$
$
Mr Stephen Targett
2023
2022
127,692
100,000
Mr Peter Hall
2023
2022
106,692
100,000
Ms Michelle d’Almeida
2023
2022
100,000
100,000
Mr Michael Smith1
2023
2022
86,154
160,000
Ms Andrea Hall2
2023
2022
Total
2023
85,348
120,000
505,886
2022
580,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,408
10,000
11,203
10,000
10,500
10,000
9,046
16,000
3,392
12,000
47,549
58,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
141,100
110,000
117,895
110,000
110,500
110,000
95,200
176,000
88,740
132,000
553,435
638,000
1 Mr Michael Smith resigned on 31 December 2022.
2 Ms Andrea Hall resigned on 16 February 2023.
27 | Appendix 4E and Annual Report
Executive Director
Fixed remuneration
Variable remuneration
Year
Cash
salary
Non-
monetary
benefits
Annual
& long
service
leave
Post-
employmen
t benefits
Terminati
on
benefits
Cash
bonus
Options
Total
Indeter
minate
rights
Post-
employ
ment
benefit
s
$
$
$
$
$
$
$
$
$
$
Mr Keith John
2023
778,500
11,718
18,303
2022
777,623
12,906
20,807
25,292
27,500
-
-
-
-
-
-
426,400
37,099
1,297,312
426,400
274,734
1,539,970
Executive Key Management Personnel
Fixed remuneration
Variable remuneration
Year
Cash
salary
Non-
Monetary
benefits
Annual
&
long
service
leave
Post-
employment
benefits
Termi
nation
benefi
ts
Cash
bonu
s
Options
Total
Performa
nce
rights
Post-
empl
oyme
nt
bene
fits
$
$
$
$
$
$
$
$
$
$
Ms Susan Symmons1
2023
2022
280,000
11,718
7,736
295,894
12,906
41,495
Ms Andrea Hoskins
2023
2022
450,000
11,718
26,185
446,000
12,906
25,436
Mr Barry Hartnett
2023
2022
450,000
11,718
52,121
445,385
12,906
41,560
Mr Joseph Terribile2
2023
2022
320,000
77,254
12,009
190,769
5,772
12,933
Mr Jason Musca3`
25,292
27,500
25,292
27,500
25,292
27,500
25,292
14,861
2023
2022
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
91,172
2023
2,278,500
124,126
116,354
126,460
-
2022
2,155,671
57,396
142,231
124,861
91,172
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1Ms. Susan Symmons transitioned to 0.8 Full Time Equivalent during the 2022 financial year
2Mr. Joseph Terribile commenced effective 30 November 2022 and resigned on 30 June 2023.
3Mr. Jason Musca commenced effective 25 May 2020 and resigned effective 4 June 2022
-
-
-
-
-
-
-
-
-
-
24,243
348,989
20,547
398,342
17,742
530,937
68,054
579,896
101,143
640,274
176,426
703,777
-
-
-
-
434,555
224,335
-
91,172
426,400
180,227
3,252,067
426,400
539,761
3,537,492
28 | Appendix 4E and Annual Report
Proportion of fixed and variable remuneration
The following table shows the proportion of remuneration that is fixed and that which is linked to
performance:
Name
Executive Director
Fixed
remuneration
At risk – STI
At risk – LTI
Mr Keith John
2023
64%
Executive Key Management Personnel
Ms Susan Symmons
Ms Andrea Hoskins
Mr Barry Hartnett
Mr. Joseph Terribile
2023
2023
2023
2023
93%
97%
84%
100%
-
-
-
-
-
36%
7%
3%
16%
-
Contractual arrangements with senior executives
The terms of employment for the Company’s executives are formalised in service agreements. There
are no benefits payable to any executive on termination. The significant provisions of each service
agreement are:
Employee
Position
Salary
Mr Keith John
Managing Director
Ms Susan Symmons Company Secretary
Ms Andrea Hoskins Chief Operating
Officer
Mr Barry Hartnett
Chief Financial
Officer
Mr Joseph Terribile
Chief Information
Officer
$778,500 per
annum plus
superannuation
$350,000 per
annum plus
superannuation
pro-rata on a 0.8
FTE basis
$450,000 per
annum plus
superannuation
$450,000 per
annum plus
superannuation
$320,000 per
annum plus
superannuation
Term of agreement and notice
period
Continuing agreement with 12
months’ notice by either party
Continuing agreement with 3
months’ notice by either party
Continuing agreement with 6
months’ notice by either party
Continuing agreement with 6
months’ notice by either party
Continuing agreement with 3
months’ notice by either party
29 | Appendix 4E and Annual Report
1. Security holdings held by KMP
The tables below show the number of Rights, Options and Ordinary Shares in the Company held during the
financial year by KMP and entities related to them.
Performance rights or indeterminate rights
Name
Balance at the start
of the year
Granted Vested
Forfeit
Unvested
Balance at
the end of
the year
Indeterminate Rights
Executive Director
Mr Keith John
450,000
-
(375,000)
Performance Rights
Executive Key Management Personnel
Ms Susan Symmons
325,500
50,000
(7,500)
Mr Barry Hartnett
1,542,500
Ms Andrea Hoskins
Mr Joseph Terribile1
600,000
-
-
-
-
(35,000)
-
-
Total
2,918,000
50,000
(417,500)
-
-
-
-
-
-
75,000
75,000
368,000
368,000
1,507,500
1,507,500
600,000
600,000
-
-
2,550,500
2,550,500
1 Mr Joseph Terribile commenced effective 30 November 2022 and resigned on 30 June 2023.
30 | Appendix 4E and Annual Report
Listed Options
These options were issued where a member of KMP participated in the Company’s priority offer
completed on 18 May 2022. These options have an exercise price of $0.80 and expire on 31 March
2025.
Name
Non-Executive Directors
Mr Stephen Targett
Mr Peter Hall
Ms Michelle d’Almeida
Ms Andrea Hall1
Mr Michael Smith2
Total – Non-Executive Directors
Executive Director
Mr Keith John3
Executive Key Management Personnel
Ms Susan Symmons
Mr Barry Hartnett
Ms Andrea Hoskins
Mr Joseph Terribile4
Total – Executive Key Management
Personnel
Balance at
the start of
the year
Issued
Other
Balance at the
end of the year
136,363
-
36,363
-
36,365
209,091
-
-
-
-
-
-
-
-
-
-
(36,365)
(36,365)
136,363
-
36,363
-
-
172,726
2,727,273
- 1,800,000
4,527,273
36,363
454,545
272,727
272,727
3,763,635
-
-
-
-
-
-
-
-
(272,727)
36,363
454,545
272,727
-
-
5,290,908
Total held by KMP
3,972,726
- 1,490,908
5,463,634
1 Ms Andrea Hall resigned on 16 February 2023
2 Mr Michael Smith resigned on 31 December 2022. These options continue to be held by him at the date of this report
3 Entities related to Mr Keith John purchased options on-market during the year
4 Mr Joseph Terribile commenced effective 30 November 2022 and resigned on 30 June 2023.
31 | Appendix 4E and Annual Report
Share Purchase Facility
250,000 Ordinary Shares remain from the shares issued to executives (excluding the Managing
Director) under a share purchase facility of 18 July 2017. The key terms are:
a) The price of each Share was equal to the 5-day VWAP as at 1 July 2017 (namely $2.2864);
b) The facility accrues interest at normal commercial rates;
c) The shares are secured for the benefit of the Company.
d) All dividends paid on any Shares owned by the executive will be applied in full against the facility;
and
e) The facility is not recognised as a loan as the Company only has recourse to the value of the Shares.
Name
Balance at the
start of the year
Granted as
compensation
Repaid during
the year
Balance at the
end of the year
Executive Key Management Personnel
Ms Susan Symmons
250,000
-
-
250,000
Management Loans
In May 2022, Loans were issued to four executives for the purposes of acquiring shares under the
Priority Offer completed on 18 May 2022. The shares were issued at a purchase price of $0.55 with an
attaching Listed Option on a 1 for 1 basis, with an exercise price of $0.80 expiring in March 2025.
The loans are on a full recourse basis, with interest payable monthly at a rate of 5% per annum and are
secured by the underlying shares.
The Company engaged an external advisor to confirm that the transaction was of an arm’s length
nature and no employee benefits have been recognised in relation to the loan or share transaction.
Joe Terribile ceased employment on 30 June 2023. It was agreed by the Board his shares would be
repurchased by the company at a 5 day VWAP prior to 30 June 2023 and the balance of the loan be
written off with no further recourse to him. The value of the portion written off was $65,536.
Name
Balance at the start
of the year
Interest paid for
the year
Loans
extinguished
1,500,000
250,000
150,000
150,000
75,103
12,517
7,510
7,510
-
-
-
(150,000) 1
2,050,000
102,640
(150,000)
1,900,000
Balance at
the end of the
year
1,500,000
250,000
150,000
-
Mr Keith John
Mr Barry Hartnett
Ms Andrea Hoskins
Mr Joseph Terribile
Total
1 Includes loan write-off of $65,536
32 | Appendix 4E and Annual Report
Unlisted Options
Name
Balance at
the start of
the year
Granted Vested Forfeited Balance at
the end of
the year
Vested
Unvested
Executive Director
Mr Keith
John
8,000,000
-
-
-
8,000,000
5,000,000 3,000,000
Shareholdings
Name
Non-Executive Directors
Mr Stephen Targett
Mr Peter Hall
Ms Michelle d’Almeida
Mr Michael Smith1
Ms Andrea Hall2
Total – Non-Executive Directors
Executive Director
Mr Keith John
Executive Key Management Personnel
Ms Susan Symmons
Mr Barry Hartnett
Ms Andrea Hoskins
Mr Joseph Terribile3
Total – Executive Key Management
Personnel
Balance at the
start of the year
Other changes
during the year
Balance at the end
of the year
$
$
$
136,363
-
-
225,000
36,363
882,305
97,887
1,152,918
-
(882,305)
(97,887)
(755,192)
136,363
225,000
36,363
-
-
397,726
11,242,934
1,030,000
12,272,934
497,570
773,370
272,727
272,727
13,059,328
15,834
160,000
125,000
(272,727)
1,058,107
513,404
933,370
397,727
-
14,117,435
Total held by the KMP
14,212,246
302,915
14,515,161
1 Mr Michael Smith resigned on 31 December 2022. These shares continue to be held by him at the date of this report
2 Ms Andrea Hall resigned on 16 February 2023 and this was the balance of her shareholding as at this date.
3 Mr Joseph Terribile commenced effective 30 November 2022 and resigned on 30 June 2023.
33 | Appendix 4E and Annual Report
2. Other transactions with KMP
During the year, the Company renegotiated its lease at 108 St Georges Terrace. As part of the lease
negotiations a fit-out incentive was provided. Alana John Design, a design firm owned by the Managing
Director’s wife was appointed to design and project manage the fit out of the leased space following a
competitive process to select a firm, which the Managing Director was not a part of. Alana John Design
was selected based on its understanding of the office premises, having designed and project managed
the original fit out six years earlier. Alana John Design was paid $67,561 (inclusive of GST) for these
services.
Loans from related parties
Mr Keith John provided a short-term unsecured loan to the Company in the amount of $400,000 on 23
February 2023. The loan was provided at 0% interest rates, and with no fees payable under any
circumstance. The loan was repaid on 19 April 2023.
The Company has calculated that the interest payable would have been $2,123 if this transaction was
on an arm’s length basis.
END OF REMUNERATION REPORT
Insurance of officers
During the year the Company paid a premium to insure its Directors and Officers.
The exposures insured include legal costs that may be incurred in defending proceedings that may be
brought against people in their capacity as officers of the Group, and any other payments arising from
liabilities incurred in connection with such proceedings. This does not include such liabilities that arise
from conduct involving a wilful breach of duty or the improper use of their position or of information
to gain advantage for themselves or someone else or to cause detriment to the Company. It is not
possible to apportion the premium between amounts relating to the insurance against legal costs and
those relating to other liabilities.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a
party, for the purpose of taking responsibility on behalf of the Company for all or part of those
proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court
under section 237 of the Corporations Act 2001.
34 | Appendix 4E and Annual Report
Non-audit services
RSM Australia Partners (‘RSM’) were appointed auditors on 2 November 2022.
The Company may decide to engage the auditor for matters additional to their statutory audit duties.
During the year ended 30 June 2023, RSM did not provide the group any non-audit services.
The Board has considered advice received from the Audit and Risk Management Committee (‘ARMC’),
and is satisfied that the provision of the non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001 because:
• All non-audit services have been reviewed by the ARMC to ensure they do not impact the
impartiality and objectivity of the auditor; and
• None of the services undermine the general principles relating to auditor independence as set out
in APES 110 Code of Ethics for Professional Accountants (including Independence Standards).
A copy of the Auditor’s Independence Declaration under section 307C of the Corporations Act 2001 is
on page 33.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations Instrument 2016/191 (Rounding in
Financial/Directors’ Reports) relating to the ‘rounding off’ of amounts in the Directors’ Report.
Amounts in the Directors’ Report have been rounded off in accordance with that instrument to the
nearest thousand dollars, or in certain cases, to the nearest dollar.
This report is made in accordance with a resolution of Directors.
Stephen Targett
Chairman
Perth
28 August 2023
35 | Appendix 4E and Annual Report
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Pioneer Credit Limited for the year ended 30 June 2023, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 28 August 2023
MATTHEW BEEVERS
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Corporate Governance Statement
The Board of Directors is committed to achieving the highest standards of corporate governance and
has reviewed its corporate governance practices against the Corporate Governance Principles and
Recommendations (4th edition) published by the ASX Corporate Governance Council.
The Corporate Governance Statement is dated 30 June 2023 and reflects the corporate governance
practices in place throughout the 2023 financial year and was approved by the Board on 28 August
2023. The Group's Corporate Governance Statement can be viewed at:
https://pioneercredit.com.au/corporate/governance
Risk Management Framework
The overall risk appetite of Pioneer is to seek and take an appropriate and balanced range of risks that
deliver Pioneer’s strategic objectives while seeking to reduce or eliminate those risks that do not
support these objectives, where it is cost effective to do so.
In managing Pioneer’s risk exposure and in promoting a consistent manner in which activities and
processes are being undertaken across the Company, the following are in place to facilitate this
alignment:
• Policies, Procedures & Guidelines
• Management Level Controls
• Controls Register
• Compliance Obligations Register
• Compliance Calendar
• Risk Monitoring
•
Internal Audit
Risk Governance Framework
Risk Appetite
Seek and take an appropiate
balanced range of risks that deliver
Pioneer's strategic objectives while
seeking to reduce or eliminate
those risks that do not support
these objectives
Risk Identification
and Assessment
Risk Management
Risk Monitoring
Risk Owner review
Executive Review
Management Level
Controls
Policies, Procedures &
Guidelines
Policies, Procedures &
Guidelines
Controls Register
Audit and Risk
Management
Committee
Operational Risk
Management
Committee
ARMC/Board review
Controls Register
Compliance Calendar
Internal Audit
Risk Matrix
Risk Management
Workshop
IT Governance
Group
Risk Matrix
Independent Controls
Assessment
37 | Appendix 4E and Annual Report
Policies, Procedures & Guidelines
In addition to those policies recommended by the ASX Corporate Governance Council Guidelines (e.g.,
Board and Committee Charters, Code of Conduct, Conflict of Interest Policy, Risk Management Policy,
and Whistleblower Policy), policies, procedures & guidelines are in place across all key processes and
business areas to facilitate the following:
• Consistency in the manner processes are undertaken and controls adopted, leading to predictable/
repeatable results;
• Continuity in the process being performed from one individual to the next, especially where
processes / controls are being performed by one or a handful of individuals (i.e. to reduce exposure
to key dependency risk); and
• Efficiency in executing a process by reducing (where possible) uncertainty and ambiguity.
Management Level Controls
As part of Pioneer’s Line of Defence (‘LOD’) model, management level controls (i.e. preventative and
detective manual / system controls) are implemented to provide internal / external stakeholders with
a level of comfort that key processes are being undertaken as intended (i.e. 1st LOD). These controls
are captured within Pioneer’s Controls Register.
Controls Register
Pioneer has a Controls Register that document existing key controls and corresponding risk /
obligations, in providing visibility on the adequacy of controls in place to mitigating existing / emerging
key risks, or in complying with applicable regulatory and contractual obligations. The Controls Register
establishes accountabilities and facilitates monitoring and reporting activities, as part of Pioneer’s risk
governance framework and LOD model.
Compliance Obligations Register
Pioneer’s Compliance Obligations Register is a tool that management and the Audit & Risk
Management Committee monitor compliance obligations throughout and ensure that these
obligations are met.
Compliance Calendar
Pioneer’s Compliance Calendar is a tool that the ARMC uses to ensure that its obligation to review and
consider Compliance related matters is maintained. The Calendar sets out the Committee’s timetable
for the coming year and allocates time to review various areas of compliance and their frequency.
38 | Appendix 4E and Annual Report
Risk Monitoring
In ensuring that Pioneer’s activities are conducted in a manner that is consistent with its risk appetite,
the following forums and monitoring initiatives have been implemented:
• Audit & Risk Management Committee
• Operational Risk Management Sub-Committee
• Executive Leadership Group
•
Information Technology Governance Group
A quarterly risk review process is undertaken with all Risk Owners to ensure the ongoing identification,
assessment and monitoring of risk.
Independent Controls Assessment
In assessing if the controls captured with the Controls Register described above continues to be
effectively designed (in mitigating key risks and complying with obligations), and effectively operated
(i.e. being conducted in the manner and frequency required), periodic control assessments are
undertaken by independent personnel (i.e. Operational Risk Management team). This forms part of
Pioneer’s LOD model (i.e. 2nd LOD).
The scope, frequency and approach of these periodic control assessments are clearly defined on the
Controls Register against each respective control.
Internal Audit
The Company has a Head of Risk and Compliance who manages the Internal Audit Program and ensures
the Company’s business processes are independently evaluated. Internal audits are co-sourced with
an external provider to obtain specialist resources where appropriate. This initiative forms part of
Pioneer’s LOD model (i.e. 3rd LOD).
39 | Appendix 4E and Annual Report
Pioneer Credit Limited ABN 44 103 003 505
Annual Report
For the year ended 30 June 2023
Financial Statements
Contents
Consolidated statement of financial position
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
41
43
44
45
46
40 | Appendix 4E and Annual Report
Consolidated statement of financial position
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Current tax asset
Purchased debt portfolio
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Right of use assets
Other non-current assets
Purchased debt portfolio
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables and liabilities
Borrowings
Provisions
Lease liabilities
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
41 | Appendix 4E and Annual Report
2023
Note
$’000
2022
$’000
13
14
18
15
16
16
17
18
15
20
19
21
17
19
17
21
8,410
1,490
693
3
23,071
6,174
979
3
106,096
96,298
116,692
126,525
681
489
7,419
3,286
804
958
8,446
3,504
198,187
199,218
210,062
212,930
326,754
339,455
6,145
11,335
2,082
1,116
28,721
20,378
1,971
961
20,678
52,031
255,119
236,283
8,153
872
9,090
971
264,144
246,344
284,822
298,375
41,932
41,080
EQUITY
Contributed equity
Reserves
Accumulated losses
Capital and reserves attributable to owners of Pioneer Credit Limited
Total equity
24
24
103,755
103,589
10,065
9,545
(71,888)
(72,054)
41,932
41,932
41,080
41,080
The consolidated statement of financial position should be read in conjunction with the accompanying notes.
42 | Appendix 4E and Annual Report
Consolidated statement of profit or loss and other comprehensive
income
Continuing operations
Interest income at amortised cost
Net impairment gain/(loss) on PDPs
Other income
Employee expenses
Finance expenses
Direct liquidation expenses
Information technology and communications
Depreciation and amortisation
Consultancy and professional fees
Other expenses
Gain on lease modification
Profit/(loss) before income tax
Income tax expense
Profit/(loss) after income tax expense for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive profit/(loss) for the year
2023
$’000
2022
$’000
Note
15
15
8
11
9
73,709
62,574
3,767
5,261
(8,913)
653
82,737
54,314
(34,365)
(33,176)
(33,839)
(39,131)
(3,572)
(2,691)
(3,456)
(3,490)
(2,229)
(2,822)
(1,741)
(2,503)
10
(3,365)
(3,549)
12
-
7
170
(33,041)
(4)
(53)
166
(33,094)
41
41
-
-
207
(33,094)
Total comprehensive income/(loss) for the year is attributable to:
Owners of Pioneer Credit Limited
207
(33,094)
Earnings/(loss) per share
Basic (cents per share)
Diluted (cents per share)
32
32
0.19
0.17
(40.48)
(40.48)
The consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
43 | Appendix 4E and Annual Report
Consolidated statement of changes in equity
Contribut
ed Equity
Share
Based
Payment
Reserve
Warrant
Reserve
Other
Reserves
Retained
Earnings
Total
Equity
Note
$’000
$’000
$’000
$’000
$’000
$’000
Balance at 1 July 2021
81,755
6,414
5,460
Total comprehensive (loss)/income
for the year
-
Transactions with owners in their
capacity as owners:
Issue of shares
Treasury share acquired
Share based payments
Issue of treasury shares to
employees
Warrants converted
Foreign currency conversion
20,908
(2,370)
-
525
2,771
-
-
-
-
1,126
(525)
-
-
-
-
-
-
-
(2,771)
-
21,834
601
(2,771)
-
-
-
-
-
-
-
(159)
(159)
(38,960)
54,669
(33,094)
(33,094)
-
-
-
-
-
-
-
20,908
(2,370)
1,126
-
-
(159)
19,505
Balance at 30 June 2022
24
103,589
7,015
2,689
(159)
(72,054)
41,080
Balance at 1 July 2022
103,589
7,015
2,689
(159)
(72,054)
41,080
Profit after income tax expense for
the year
Other comprehensive income for
the year net of tax
Total comprehensive income for
the year
Transactions with owners in their
capacity as owners:
Issue of shares
Treasury share acquired
Share based payments
Issue of treasury shares to
employees
Warrants converted
24
24
11
24
24
-
-
-
-
(84)
-
250
-
166
-
-
-
-
-
729
(250)
-
479
-
-
-
-
-
-
-
-
-
-
41
41
-
-
-
-
-
-
166
166
-
41
166
207
-
-
-
-
-
-
-
(84)
729
-
-
645
Balance at 30 June 2023
24
103,755
7,494
2,689
(118)
(71,888)
41,932
44 | Appendix 4E and Annual Report
Consolidated statement of cash flows
Cash flows from operating activities
Receipts from liquidations of PDPs and services (inclusive of goods and
services tax)
138,840
106,739
Payments to suppliers and employees (inclusive of goods and services tax)
(47,387)
(52,036)
2023
$’000
2022
$’000
Note
Interest received
Interest paid
Net income taxation (paid)
Cash flows from operating activities before changes in operating assets
Acquisitions of PDPs
Net cash outflow used in operating activities
13
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangible assets
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Payments for third party financing transaction costs
Proceeds from issue of ordinary shares net of issue costs
Lease payments
(Payments) from Treasury shares and KMP loan
Net cash flow from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
91,453
182
54,703
22
(30,047)
(25,730)
(5)
61,583
(81,546)
(19,963)
(3)
28,992
(75,750)
(46,758)
(256)
(222)
(478)
(696)
(116)
(812)
21,393
233,163
(14,003)
(174,154)
-
-
(1,610)
-
5,780
(14,661)
23,071
8,410
(6,716)
12,544
(2,199)
(2,370)
60,268
12,698
10,373
23,071
The consolidated statement of cash flows should be read in conjunction with the accompanying notes.
45 | Appendix 4E and Annual Report
Notes to the consolidated financial statements
1.
2.
Reporting entity ............................................................................................................................ 48
Basis of preparation ..................................................................................................................... 48
3. Going Concern .............................................................................................................................. 51
4.
5.
6.
7.
Significant events occurring in the current reporting period ....................................................... 52
Significant accounting policies ..................................................................................................... 52
Financial risk management........................................................................................................... 61
Segment information.................................................................................................................... 66
8. Other income ............................................................................................................................... 66
9.
Finance expenses ......................................................................................................................... 67
10. Other expenses ............................................................................................................................ 67
11. Employee expenses ...................................................................................................................... 67
12.
Income tax .................................................................................................................................... 68
13. Cash and cash equivalents ........................................................................................................... 69
14. Trade and other receivables ......................................................................................................... 71
15. Purchased debt portfolios ............................................................................................................ 71
16. Property, plant and equipment and intangible assets ................................................................. 73
17. Leases ........................................................................................................................................... 76
18. Other assets.................................................................................................................................. 77
19. Borrowings ................................................................................................................................... 78
20. Trade and other payables and liabilities ....................................................................................... 80
21. Provisions ..................................................................................................................................... 81
22. Events occurring after the reporting period ................................................................................. 81
23. Financial Instruments ................................................................................................................... 82
24. Equity ............................................................................................................................................ 83
25. Capital management .................................................................................................................... 86
26. Group structure ............................................................................................................................ 87
27. Parent entity financial information .............................................................................................. 88
28. Deed of cross guarantee ............................................................................................................... 88
29. Contingencies ............................................................................................................................... 89
30. Commitments ............................................................................................................................... 89
31. Related party transactions ........................................................................................................... 90
32. Share-based payments ................................................................................................................. 92
33. Earnings / (Loss) per share ........................................................................................................... 94
46 | Appendix 4E and Annual Report
34. Remuneration of auditors .......................................................................................................................96
47 | Appendix 4E and Annual Report
1. Reporting entity
The Consolidated Financial Statements for the financial year ended 30 June 2023 comprise Pioneer
Credit Limited (the ‘Company’), which is a “for-profit-entity” and a Company domiciled in Australia and
its subsidiaries (collectively, referred to as the ‘Group’) and the Group’s interest in associates and jointly
controlled entities. The Group’s principal activities over the financial year were acquiring and servicing
Purchased Debt Portfolio’s (‘PDP’s’). The Company’s principal place of business is Level 6, 108 St
Georges Terrace, Perth, Western Australia.
2. Basis of preparation
a) Statement of compliance
The Financial Report complies with Australian Accounting Standards and International Reporting
Standards (‘IFRS’) as issued by the International Accounting Standards Board (‘IASB’).
The Financial Report is a general-purpose financial report, for a “for-profit-entity” which has been
prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting
Standards and other pronouncements of the Australian Accounting Standards Board.
The Consolidated Financial Statements were authorised for issue by the Board of Directors on 28
August 2023.
b) Basis of measurement
The Consolidated Financial Statements have been prepared on a historical cost basis and where
applicable at fair value for certain financial assets and financial liabilities.
c) Functional and presentation currency
These Consolidated Financial Statements are presented in Australian Dollars (‘AUD’).
The Group is of a kind referred to in ASIC Corporations Instrument 2016/191 dated 31 March 2016,
and in accordance, all financial information presented in Australian dollars has been rounded to
the nearest thousand dollars ($000’s) unless otherwise stated.
d) Use of estimates and judgements
The preparation of financial statements in conformity with AASB requirements requires management
to make judgements, estimates and assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expenses. Actual results may differ from
these estimates.
48 | Appendix 4E and Annual Report
Estimates and underlying assumptions are reviewed on an ongoing basis, assume a reasonable
expectation of future events and are based on current trends and economic data obtained both
externally and within the Group. Revisions to accounting estimates are recognised in the period in
which the estimate is revised and in any future periods affected.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates have the most significant effect to the amounts recognised in the Financial Statements or
which may result in a material adjustment within the next financial year are included in the following
note:
Note 15 (p.71) - Purchased debt portfolios (‘PDP’s’)
Note 17 (p.76) – Leases
e) Taxation
Deferred income taxes arise from temporary differences between the tax bases of assets and liabilities
and their carrying amounts in the financial statements, which will result in taxable or deductible
amounts in the future. In evaluating the Company’s ability to recover deferred tax assets, management
considers all available evidence, including scheduled reversals of deferred tax liabilities, projected
future taxable income, the results of recent operations and events occurring after reporting date. The
assumptions about future taxable income, including PDP liquidations, require the use of significant
judgement and may ultimately vary from management’s best estimate.
f) Changes in accounting policies and disclosures
The accounting policies adopted are consistent with those of the previous financial year except as
follows:
49 | Appendix 4E and Annual Report
g) Adoption of new and revised Accounting Standards
New and revised Standards and amendments thereof and interpretations effective for the current year
that are relevant to the Group include:
New Standard
Overview of Changes
to Australian
AASB 2020-1 Amendments
Accounting Standards – Classifications of
Liabilities as Current or Non-Current
Amendment to IAS 12 Deferred tax related to
Assets and Liabilities arising from a Single
Transaction.
to Australian
AASB 2021-2 Amendments
Accounting Standards – Disclosure of Accounting
Policies and Definition of Accounting
Estimates.
This narrow-scope amendment to AASB 101
Presentation of Financial Statements clarifies that
liabilities are classified as either current or non-
current depending on the rights that exist at the
end of the reporting period; and also clarifies the
definition of settlement of a liability.
The IASB issued a target amendment to IAS 12
(which is the base text of AASB 112) to further
narrow down the scope of the recognition
exemption in relation to the accounting for
deferred taxes arising on transactions for which
companies recognise both an asset and liability at
the same time (for example, lease liabilities and
right-of-use assets). The amendment specifies
that companies are required to recognise deferred
tax on such transactions, and that the DTA and DTL
arising should not be offset unless the usual
conditions for offsetting are met. It is expected
that the AASB would
issue the equivalent
amendments to AASB 112.
This amending Standard impacts a number of
standards:
• AASB 7: clarifying that information about
measurement bases for financial instruments
is expected to be material to an entity’s
financial statements;
• AASB 101: requiring entities to disclose their
material accounting policy information rather
than their significant accounting policies;
• AASB 108: clarifying how entities should
distinguish changes in accounting policies and
changes in accounting estimates;
• AASB 134: identifying material accounting
policy information as a component of a
complete set of financial statements; and
• AASB Practice Statement 2, providing
guidance on how to apply the concept of
materiality to accounting policy disclosures.
50 | Appendix 4E and Annual Report
h) New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for
30 June 2023 reporting periods and have not been early adopted by the Group. These standards are
not expected to have a material impact on the entity in the current or future reporting periods and on
foreseeable future transactions.
3. Going Concern
The financial statements have been prepared on a going concern basis which assumes the realisation
of assets and the settlement of liabilities in the ordinary course of business.
At 30 June 2023, the Group generated a net profit after tax of $0.17m (30 June 2022: loss $33.1m) and
has net current assets of $96.0m (30 June 2022: $74.5m).
The Directors believe that it is appropriate to continue to adopt the going concern basis of preparation
as per the detailed cash flow forecast prepared by Management. The cash flow forecast indicates that
the Group expects to have sufficient working capital and other funds available to continue for at least
the next twelve-month period ending 31 August 2024, including satisfying financial covenants and
other compliance obligations relating to its Senior Debt Facility (‘Facility’) and Medium Term Notes
(‘MTNs’).
The key assumptions that have been used to derive the detailed cashflow forecast include:
• Ongoing PDP acquisitions funded from a combination of the senior debt facility and free cash;
• Continued PDP cash collections;
• Portfolio sales, in line with the Company’s capital management strategy;
• Remediation programs from various partner vendors;
• Operational FTE recruitment; and,
• Expense management
The Facility and MTNs contain covenants which are closely linked to the carrying value of the PDPs and
are highly sensitive to the level and timing of PDP acquisitions, cash collections, and sales. Should a
breach of a finance covenant or undertaking appear likely to occur, the Group has options available to
ensure compliance, beyond increasing cash collections of PDPs. These include, but are not limited to;
seeking a waiver of any likely breach from the financiers; raising funds through an equity issue; and
sales of non-core assets or part of its PDP portfolio.
Our going concern forecast model includes assumptions relating to recoverability of ongoing
remediation programs from various vendor partners. In the event these do not eventuate to the extent
51 | Appendix 4E and Annual Report
forecasted, the group anticipates these would not have an adverse impact on the going concern
assumptions. In the event this does, the group has the levers available as mentioned above.
In the event that a breach of a covenant is not waived by the financiers or prevented through one or a
combination of the above options, an event of default would occur, and the financiers could declare
all or part of the Group’s facilities to be due and payable on demand.
Whilst Directors recognise that the key assumptions underpinning the cash flow forecast are subject
to future events, some of which are beyond the direct control of the Group, Directors have assessed
the cash flow forecast and believe that it is appropriate that the Group continues to prepare its financial
report on the going concern basis.
4. Significant events occurring in the current reporting period
There were no significant events that occurred during the current reporting period.
5. Significant accounting policies
a) Basis of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Pioneer
Credit Limited as at 30 June 2023. Pioneer Credit Limited and its subsidiaries together are referred to
in this financial report as the (‘Group’) or the (‘Company’).
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power to direct the activities of
the entity.
The acquisition method of accounting is used to account for business combinations undertaken by the
Group. Inter transactions, balances, and unrealised gains on transactions between Group companies
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
de-consolidated from the date that control ceases.
52 | Appendix 4E and Annual Report
b) Income tax
The income tax expense for the period is the tax payable on the current period's income based on the
applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated based on the tax laws enacted or substantively enacted at
the end of the reporting period. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate based on amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition
of goodwill. Deferred income tax is also not accounted for if it arises from the initial recognition of an
asset or liability in a transaction other than a business combination, that at the time of the transaction,
affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantially enacted by the end of the reporting period and are
expected to apply when the related deferred income tax asset is realised, or the deferred income tax
liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if
it is probable that future taxable amounts will be available to utilise those temporary differences and
losses.
The Group has implemented the tax consolidation legislation and its entities are taxed as a single entity
and the deferred tax assets and liabilities of these entities are offset in the consolidated financial
statements.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
c) Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes
cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.
Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
53 | Appendix 4E and Annual Report
d) Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest rate method, less loss allowance. Trade receivables are generally due for
settlement within 30 days. Trade and other receivables are presented as current assets unless
collection is not expected for more than 12 months after the reporting date.
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a
lifetime expected loss allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been grouped based on shared credit
risk characteristics and the days past due.
The expected loss rates are based on the payment profiles over a 12-month period before 30 June 2023
and the corresponding credit losses experienced within this period. The historical loss rates are
adjusted to reflect the current and forward-looking information on macroeconomic factors affecting
the ability of the customers to settle the receivables.
Trade receivables are written off when there is no reasonable expectation of recovery. Impairment
losses are presented as net impairment losses within operating profit. Subsequent recoveries of
amounts previously written off are credited against the same line item.
Refer to note 6 for detailed Impairment methodology for trade receivables.
e) Purchased Debt Portfolios
Classifying PDPs at amortised cost and the use of the effective interest rate (‘EIR’) method requires the
Group to estimate future cash flows from PDPs at purchase date and at each balance sheet date.
Cash flow projections are made at the tranche level because these are substantially homogeneous.
Cash flow forecasts are generated using statistical cash flow projection models incorporating many
factors which are formed by customer and account level data, payment arrangement data and the
Group’s historical experience with accounts which have similar key attributes. Tranches are assumed
to have a maximum life of up to 15 years depending on the characteristics of the tranche.
Management reviews the models on a total portfolio basis to consider factors which have impacted
historical or will impact future performance and where necessary cash flows are calibrated to consider
these factors.
If total forecast cash flow projections utilised in determining the value of the portfolio were to change
by ±5%, the carrying value of PDPs at 30 June 2023 of $304.3m would change by $13.1m in a downside
scenario and $12.9m in an upside scenario. An increase or decrease in the carrying value of PDPs, is
recognised in the statement of profit or loss at that point in time as an impairment gain or loss.
54 | Appendix 4E and Annual Report
f) Property, plant, and equipment
All property, plant and equipment acquired are stated at historical cost less depreciation. Historical
cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably. The carrying amount of any component
accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance
are charged to profit or loss during the reporting period in which they are incurred.
The assets' residual values and useful lives are reviewed and adjusted if appropriate, at the end of each
reporting period and an asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in profit or loss. When revalued assets are sold, it is Group policy to transfer any amounts
included in other reserves in respect of those assets to retained earnings.
Depreciation methods and useful lives
Depreciation of property, plant and equipment is calculated using the diminishing balance method to
allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives.
Certain leasehold improvements and leased plant and equipment are depreciated on a straight line
basis over the term of the lease.
Plant and equipment
15% - 68%
Furniture, fittings, and equipment
15% - 50%
Leasehold improvements
20% - 50%
g) Intangible assets
Software
Costs associated with maintaining software programmes are recognised as an expense as incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique
software products controlled by the Group are recognised as intangible assets where the following
criteria are met:
It is technically feasible to complete the software so that it will be available for use
•
• Management intends to complete the software and use it
• There is an ability to use the software
55 | Appendix 4E and Annual Report
•
It can be demonstrated how the software will generate probable future economic benefits,
adequate technical, financial, and other resources to complete the development and to use the
software are available, and
• The expenditure attributable to the software during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software include employee costs.
Capitalised development costs are recorded as intangible assets and amortised from the point at which
the asset is ready for use.
h) Leases
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses and adjusted for any re-measurement of lease liabilities. The cost
of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred,
and lease payments made at or before the commencement date less any lease incentives received.
The recognised right-of-use assets are depreciated on a straight-line basis over the lease term.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments
less any lease incentive receivable and variable lease payments that depend on an index or a rate. The
lease payments also include the exercise price of a purchase option reasonably certain to be exercised
by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group
exercising the option to terminate. The variable lease payments that do not depend on an index or a
rate are recognised as expense in the period in which the event or condition that triggers the payment
occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at
the lease commencement date as the interest implicit in the lease is not readily determinable. After
the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest
and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is
remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed
lease payments or a change in the assessment to purchase the underlying asset. In calculating the
quantum of a substantial modification, the incremental borrowing rate is reset at the date of
modification of the lease.
Short-term leases and leases of low-value assets
The Group applies the low-value assets recognition exemption to leases that are considered of low
value. Lease payments on short-term leases (less than 12 months) and leases of low-value assets are
recognised as expenses on a straight-line basis over the lease term.
56 | Appendix 4E and Annual Report
i) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of
financial year which are unpaid and are unsecured and are usually paid within 30 days of recognition.
Trade and other payables are presented as current liabilities unless payment is not due within 12
months from the reporting date.
j) Borrowings
All borrowings are initially recognised at fair value which is usually their principal amount, net of
directly attributable transaction costs incurred. After initial recognition, borrowings and interest are
measured at amortised cost using the effective interest rate method. Where the Group’s borrowings
include floating rate instruments, the Group recognises borrowings initially at the principal amount
owing net of directly attributable transaction costs incurred. Where the simplified approach is taken
for floating rate instruments, the directly attributable transaction costs are amortised on a straight-line
basis over the term of the facility.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is
deferred until the draw down occurs. To the extent there is no evidence that it is probable that some
or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and
amortised over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is
discharged, cancelled, or expired. Borrowings are classified as current liabilities unless the Group has
an unconditional right to defer settlement of the liability for at least 12 months after the reporting
period.
k) Derivative liabilities
Derivative liabilities are accounted for at fair value through profit or loss. They are presented as current
to the extent they are expected to be settled within 12 months after the end of the reporting period.
An embedded derivative is a component of a hybrid contract that also includes a non-derivative host
where some of the cash flows of the combined instrument vary in a way similar to a standalone
derivative, causing some or all of the cash flows under the contract to be modified according to a
specific financial variable i.e. share price movement. A derivative that is attached to a financial
instrument but is contractually transferable independently of that instrument, or has a different
counterparty, is not an embedded derivative, but a separate financial instrument.
l) Provisions
Provisions for legal claims and make good obligations are recognised when the Group has a present
legal or constructive obligation as a result of past events, it is probable that an outflow of resources
57 | Appendix 4E and Annual Report
will be required to settle the obligation and the amount has been reliably estimated. Provisions are not
recognised for future operating losses.
Provisions are measured at the present value of management's best estimate of the expenditure
required to settle the present obligation at the end of the reporting period. The discount rate used to
determine the present value is a pre-tax rate that reflects current market assessments of the time value
of money and the risks specific to the liability. The increase in the provision due to the passage of time
is recognised as an interest expense.
m) Employee benefits
Short term obligations
Liabilities for wages and salaries, including non-monetary benefits such as annual leave expected to be
settled within 12 months after the end of the period in which the employees render the related service
are recognised in respect of employees’ services up to the end of the reporting period and are
measured at the amounts expected to be paid when the liabilities are settled. The liability for annual
leave is recognised in the provision for employee benefits. All other short-term employee benefit
obligations are presented as payables.
Long service leave
Liabilities for long service leave are not generally expected to be settled wholly within 12 months after
the end of the period in which the employees render the related service. They are recognised in the
provision for employee benefits and measured as the present value of expected future payments to
be made up to the end of the reporting period using the projected unit credit method. Consideration
is given to expected future wage and salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using rates published in the ‘Group of 100 Discount
Rate Report and Discount Curve’. Re-measurement as a result of experience, adjustments and changes
in actuarial assumptions are recognised in profit or loss. The obligations are presented as current
liabilities in the consolidated balance sheet if the entity does not have an unconditional right to defer
settlement for at least 12 months after the reporting date, regardless of when the actual settlement is
expected to occur.
Share-based payments
The grant date fair value of equity-settled share-based payment awards granted to employees is
generally recognised as an expense, with a corresponding increase in equity, over the vesting period
of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for
which the related service conditions are expected to be met, such that the amount ultimately
recognised is based on the number of awards that meet the related service conditions at the vesting
date.
58 | Appendix 4E and Annual Report
n) Contributed equity
Ordinary shares issued are classified as equity
Where Pioneer Credit purchases the Company’s equity instruments as a result of a share-based
payment plan, the consideration paid, including any directly attributable incremental costs (net of
income taxes) is deducted from equity attributable to the owners of Pioneer Credit as treasury shares.
Shares held in Pioneer Credit Limited Equity Incentive Plan Trust are disclosed as treasury shares and
deducted from contributed equity.
o) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing:
a) the profit attributable to owners of the Company, excluding any costs of servicing equity other than
Ordinary shares; by
b) the weighted average number of Ordinary shares outstanding during the financial year, adjusted
for bonus elements in Ordinary shares issued during the year and excluding treasury shares.
Diluted earnings per share
If basic earnings per share is a loss per share, then diluted earnings per share will reflect the same loss
per share as basic earnings per share, regardless of all dilutive potential Ordinary shares.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
consider:
•
•
the after income tax effect of interest and other financing costs associated with dilutive potential
Ordinary shares; and
the weighted average number of additional Ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential Ordinary shares.
p) Goods and Services Tax (GST)
Revenues, expenses, and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority in which case it is recognised as part of the cost
of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the taxation authority is included with other
receivables or payables in the consolidated balance sheet.
Cash flows are presented on a gross basis.
59 | Appendix 4E and Annual Report
q) Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and
are tested annually for impairment or more frequently if events or changes in circumstances indicate
that they might be impaired. Other assets are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognised
the
its recoverable amount.
by which
carrying
amount
amount
asset’s
the
for
exceeds
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows which are largely independent of the cash inflows from other assets
or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
r) Government grants
Grants that compensate the Group for expenses incurred are recognised through profit or loss on a
systematic basis in the periods in which the expenses are recognised.
To the extent that any of the Group entities are eligible to participate in the Government stimulus
packages in the wake of COVID, receipts have been accounted for as government grants and are
presented as a reduction of the related employee costs and not revenue.
s) Foreign Currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (‘the functional currency’).
The consolidated financial statements are presented in Australian dollars, which is the Group’s
functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation of monetary assets and liabilities denominated in foreign
currencies at year end exchange rates are generally recognised in profit or loss. They are deferred in
equity if they relate to qualifying cash flow hedges and qualifying net investment hedges or are
attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit
or loss, within finance costs. All other foreign exchange gains and losses are presented in the statement
of profit or loss on a net basis within other income or other expenses.
60 | Appendix 4E and Annual Report
Non-monetary items that are measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined. Translation differences on assets and
liabilities carried at fair value are reported as part of the fair value gain or loss.
Group companies
The results and financial position of foreign operations (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency
are translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date
•
of that balance sheet;
income and expenses for each statement of profit or loss and statement of comprehensive income
are translated at average exchange rates (unless this is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case income and
expenses are translated at the dates of the transactions); and
• all significant resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign
entities and of borrowings and other financial instruments designated as hedges of such investments
are recognised in other comprehensive income.
6. Financial risk management
The Group's activities expose it to a variety of risks. Consequently, its overall risk management
programme focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the Group.
Risk management is the responsibility of Key Management Personnel. Policies approved by the Board
ensure that total risk exposure is consistent with the Group strategy, is in line with covenants and is
within internal risk tolerance guidelines.
The Group uses different methods to measure the different types of risk to which it is exposed which
include sensitivity analysis of interest rates, preparation, and review of ageing analysis for credit risk
and projected cash flow analysis across the portfolio to manage the risk associated with financial assets
and liabilities.
The main risks the Group is exposed to through its financial instruments are market risk, liquidity risk
and credit risk.
The Group periodically considers the need to make use of derivative financial instruments and hedging
arrangements to manage interest rate risk. There are currently no such arrangements in place.
61 | Appendix 4E and Annual Report
The following table lists financial assets and liabilities, interest rate type and carrying value.
Interest rate
2023
$’000
2022
$’000
Variable
Fixed
Variable
Variable
Fixed
8,410
23,071
304,283
295,516
208,893
199,573
53,345
53,394
352
502
Financial assets
Cash and cash equivalents
Purchased Debt Portfolios
Financial liabilities
Borrowings – before transaction costs:
Senior financier
Medium term notes
Other loans
Market risk management
Interest Rate Risk
Risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rates.
The Group’s main interest rate risk arises from long term loans and borrowings issued at both fixed and
variable interest rates. The Group’s fixed rate PDP’s and receivables are carried at amortised cost and
not subject to interest rate risk.
The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated
taking into consideration refinancing, renewal of existing positions and alternative financing. In
undertaking this analysis, the group considers a wide range of economic papers on projected interest
rate movements to inform risk management processes. Based on these scenarios, the Group calculates
the impact on profit or loss of a defined interest rate shift and cashflow requirements under existing
financing arrangements The scenarios are run only for liabilities that represent the major interest-
bearing positions. The simulation is done on a monthly basis to verify that the maximum loss potential
is within the limit given by management.
To manage interest rate and credit risk arising from the investment in PDPs, the Group undertakes
pricing analysis prior to committing to any investment. This analysis includes consideration of
information supplied under due diligence, as well as macro and micro economic elements to which
senior executives’ experience and judgement is applied. In many instances there is knowledge of the
expected performance of portfolios with similar characteristics, however ultimately cash flows may
differ to these expected.
62 | Appendix 4E and Annual Report
Currency Risk
The risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates.
New Zealand operations expose the Group to foreign exchange risk. This may result in the fair value of
financial assets and liabilities fluctuating due to movements in exchange rates. Fluctuations in the New
Zealand dollar relative to the Australian dollar may impact the Group’s financial results, though the
impact of reasonably foreseeable exchange rate movements are unlikely to be material.
Liquidity risk management
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated
with financial liabilities that are settled by delivering cash or another financial asset, including the risk
of compliance with covenants. A breach in covenant could potentially result in financiers calling the
debt, if not remedied within the agreed timeframe. The Group has several options available to improve
the liquidity position, such as ceasing to buy PDPs, raising funds through an equity raise, and selling
non-core assets or part of its PDP portfolio.
PDP risk is the risk that the Group will be impacted by its ability to acquire new PDPs at sustainable
pricing, potentially impacting the future cash flow projections of the Group.
Prudent liquidity risk management requires maintaining sufficient cash reserves and debt funding to
meet obligations when due and through maintaining a reputable credit profile.
Management monitors forecasts of the Group’s liquidity reserve based on expected cash flow. Cash
flow is forecast on a day-to-day basis to ensure that sufficient funds are available to meet requirements.
63 | Appendix 4E and Annual Report
Maturities of financial liabilities
The following table reflects an undiscounted contractual maturity analysis for financial liabilities. The
timing of cash flows represented in the table to settle financial liabilities reflects the earliest contractual
settlement dates.
Within 1 year Between 1
and 2 years
Between 2
and 5 years
Carrying
amount
$’000
$’000
$’000
$’000
6,145
11,335
17,480
28,721
20,378
49,099
-
9,051
9,051
-
11,821
11,821
-
6,145
246,068
266,454
246,068
272,599
-
28,721
224,462
256,661
224,462
285,382
At 30 June 2023
Trade and other payables
Borrowings
At 30 June 2022
Trade and other payables
Borrowings
Credit risk management
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other
party by failing to discharge an obligation.
Credit risk arises from cash and cash equivalents, credit exposure to customers, including outstanding
receivables and committed transactions. Credit risk is managed on a Group basis. For corporate
customers, management assesses the credit quality of the customer. Individual risk limits are set by
the Board.
Purchased or originated credit-impaired financial assets (‘POCI’) are financial assets classified at
amortised cost that are purchased or originated at a deep discount that reflects incurred credit losses.
At initial recognition, POCI assets do not carry a separate impairment allowance; instead, lifetime
expected credit losses are incorporated into the calculation of the effective interest rate.
There are no significant concentrations of credit risk, whether through exposure to individual
customers, specific industry sectors and / or regions.
At 30 June 2023 there were no material trade receivables that were past due and there are no trade
receivables that are in default. The Group’s trade receivables and consumer loans are subject to AASB
9’s expected credit loss (‘ECL’) model for recognising and measuring impairment of financial assets.
Given the nature of credit-impaired financial assets, the ultimate cash received may differ to the
amount recorded.
64 | Appendix 4E and Annual Report
Impairment of trade and other receivables
The loss allowances for financial assets are based on assumptions about risk of default and expected
loss rates. The estimation of credit exposure for risk management purposes is complex and requires
the use of models, as the exposure varies with changes in market conditions, expected cash flows and
the passage of time. The assessment of credit risk of a portfolio of assets entails further estimations as
to the likelihood of defaults occurring, of the associated loss ratio. As a result, the ultimate cash
received may differ to the amount recorded.
Judgement has been applied on a forward-looking basis to assess the expected credit losses associated
with its financial assets carried at amortised cost.
The following table details the loss allowance balance and movement.
Trade and other receivables
Opening loss allowance as at 1 July
Increase / (Decrease) in provision for loss allowance
Amounts written-off during the period
Loss allowance at 30 June
2023
2022
$’000
$’000
98
(67)
(0)
31
68
38
(8)
98
The Group recognises a lifetime expected credit loss for trade receivables. The expected credit loss on
these financial assets are estimated using a provision matrix based on the Group’s historical credit loss
experience, adjusted for factors that are specific to the debtors, general economic conditions, and an
assessment of both the current as well as the forecast direction of conditions at the reporting date,
including the time value of money where appropriate.
To measure the expected credit losses, trade receivables have been grouped based on shared credit
risk characteristics and days past due. Grid 1 contains those receivables that have a positive repayment
history, made up of government funded agencies, listed financial institutions and other listed public
entities. Grid 2 contains all other receivables made up of SME businesses, individuals, and other
unlisted financial service providers.
65 | Appendix 4E and Annual Report
Days past due
0-30
31-60
61-90
91-120
121-150 Over
150
Total
Expected Credit Loss Rates
Grid 1
Grid 2
5.24%
9.93%
8.91%
12.04%
19.40%
13.65%
30.24%
33.25%
36.79%
20.61%
22.68%
26.10%
Gross Carrying Amounts
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Grid 1
Grid 2
Lifetime
expected loss
224
175
29
-
4
0
-
2
0
-
0
0
11
0
(9)
-
226
181
4
(3)
30
7. Segment information
For management purposes, the Company is organised into one main business segment, which is the
provisions of financial services specialising in acquiring and servicing PDP’s. All significant operating
decisions are based upon analysis of the Company as one segment which is reviewed weekly by the
KMP (Managing Director, Company Secretary, Chief Operating Officer, Chief Financial Officer, and Chief
Information Officer) who is the Chief Operating Decision Maker. The financial results from this segment
are equivalent to the financial statements of the Company as a whole.
8. Other income
Fees for services
Interest Income
Other1
2023
2022
$’000
$’000
215
186
4,860
5,261
577
22
54
653
1 Other income is predominantly remediation payments made by Pioneers vendors across multiple products,
tranches and vintages (year of PDP investment).
66 | Appendix 4E and Annual Report
9. Finance expenses
Bank fees and borrowing expenses
Gain on modification of MTN1
Loss on derecognition of SFA1
Break fees
Commitment fees
2023
2022
$’000
$’000
577
-
-
-
-
2,837
(122)
1,332
6,300
166
Interest and finance charges paid/payable for financial liabilities not at fair value
32,593
28,072
Lease liability
1Refer to Note 19 – Borrowings for further information.
10. Other expenses
Occupancy costs
Administration expenses
Other
Impairment of tangible and intangible assets
11. Employee expenses
Wages and salaries
Superannuation
Change in liabilities for employee benefits
Share-based payment transactions
Other associated personnel expenses
67 | Appendix 4E and Annual Report
669
546
33,839
39,131
2023
2022
$’000
$’000
970
2,012
449
(66)
1,054
2,018
448
29
3,365
3,549
2023
2022
$’000
$’000
28,676
27,216
2,532
2,330
60
729
2,368
92
1,126
2,412
34,365
33,176
12. Income tax
Income tax recognised in profit or loss
Current tax on profits for the year
Adjustments for current tax and deferred tax of prior periods
Deferred tax (benefit) expense
Income tax expense (benefit) expense
Deferred income tax expense / (income) included in income tax
expense comprises:
(Decrease)/increase direct to equity
Decrease/(increase) in deferred tax assets of prior years
Decrease/(increase) in deferred tax assets
-
-
-
-
2023
$’000
2022
$’000
-
50
3
53
4
-
-
4
-
-
-
-
Numerical reconciliation of income tax expense to prima facie tax payable
2023
$’000
2022
$’000
Profit/(loss) from operations before income tax expense
170
(33,041)
Tax at the Australian tax rate of 30.0% (FY22: 30.0%)
Non-deductible entertainment costs
Non-deductible share based payments
Under / (over) provision for prior year current and deferred taxation
Employee share scheme
Other non-deductible expenses and assessable income
Tax losses not recognised as a deferred tax asset
Income tax (benefit) / expense
51
68
219
-
-
(18)
(316)
4
(9,912)
58
338
50
(711)
8
10,222
53
68 | Appendix 4E and Annual Report
2023
2022
$’000
$’000
428
-
428
421
28
449
112
159
22,828
1,674
(17)
1,099
-
555
(19)
2,229
-
505
(25,005)
(4,548)
-
-
-
-
2023
2022
$’000
$’000
8,410
23,071
8,410
23,071
Deferred tax assets and liabilities
The balance comprises temporary differences attributable to:
Employee benefits (annual leave)
Retirement benefit obligations (superannuation payable)
Other accrued expenses (audit, accounting, payroll tax)
Other temporary differences (formation costs, legal and other professional
costs, fixed and intangible timings)
Prepayments
Provision for impairment (PDPs) through profit or loss
Provision for impairment (PDPs) through equity
Provision for leases
Deferred tax assets not recognised
Net deferred tax assets
13. Cash and cash equivalents
a) Cash and cash equivalents
Cash at bank
69 | Appendix 4E and Annual Report
b) Reconciliation of profit after income tax to net cash inflow from operating
activities
(Loss)/Profit for the period
Non-cash items in profit or loss:
Foreign currency translation
Other non-cash expenses
Lease Liability Interest accrual
Impairment of tangible and intangible assets
Non-cash employee benefits expense
Other non-cash items
Income tax expense
Depreciation and amortisation
Interest and transaction costs
(Increase)/decrease in assets:
Trade and other receivables
PDPs
Deferred tax assets
Other assets
Increase/(decrease) in liabilities:
Trade and other payables and liabilities
Interest payable
Income tax payable
Provisions
Net cash flow inflow used in operating activities before changes in
operating assets
c) Non-cash investing and financing activities
MTN to equity swap
Refinancing transaction fees equity swap
Other – KMP Loans
70 | Appendix 4E and Annual Report
2023
$’000
2022
$’000
166
(33,094)
41
(134)
669
(66)
842
4
2,229
2,546
4
566
356
29
1,268
-
2,822
1,596
4,750
(5,319)
(8,767)
(44,153)
-
-
502
(161)
(22,397)
23,251
(336)
-
(12)
6,355
(50)
(228)
(19,963)
(46,758)
2023
$’000
2022
$’000
-
-
-
4,500
1,940
2,050
14. Trade and other receivables
Trade receivables
Other receivables
15. Purchased debt portfolios
Current
Non-current
2023
$’000
2022
$’000
468
1,022
1,490
547
5,627
6,174
2023
$’000
106,096
198,187
304,283
2022
$’000
96,298
199,218
295,516
PDPs are recognised at fair value at the date of purchase and are subsequently measured at amortised
cost applying the EIR with the lifetime expected credit losses incorporated into the calculation of the
EIR at inception. This EIR is the rate that exactly discounts the estimated future cash receipts of the
purchased portfolio asset to the fair value at initial recognition (i.e., the price paid to acquire the
portfolio). All changes in lifetime expected credit losses after the assets’ initial recognition are
recognised as an impairment change (gain or loss).
Interest on PDPs tranches is accrued using the EIR on each portfolio and recognised as interest income
at amortised cost on the consolidated statement of profit or loss and other comprehensive income.
Movement on purchased debt portfolios at amortised cost is as follows:
2023
$’000
2022
$’000
295,516
249,094
59,249
99,493
(127,958)
(106,732)
73,709
3,767
62,574
(8,913)
304,283
295,516
At beginning of period
Debt portfolios acquired
Cash collections of PDPs
Interest income accrued
Net impairment (loss)/gain
71 | Appendix 4E and Annual Report
A detailed analysis of the critical accounting estimates and judgements in Note 4 outlines the elements
considered in the application of judgement to estimate future cash flows at the time the EIR is
determined and at each subsequent reporting date, including the key underlying variables that are
analysed.
Overlays for macroeconomic, modelling and operational risks
The uncertain macroeconomic environment and its potential impact on the operational performance
of the Company has the potential to affect forecast future cash flows and thereby impairment of the
carrying value of the PDP portfolio.
In determining suitable timeframes for modelling these potential impacts, forward-looking economic
assumptions were considered. These include forecasts of unemployment rates, CPI, annual wage
growth and the RBA cash rate.
Economic forecasts in general currently expect a short-term inflationary period for Australia before a
period of stability leading to a gradual recovery of the economy in the medium term. The Company
modelled three scenarios to consider varying periods of dampened short-term performance followed
by partial or full recovery of the variances, with no outperformance considered over the longer term.
A probability-weighted average of these three scenarios was applied to the future cash flows to
recognise macroeconomic risk.
Modelling risks arise where key judgements may impact on the appropriateness of model outputs.
Commensurate with the complexity, materiality and business use of the model, the Group mitigates
modelling risk through:
• Effective challenge and critical analysis involving objective, qualified and experienced parties
in the line of business in which the model is used;
• Output verification to ensure that the model performed as expected in line with design
objectives and business use; and
• Back testing, model stability analysis and sensitivity analysis.
Given the inherent limitations of historic information predicting future cash collections, additional
modelling risk mitigation is considered through calibration of the expected future cash flows.
Operational risk overlays are considered to recognise current or expected operational issues, strategies
or challenges that are not otherwise considered in the modelling process and are expected to affect
future cash flows.
During the period, Pioneer was required to pause communications with a portion of customers as part
of a vendor-driven remediation programme. This impacted the pattern of historical collections
performance of the affected tranches of PDPs, flowing through to permanently reduce ERC for those
tranches below a reasonable level in the underlying PDP model. Operational overlays have been used
this period to ensure that the ERC impact of the remediation programme reflects the temporary nature
of the process, rather than a permanent impact to Pioneer’s ability to collect from these customers.
The overlay also considers expected reassignment of a small cohort of customers where they meet
certain criteria of the vendor’s remediation programme.
72 | Appendix 4E and Annual Report
16. Property, plant and equipment and intangible assets
a) Property, plant, and equipment
Plant and
equipment
Furniture, fittings,
and equipment
Leasehold
improvements
Total
$’000
$’000
$’000
$’000
2022
At 1 July 2021
Cost
Accumulated depreciation
Net book amount
At 30 June 2022
Opening net book amount
Additions
Transfers
Depreciation charge
Closing net book amount
At 30 June 20221
Cost
Accumulated depreciation
Net book amount
2023
At 1 July 2022
Opening net book amount
Additions
Depreciation charge
Closing net book amount
At 30 June 2023
Cost
Accumulated depreciation
Net book amount
2,965
(2,906)
59
59
591
57
(103)
604
1,911
(1,307)
604
604
164
(254)
514
2,075
(1,561)
514
708
(611)
97
97
12
(39)
(27)
43
641
(598)
43
43
-
(11)
32
641
(609)
32
3,485
7,158
(3,290)
(6,807)
195
351
195
93
(5)
(126)
157
351
696
13
(256)
804
2,111
4,663
(1,954)
(3,859)
157
804
157
85
(107)
135
804
249
(372)
681
2,196
4,912
(2,061)
(4,231)
135
681
1 For the year ending 30 June 2022, there were assets which had been disposed of but not included in the financial statements.
The net book value of these disposals was zero and had no effect on the comparative information, other than the closing
balances for cost and accumulated depreciation.
73 | Appendix 4E and Annual Report
b) Intangible assets
2022
At 1 July 2021
Cost
Accumulated amortisation
Net book amount
Opening net book amount
Additions
Disposals
Transfers
Amortisation
Closing net book amount
At 30 June 2022
Cost
Accumulated amortisation and impairment
Net book amount
2023
At 1 July 2022
Opening net book amount
Additions
Amortisation
Closing net book amount
At 30 June 2023
Cost
Accumulated amortisation and impairment
Net book amount
74 | Appendix 4E and Annual Report
Software and
licenses
$’000
6,375
(4,817)
1,558
1,558
116
(4)
(14)
(698)
958
6,491
(5,533)
958
958
180
(649)
489
3,076
(2,587)
489
Amortisation methods and useful lives
In line with AASB138(118) (a),(b), the Group amortises intangible assets with a limited useful life using
the straight-line method over the following periods:
• Patents, trademarks, and licences 3-5 years
•
3-5 years
IT development and software
The capitalised salaries were recognised as part of the IT development and software intangible assets.
They are recognised at their fair value at the date of acquisition and are subsequently amortised on a
straight-line basis.
Impairment of Assets
The recoverable amount of the consolidated entity’s assets (including intangible assets) has been
determined by a value-in-use calculation using a discounted cashflow model, based on an annual
projection period approved by management and extrapolated for a further 4 years using a steady rate,
together with a terminal value.
The following key assumptions were used in the discounted cash flow model for the group:
• 10.14% post tax discount rate, this was calculated using a weighted average cost of capital
(‘WACC’);
• 5% per annum project growth rate;
• 5% per annum increase in operating costs and overheads;
• 2.5% growth in terminal value; and
• PDP purchases sufficient to sustain the current level of PDP investment.
The discount rate of 10.14% post-tax reflects managements estimate of the time value of money and
the consolidated entity’s WACC. Management believes the projected 5% growth rate is prudent and
justified, based on the future growth aspirations and current year performance. In addition to this, the
5% increase in operating costs and overheads is reflective of the current market conditions and
increase in inflation.
The above testing did not give rise to any impairment.
Sensitivity
Management have made judgements and estimates in respect of impairment testing. Should these
judgements and estimates not occur the carrying value of the assets may decrease. The sensitivities
are as follows:
• Growth rate would need to decrease by greater than 2.8%, before assets would need to be
impaired, with all other assumptions remaining constant, or
• The discount rate would need to increase by 5.2% before assets would need to be impaired, with
all other assumptions remaining constant.
75 | Appendix 4E and Annual Report
17. Leases
a) Right of use assets
The consolidated entity leases level 5 – level 8 of 108 St Georges Terrace, Perth, Western Australia.
The purpose of this lease is to run the operations of the consolidated group and the lease is due to
expire on 30 June 2029.
$’000
4,930
5,383
(1,867)
8,446
8,446
179
(1,206)
7,419
2023
2022
$’000
$’000
1,116
961
8,153
9,090
9,269 10,051
Balance at 1 July 2021
Revaluation of lease asset on modification
Depreciation
Balance at 30 June 2022
Balance at 1 July 2022
Revaluation of lease asset on modification
Depreciation
Balance at 30 June 2023
b) Lease liabilities
Current lease liability
Non-current lease liability
76 | Appendix 4E and Annual Report
c) Maturity analysis – undiscounted
Lease commitments (principal and interest) at 30 June 2023
Within one year
Later than one year but no later than five years
Later than 5 years
$’000
1,116
6,133
2,020
9,269
The Group determines the lease term as the non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it is reasonably certain to exercise, or any periods
covered by an option to terminate the lease, if it is reasonably certain not to be exercised.
The Group has the option to lease the assets for additional terms. The Group applies judgement in
evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers all
relevant factors that create an economic incentive for it to exercise the renewal. After the
commencement date, the Group reassesses the lease term if there is a significant event or change in
circumstances that is within its control and affects its ability to exercise (or not exercise) the option to
renew.
2023
2022
$’000
$’000
693
693
979
979
1,386
1,900
3,286
1,454
2,050
3,504
18. Other assets
Current
Prepayments
Non-current
Cash backed rental guarantee
Loans to management1
1Refer to Note 31 – Related party transactions for further details on loans to management.
77 | Appendix 4E and Annual Report
19. Borrowings
Secured
Senior debt facilities
Medium term notes
Interest payable
Other loans
2023
Current
Non-
current
2022
Total
Current
Non-
current
Total
$’000
$’000
$’000
$’000
$’000
$’000
9,051
200,950
210,001
18,280
182,114
200,394
-
54,169
54,169
-
54,169
54,169
1,932
352
-
-
1,932
352
1,596
502
-
-
1,596
502
11,335
255,119
266,454
20,378
236,283 256,661
All borrowings are initially recognised at fair value which is usually their principal amount, net of
directly attributable transaction costs incurred, and subsequently measured under amortised cost.
Given the Facility has a variable interest rate, it is classified as a floating instrument and the transactions
costs are expensed under the simplified approach on a straight-line basis. The MTN’s are measured
using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all the Facility will be drawn down. In this case, the fee is deferred
until the draw down occurs. To the extent there is no evidence that it is probable that some or all the
facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised
over the period of the Facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is
discharged, cancelled, or expired. Borrowings are classified as current liabilities unless the Group has
an unconditional right to defer settlement of the liability for at least 12 months after the reporting
period.
Secured liabilities and assets pledged as security
Security has been pledged over all the assets and undertakings of each of Pioneer Credit Limited,
Pioneer Credit Solutions Pty Limited, Sphere Legal Pty Limited, Pioneer Credit (Philippines) Pty Limited,
Pioneer Credit Connect Pty Ltd, Pioneer Credit Broking Services Pty Ltd, Credit Place Pty Ltd, Pioneer
Credit Connect (Personal Loans) Pty Ltd and Switchmyloan Pty Ltd and unlimited cross guarantees and
indemnities from each of these entities.
All property of the Group comprises the Groups total assets of $326,754,000 at 30 June 2023 (30 June
2022: $339,455,000).
78 | Appendix 4E and Annual Report
Financing arrangements
Senior Facility
The Group has access to a Senior Facility of $215.2 at 30 June 2023 (30 June 2022: $234.1m) comprised
of a $125.0 term facility, $69.8m as a revolving facility and a $20.5m delayed draw term loan facility.
The undrawn limit of the Senior Facility is $5.3m at 30 June 2023 (30 June 2022: $26.3m). The Senior
Facility maturity date is 5 November 2025.
The Senior Facility contains the following embedded derivatives:
• Make whole payment relates to the 24 month period after financial close on tranche 1 of the Senior
Facility. This early redemption option has been assessed and considered not closely related and it
has therefore been separated and measured at fair value through profit and loss. Management has
concluded that early redemption will not occur within the 24 month period and the separate
derivative has been valued at zero.
• Call Option related to the early redemption of tranche 1 of the Senior Facility. The call option relates
to the period 24 to 30 months after financial close and will incur a 1% premium on tranche 1 balance.
This call option has been assessed and considered not closely related and it has therefore been
separated and measured at fair value through profit and loss. Management has concluded that early
redemption will not occur within the 30-month period and the separate derivative has been valued
at zero.
Medium Term Notes (‘MTNs’)
In addition to the Senior Facility, the Company has $55.5m subordinated MTNs with a maturity date of
30 November 2026.
The MTNs contains the following embedded derivative:
• Call Option related to the early redemption of the MTNs. Under the agreement, Pioneer may redeem
20% of the aggregate principal amount of the face value of the MTNs at no additional cost. The call
option premium relates to the remaining 80% and steps down over the life of the MTNs:
Redemption Date
Redemption Amount
Falling any time from (and including) 1 November 2022 to
(and including) 31 October 2023
Falling any time from (and including) 1 November 2023 to
(and including) 31 October 2024
Falling any time from (and including) 1 November 2024 to
(and including) 31 October 2025
Falling any time after (and including) 1 November 2025
103 per cent
102 per cent
101 per cent
100 per cent
79 | Appendix 4E and Annual Report
This call option has been assessed and considered not closely related and it has therefore been separated
and measured at fair value through profit and loss. Management has concluded that early redemption
on the applicable 80% of the MTNs will not occur prior to 1 November 2025 and the separate derivative
has been valued at zero.
Changes in liabilities arising from the financing activities
Borrowings
Lease liabilities
Borrowings
Lease liabilities
$’000
$’000
$’000
$’000
Opening
balance at 1 July
2021
Cash flow
Other
non-cash
flow1
Closing Balance at
30 June 2022
201,081
6,387
207,468
59,009
(2,199)
56,810
(3,429)
5,863
2,434
256,661
10,051
266,712
$’000
$’000
$’000
$’000
Opening
balance at 1 July
2022
Cash flow
Other
non-cash
flow1
Closing Balance at
30 June 2023
256,661
10,051
266,712
7,390
(1,610)
5,780
2,403
828
3,231
266,454
9,269
275,723
1Other Non-cash flow items include the effective interest charge determined in accordance with AASB 9.
20. Trade and other payables and liabilities
Trade and other payables
PDPs payable1
Other liabilities
2023
$’000
1,058
2,082
3,005
6,145
2022
$’000
1,056
24,611
3,054
28,721
1 PDP acquisitions of $2m and $24m finalised in late June 2023 and June 2022, respectively.
80 | Appendix 4E and Annual Report
21. Provisions
Current
Provision for long service leave
Provision for annual leave
Share based payments
Non-current
Lease make good
Provision for long service leave
Share based payments
Lease make good
2023
$’000
2022
$’000
583
522
1,426
1,404
73
45
2,082
1,971
396
434
42
872
421
395
155
971
The Group is required to make good each of its leased premises to their original condition at the end of
each lease which is 30 June 2029. A provision has been recognised for the present value of the estimated
expenditure required at the end of the lease term. No provision for make good has been recognised on
the Group’s short term leases as agreed with the Lessor.
Share Based Payments
A provision has been recognised for the current value of the obligation to settle in future periods, at the
market value, the long term incentive rights that have been converted into a cash obligation.
An agreement with former employees where unvested performance rights will be cash settled in line with
future vesting dates under the original long term incentive plan. These liabilities will be Fair Valued at each
reporting date and prior to each repayment date.
22. Events occurring after the reporting period
On 1 July 2023 the following events occurred relating to employee share schemes provided:
-
-
-
75,000
171,000
68,000
Indeterminate rights vested
Performance rights vested
Performance rights lapsed
81 | Appendix 4E and Annual Report
23. Financial Instruments
The Group has the following financial instruments
As at 30 June 2023
Measurement
Current
Non-current
Total
$’000
$’000
$’000
Financial assets
Cash and cash equivalents
Amortised cost
Trade and other receivables
Amortised cost
8,410
1,490
-
-
8,410
1,490
Purchased Debt Portfolios
Amortised cost
106,096
198,187
304,283
Other assets
Amortised cost
693
3,286
3,979
Financial liabilities
Trade and other payables
Amortised cost
Borrowings
Amortised cost
116,689
201,473
318,162
6,145
11,335
17,480
-
6,145
255,119
266,454
255,119
272,599
As at 30 June 2022
Measurement
Current
Non-current
$’000
$’000
Total
$’000
Financial assets
Cash and cash equivalents
Amortised cost
Trade and other receivables
Purchased Debt Portfolios
Other assets
Amortised cost
Amortised cost
Amortised cost
23,071
6,174
96,298
979
-
-
23,071
6,174
199,218
295,516
3,504
4,483
126,522
202,722
329,244
Financial liabilities
Trade and other payables
Borrowings
Amortised cost
Amortised cost
28,721
20,378
49,099
-
236,283
236,283
28,721
256,661
285,382
82 | Appendix 4E and Annual Report
Classification as trade and other receivables
Trade receivables are amounts due for services performed in the ordinary course of business. Other
receivables are held with the objective to collect the contractual cash flows and are therefore measured
at amortised cost under AASB 9, which is consistent with their treatment in prior years. All trade
receivables are expected to be recovered in one year or less hence have been classified as current.
Fair value of trade and other receivables, trade, and other payables
Due to the short-term nature of the current receivables and payables, their carrying amount is assumed
to be the same as their fair value and for most of the non-current receivables and payables, the fair values
are also not significantly different to their carrying amounts
24. Equity
Contributed equity
Ordinary shares – fully paid excluding treasury
shares
2023
Shares
2023
$’000
2022
Shares
2022
$’000
106,787,206 103,755
106,592,433 103,589
Share capital
Movement
2022
Opening balance 1 July 2021
Issue of shares
Treasury shares acquired
Treasury shares issued to employees
Exercise of warrants
Closing balance 30 June 2022
2023
Opening balance 1 July 2022
Treasury shares acquired
Treasury shares issued to employees
Closing balance 30 June 2023
83 | Appendix 4E and Annual Report
Number of shares
$’000
66,277,190
38,496,726
81,755
20,908
(4,617,216)
(2,370)
856,500
5,579,233
525
2,771
106,592,433
103,589
106,592,433
103,589
(272,727)
467,500
(84)
250
106,787,206
103,755
Ordinary shares
All authorised Ordinary shares have been issued, have no par value and the Group does not have a limited
amount of authorised capital.
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
Group in proportion to the number of and amounts paid on the shares held.
At a general meeting of shareholders, every shareholder entitled to vote may vote in person or by proxy,
attorney, or representative; on a show of hands every shareholder who is present has one vote; and on
a poll every shareholder who is present has one vote for every share held, but, in respect of partly-paid
shares, shall have a fraction of a vote for each partly-paid share.
Treasury shares
2022
Opening balance 1 July 2021
Treasury shares issued to employees
Treasury shares acquired during the period
Closing balance 30 June 2022
2023
Opening balance 1 July 2022
Treasury shares issued to employees
Treasury shares acquired during the period
Closing balance 30 June 2023
Number of shares
$’000
1,725,8441
(856,500)
4,482,316
5,351,660
2,253
(525)
2,370
4,098
5,351,6601
(467,500)
272,727
4,098
(250)
84
5,156,887
3,932
Shares issued to employees are recognised on a first-in-first-out basis. The shares may be acquired on
market and are held as treasury shares until such time as they are vested. Forfeited shares are reallocated
in subsequent grants. Under the terms of the trust deed, Pioneer Credit Limited is required to provide
the trust with the necessary funding for the acquisition of the shares. Included within the balance of
treasury shares are 400,000 management shares that were initially recognised in March 2014.
1 The Opening balance has been restated by $134,800 which was previously overstated
84 | Appendix 4E and Annual Report
Options
The Company has previously issued 8,000,000 unlisted options to the Managing Director, with 3,000,000
remaining unvested at 30 June 2023. No options were exercised or had expired during the period.
As part of the Company’s equity placement completed on 18 May 2022, 29,361,726 listed options were
issued on a one for one basis. These options have an exercise price of $0.80 and expire on 31 March 2025.
At 30 June 2023, all options issued remain outstanding.
Share based payment reserve
The following table shows a breakdown of the Share Based Payments Reserve and the movements in this
reserve during the reporting period.
The share-based payments reserve is used to recognise the grant date fair value of options and rights
issued but not exercised, over the vesting period.
At 1 July
Opening balance
Share based payments and executive share plan1
Forfeiture of shares under plan
Treasury shares loan repayments
Performance rights issued
At 30 June
2023
$’000
2022
$’000
7,015
767
(38)
-
(250)
7,494
6,414
1,126
-
-
(525)
7,015
12022 includes accelerated vesting of Rights that will be paid out in line with the original vesting dates, at the market value at that date
Warrant reserve
The following table shows a breakdown of Warrant Reserve and the movements in this reserve during the
reporting period.
Number
Number
2023
$’000
2022
$’000
5,566,808
2,689
11,146,041
5,460
-
-
-
-
-
(5,579,233)
(2,771)
5,566,808
2,689
5,566,808
2,689
At 1 July
Opening balance
Warrants issued
Warrants converted
At 30 June
85 | Appendix 4E and Annual Report
Foreign exchange translation reserve
The following table shows a breakdown of Foreign Exchange Translation Reserve and the movements in
this reserve during the reporting period.
At 1 July
Foreign currency translation
At 30 June
25. Capital management
2023
$’000
(159)
41
(118)
2022
$’000
-
(159)
(159)
The Group's objectives when setting a capital management plan are to:
• Ensure that the Group will be able to continue as a going concern whilst maximising the return to
shareholders through an optimal mix of debt and equity
• Focus on reducing the current cost of capital
•
identify the gearing levels based on the Group’s risk appetite; and maximise the return on invested
capital ensuring that all capital invested or reinvested to achieve internal return hurdles
• Focus on capital recycling through the sale of non-core portfolios
Although the Group is not subject to any regulatory requirement with respect to its capital position, it
maintains a focus on reducing current gearing levels with the significant sources of funding being supplied
by shareholder equity and variable rate financier borrowings, as well as appropriate trade working capital
arrangements.
The Board monitor key balance sheet ratios as part of the strategy as well as to demonstrate compliance
with the financier covenant requirements. Three year rolling capital forecast analysis is regularly reviewed
to assess the impact of growth and future opportunity on funding requirements with a focus on
determining adequacy of short to medium term requirements.
As far as possible, PDPs are funded from free cash flow, allowing undrawn balances to be maintained. Cash
is monitored daily to ensure that immediate and short-term requirements are met.
Details of financing facilities at 30 June 2023 are set out in Note 19.
Dividends
No dividends were declared or paid during the financial year. No dividends have been declared after the
financial year end.
86 | Appendix 4E and Annual Report
Franking Account
The balance of the franking account at year end is, on a tax rate of 30.0%, $5.8m (FY22: $5.8m).
26. Group structure
Significant investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities, and results of the following
subsidiaries:
Name of entity
Country of
Class of
Equity holding %
incorporation
shares
2023
2022
Pioneer Credit Solutions Pty Limited
Sphere Legal Pty Limited
Pioneer Credit (Philippines) Pty Limited
Pioneer Credit Connect Pty Limited
Pioneer Credit Broking Services Pty Limited
Switchmyloan Pty Limited
Credit Place Pty Limited
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ordinary
100
Ordinary
100
Ordinary
100
Ordinary
100
Ordinary
100
Ordinary
100
Ordinary
100
Pioneer Credit Acquisition Services (UK)Limited1
United Kingdom Ordinary
100
Pioneer Credit Solutions (NZ) Limited
New Zealand
Ordinary
100
Pioneer Credit Connect (Fund 1) Pty Ltd2
Pioneer Credit Connect (Personal Loans) Pty Ltd3
Pioneer Credit Limited Equity Incentive Plan Trust
Australia
Australia
Australia
Ordinary
100
Ordinary
100
N/A
100
100
100
100
100
100
100
100
100
100
100
100
100
1 Pioneer Credit Acquisition Services (UK) Limited is incorporated in the United Kingdom and has not conducted any business since inception
2 Pioneer Credit Connect (Fund 1) Pty Ltd was incorporated on 15 January 2018 and has not conducted any business since inception
3 Pioneer Credit Connect (Personal Loans) Pty Ltd was incorporated on 15 January 2018 and has not conducted any business since inception
87 | Appendix 4E and Annual Report
27. Parent entity financial information
The individual financial statements for the Parent entity show the following aggregate amounts:
Balance Sheet
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Shareholder equity
Contributed equity
Reserves
Accumulated losses
Total equity
2023
$’000
2022
$’000
639
17,873
167,600
215,439
4,770
4,722
281,417
272,678
(113,817)
(57,239)
104,075
103,909
8,475
7,992
(226,367)
(169,140)
(113,817)
(57,239)
(Loss)/profit for the year from continuing operations
(57,227)
(61,285)
Guarantees entered into by the Parent entity
The Parent entity is bound by an unlimited guarantee and indemnity as part of the Group, with security
held over all property.
Contingent liabilities of the parent entity
The parent entity had no contingent liabilities as at 30 June 2023.
28. Deed of cross guarantee
Pioneer Credit Limited, Pioneer Credit Solutions Pty Limited, Sphere Legal Pty Limited, Pioneer Credit
(Philippines) Pty Limited, Pioneer Credit Connect Pty Limited, Switchmyloan Pty Limited, Pioneer Credit
Broking Services Pty Limited, and Credit Place Pty Limited are parties to a deed of cross guarantee, entered
into on 25 June 2015. Switchmyloan Pty Ltd was joined to this deed on 6 June 2016 and Credit Place Pty
Limited was joined to this deed of cross guarantee on 12 June 2017.
Under the deed each Company guarantees the debts of the others. By entering the deed, these entities
have been relieved from the requirement to prepare a financial report and Directors' report under ASIC
Corporations (Wholly owned Companies) Instrument 2016/785 issued by the Australian Securities and
Investments Commission.
88 | Appendix 4E and Annual Report
The consolidated financial statements of Pioneer Credit Limited include the subsidiaries as set out in note
26.
Pioneer Credit Solutions (NZ) Limited, Pioneer Credit Acquisition Services (UK) Limited, Pioneer Credit
Connect (Fund 1) Pty Ltd and Pioneer Credit Connect (Personal Loans) Pty Ltd are not party to the deed of
cross guarantee. They are stand-alone wholly-owned companies. The Directors have determined that
Pioneer Credit Solutions (NZ) Limited, Pioneer Credit Acquisition Services (UK) Limited, Pioneer Credit
Connect (Fund 1) Pty Ltd and Pioneer Credit Connect (Personal Loans) Pty Ltd are not reporting entities.
As at 30 June 2023:
• Pioneer Credit Solutions (NZ) Limited has assets of $5.44m (2022: $3.49m), liabilities of $2.90m (2022:
$1.75m) of which the majority relates to amounts due to Group entities and contributed $0.74m
(2022: $0.36m) to Group profit before income tax; and
• Pioneer Credit Acquisition Services (UK) Limited has no assets (2022: nil) and liabilities of $0.02m
(2022: $0.02m) all of which relates to amounts due to Group entities. The UK entity generates no
revenue.
29. Contingencies
The group had no contingent liabilities as at 30 June 2023.
30. Commitments
Service Contract
The Group has services contracts for the operation of its Philippines facility that ends in February 2024,
telecommunications contracts that ends in October 2023 and February 2024, a IT contract that ends in
November 2025 and a payroll services agreement that ends in September 2024. The minimum contractual
commitments resulting from these agreements are outlined below.
Commitments for minimum service payments in relation to non-cancellable
contracts are payable as follows:
Within one year
Later than one year but not later than five years
2023
2022
$’000
$’000
2,955
3,333
4,012
1,938
6,967
5,271
89 | Appendix 4E and Annual Report
31. Related party transactions
Key Management Personnel
Short-term employee benefits1
Post-employment benefits2
Other long-term benefits3
Other4
Termination benefits
Options
Share-based payments
2023
2022
$
$
2,402,657 2,793,067
126,462
182,861
116,354
142,231
-
-
-
91,172
426,400
426,400
180,227
539,761
3,252,100 4,175,492
1Short-term benefits include salary, fees, non-monetary benefits and other short-term benefits as per Corporation Regulation 2M.3.03(1) Item 6
2Includes superannuation guarantee
3Includes annual and long service leave
Transactions with other related parties
Net rental expenses and other services:
Entities owned, related or controlled by KMP
Superannuation contributions:
Contributions to superannuation funds on behalf of Directors
Other – Alana John Design1
1Alana John Design is a related entity to Keith John
2023
2022
$
$
-
70,703
47,549
67,561
85,500
34,403
90 | Appendix 4E and Annual Report
2023
2022
$
$
-
-
-
-
-
-
-
500,000
20,095
(20,095)
2,500
(2,500)
(500,000)
-
2023
2022
$
$
-
-
-
-
-
-
-
-
-
-
1,100,000
-
87,500
(87,500)
-
-
121,674
(121,674)
(1,100,000)
-
Loans from related parties
Medium term notes
Loans from key management personnel:
Beginning of the year
Interest charged
Interest paid
Consent fee charged
Consent fee paid
Conversion of MTN to fully paid ordinary shares
End of year
Syndicate facility agreement (SFA)
Loans from key management personnel:
Beginning of the year
SFA - Tranche B drawdown
SFA - upfront, guarantee and facility fees charged
SFA - upfront, guarantee and facility fees paid
Warrants issued
Warrant exercised
Interest charged
Interest paid
Extinguishment of Loan
End of year
91 | Appendix 4E and Annual Report
Loans to related parties
In May 2022, Loans were issued to 4 executives for the purposes of acquiring shares under the Priority
Offer completed on 18 May 2022. The shares were issued at a purchase price of $0.55 with an attaching
Listed Option on a 1 for 1 basis with an exercise price of $0.80 expiring in March 2025.
The loans are on a full recourse basis with interest payable monthly at a rate of 5% per annum and are
secured by the underlying shares.
The Group engaged an external advisor to confirm that the transaction was of an arm’s length nature and
no Employee benefits have been recognised in relation to the loan or share transaction.
Loans to key management personnel
Loans to key management personnel:
Beginning of the year
Loans to KMP
Loans extinguished 1
Interest charged
Interest paid
End of year
1 Includes write-off of $65,536.
32. Share-based payments
Employee share scheme
2023
$
2022
$
(2,050,000)
-
-
(2,050,000)
150,000
-
(102,640)
(12,075)
102,640
12,075
(1,900,000)
(2,050,000)
No shares were issued under an Employee share scheme during the reporting period.
Equity incentive plan
The Company operates a Pioneer Credit Limited Equity Incentive Plan whereby certain eligible
employees are granted performance or indeterminate rights. Each Right entitles the holder to one fully
paid ordinary share for no consideration, subject to vesting conditions being met.
The cost of the equity settled transaction is determined by the fair value at the date when the grant is
made using an appropriate valuation model. Inputs to the valuation model include spot price, exercise
price, vesting period, expected future volatility, risk free rate and dividend yield.
92 | Appendix 4E and Annual Report
The cost is recognised in employee expenses together with a corresponding increase in equity
(reserves) over the vesting period.
On 1 July 2022, 250,000 performance rights were transferred to executives and senior leadership. Each
Right entitles the holder to one fully paid ordinary share for no consideration, provided the holder of
the Right remains employed by the Group at the Vesting Date. These were split into two tranches, with
one parcel vesting after 2 years and the other after 3 years.
The terms of each Right and assumptions used to determine fair value.
2023
1 July 2022
$10,875
$0.435
Nil
2
Nil
1 July 2024
2.590%
60%
2023
1 July 2022
$10,875
$0.435
Nil
3
Nil
1 July 2025
3.005%
60%
Grant date
Fair value at grant date
Share price at grant date
Exercise price
Expiration period – years
Dividend yield
Vesting date
Risk free rate
Volatility rate
Grant date
Fair value at grant date
Share price at grant date
Exercise price
Expiration period - years
Dividend yield
Vesting date
Risk free rate
Volatility rate
93 | Appendix 4E and Annual Report
Summary of Rights Granted
Equity settled rights issued during the year
Unvested Rights at the end of the period
2023
2022
Number of
rights
Number of
rights
467,500
500,000
4,165,250
4,011,500
The above unvested performance rights at 30 June 2023 include 371,250 rights that are cash settleable
upon vesting.
Pioneer Credit Limited Equity Incentive Plan Trust
The Trust acquires shares on market for the purpose of satisfying rights that vest under the Pioneer
Credit Limited Equity Incentive Plan.
The Trust acquired 272,727 shares during the financial year valued at $85,909. As at 30 June 2023 the
Trust held 4,756,687 shares (2022: 4,951,460)
33. Earnings / (Loss) per share
Basic earnings / (loss) per share
From continuing operations attributable to the ordinary equity
holders of the Company
Total basic earnings / (loss) per share attributable to the
ordinary equity holders of the Company
Diluted earnings / (loss) per share
From continuing operations attributable to the ordinary equity
holders of the Company
Total diluted earnings / (loss) per share attributable to the
ordinary equity holders of the Company
94 | Appendix 4E and Annual Report
2023
Cents
0.19
0.19
2022
Cents
(40.48)
(40.48)
2023
Cents
0.17
0.17
2022
Cents
(40.48)
(40.48)
Reconciliation of earnings / (loss) used in calculating earnings per share
2023
$’000
2022
$’000
Basic earnings / (loss) per share:
Profit/(loss) attributable to the ordinary equity holders of the
Company used in calculating basic earnings per share
From continuing operations
207
(33,094)
Diluted earnings / (loss) per share:
Profit/(loss) from continuing operations attributable to the
ordinary equity holders of the Company
Used in calculating diluted earnings per share
207
(33,094)
Weighted average number of shares used as the denominator
Weighted average number of Ordinary shares used as the
denominator in calculating basic earnings / (loss) per share
Weighted average number of ordinary and potential shares
used as the denominator in calculating diluted earnings per
share
2023
Number
2022
Number
106,141,050
82,143,521
123,758,468
82,143,521
Performance rights
Performance rights granted under the Pioneer Credit Limited Equity Incentive Plan are considered to
be potential Ordinary shares and have been included in the determination of diluted earnings per
share.
Options
Options granted under the Pioneer Credit Limited Equity Incentive Plan are considered to be potential
Ordinary shares and have been included in the determination of diluted earnings per share.
Warrants
Warrants granted under the Pioneer Credit Limited Equity Incentive Plan are considered to be potential
Ordinary shares and have been included in the determination of diluted earnings per share.
95 | Appendix 4E and Annual Report
34. Remuneration of auditors
During the year the following fees were paid or are payable for services provided by the auditor of the
Group, its related practices and non-related audit firms:
2023
$
2022
$
RSM Australia1:
Audit and review of financial reports
374,000
Statutory assurance services required by legislation to be
provided by the auditor
Other services2
Deloitte Touche Tomatsu1:
Audit and review of financial reports
Statutory assurance services required by legislation to be
provided by the auditor
Other services2
Total remuneration
-
-
-
-
-
-
728,200
126,500
374,000
854,700
1 RSM Australia became auditors of the group during the FY23 year, FY22 Deloitte Touche Tomatsu were the auditors
2 Other services are in relation to Vendor Due Diligence report as part of the refinance process in FY22
Amounts are inclusive of GST and expense reimbursement.
96 | Appendix 4E and Annual Report
Directors Declaration
In the Directors' opinion:
a) The financial statements and notes set out on pages 40 to 96 are in accordance with the
Corporations Act 2001, including:
•
Complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
• Giving a true and fair view of the Consolidated Entity's financial position as at 30 June 2023
and of its performance for the year ended on that date; and
b) There are reasonable grounds to believe that the Group will be able to pay its debts as and when
they become due and payable; and
c) At the date of this declaration, there are reasonable grounds to believe that the members of the
extended closed Group identified in note 26 will be able to meet any obligations or liabilities to
which they are, or may become, liable by virtue of the deed of cross guarantee described in note
28.
Note 2 confirms that the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Managing Director and Chief Financial Officer
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of Directors.
Keith John
Managing Director
Perth
28 August 2023
97 | Appendix 4E and Annual Report
RSM Australia Partners
Level 32 Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
To the Members of Pioneer Credit Limited
Opinion
We have audited the financial report of Pioneer Credit Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial statements, including a summary of significant accounting policies, and the directors'
declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(i) giving a true and fair view of the Group's financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor's Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the time
of this auditor's report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Measurement of Purchased Debts Portfolio (PDP)
Refer to Note 15 in the financial statements
The Group holds PDPs with a carrying value of
$304.2m, as set out in Note 15 of the financial
statements; the PDPs are held at amortised cost.
Our audit procedures, performed in conjunction
with our Data Analytic and Corporate Finance
specialists, included:
The measurement of the PDPs is estimated by the
Group using
flow
models (the models).
internally developed cash
Complexity arises in respect of the accounting for
PDPs due to the following:
requirement
the
to calculate credit-
adjusted effective interest rates (CAEIRs)
when PDPs are acquired
involves
significant judgement in estimating the
amount and timing of future expected
cash flows. In particular, judgement is
required in estimating the credit risk
attributes of PDPs that underpin modelled
cash flow forecasts on acquisition.
re-estimating future cash flows for PDPs
at the end of each period results in
impairment gains/losses which also
require significant judgement and reliance
on internally developed cash flow models.
estimating the impact of the macro-
economic outlook and future operational
performance on
flows
requires considerable judgement.
forecast cash
the models used by management remain
sensitive to the inherent uncertainty of
estimating future cash flows, both at
acquisition date and at period end.
As a result, the assessment of the carrying value
PDPs is a key audit matter.
Assessing the Group’s accounting policy for
compliance with Australian Accounting
Standards;
Assessing
the process undertaken by
management to measure and account for
PDPs;
Testing the design and implementation of
selected controls in relation to the PDP input
data and models;
Testing the mathematical accuracy and
mechanics of the end to end PDP modelling
process by re-creating the modelling process
in an independent environment;
Assessing the methodology used by the
Group to determine the construction of the
PDP models;
Assessing if the PDP models appropriately
included the expected amounts and timing of
cash flows from customers;
Assessing
the reasonableness of PDP
model parameters in relation to the period of
cash flow forecasts;
the
Assessing
assumptions and key estimates used in the
PDP models by:
reasonableness of
the
–
–
or
testing a sample of customer
account characteristics to source
documentation
system
information to assess the existence,
accuracy and completeness of the
PDP model data; and
assessing the original CAEIRs used
in the model for consistency to what
had previously been determined and
applied on historic PDPs
in
accordance with AASB 9;
Testing a sample of current year additions,
disposals and liquidations to underlying
source documents;
Key Audit Matter
How our audit addressed this matter
Testing the reasonableness of PDP interest
impairment gain/losses as
income and
calculated by management’s PDP modelling;
Testing the accuracy of the mathematical
outputs of the modelled forecasted cash
flows for all PDP tranches;
Testing
the PDP model performance
retrospectively, on a sample basis, against
actual historic liquidations, including the
reasonableness of the assignment PDPs to
modelled forecasted cash flows;
Challenging the assumptions, judgements
and quantifications made in determining the
management expert judgement adjustment
and model risk and operational risk overlays;
Testing the correct mathematical application
of model risk and operational risk overlays
and adjustments;
Agreeing
to
accounting entries recorded in the Group’s
financial report; and
Assessing
contained in the financial report.
the adequacy of disclosures
the PDP model outputs
Liquidity and going concern
Refer to Note 3 in the financial statements
At 30 June 2023, the Group generated a net profit
after tax of $0.17m (30 June 2022: loss $33.1m)
and has net current assets of $96.0m (30 June
2022: $74.5m).
The Directors have prepared the financial report
on the going concern basis.
The Senior Facility and MTNs contain covenants
which are closely linked to the carrying value of
the PDPs and the level and timing of forecasted
acquisitions,
including PDP
cash
liquidations and sales as disclosed in Note 15 to
the financial statements.
flows
The achievement of the cash flow forecasts are
subject to future events, some of which are
beyond the direct control of the Group.
Our audit procedures included:
Assessing and discussing with management
and Directors the reasonableness of the
Group’s cash flow forecast for the 12 month
period ended 31 August 2024;
Checking the mathematical accuracy of
management’s cash flow forecast;
Challenging the reasonableness of the key
assumptions used by management in the
cash flow forecast by comparison to our
knowledge of the business;
the key
Assessing
the sensitivity of
assumptions within management’s cash flow
forecast, particularly in relation to forecast
PDP liquidations, acquisitions and sales and
operating costs estimates;
Reading and understanding the key terms of
the Senior Facility and the MTN;
Checking the mathematical accuracy of
covenant calculations over the 12 month
period ended 31 August 2024 and critically
assessing the forecasted covenant
calculations including applying sensitivities
to PDP liquidations, acquisitions and sales
to identify reasonably possible potential
breaches; and
Key Audit Matter
How our audit addressed this matter
Assessing
made in the financial report.
the adequacy of disclosures
Recoverable amount of non-financial non-current assets
Refer to Note 16 in the financial statements
The carrying value of the Group's non-financial
non-current assets amounted to $11.9m at the
reporting date.
The Group is required to assess at 30 June 2023
whether there is any indicator of impairment in
relation to its non-financial non-current assets. If
any such indication exists, the Group is required
to estimate the recoverable amount of these
assets.
We determined this to be a key audit matter due
to the extent of management judgement and
estimates involved in:
assessing whether indicators of impairment
are present in relation to the Group’s non-
financial non-current assets; and
where indicators of impairment are identified,
determining the recoverable amount of the
Group’s non-financial non-current assets by
utilising a value in use model.
Our audit procedures included:
Assessing the Group’s accounting policy for
compliance with Australian Accounting
Standards;
Critically
evaluating
management’s
assessment
impairment
of whether
indicators for its non-financial non-current
assets were present at 30 June 2023;
Considering the Group’s determination of its
CGUs based on our understanding of the
operations of the Group’s business and how
the identifiable CGUs generate independent
cash inflows;
Considering the appropriateness of the value
in use model applied by the Group to assess
the carrying value of the CGU to which its
non-financial non-current assets were
allocated;
Challenging the Group’s forecast cash flows,
including EBITDA and growth assumptions,
flows
with particular
associated with forecast PDP liquidations,
acquisitions and sales and operating costs
estimates;
focus on cash
Considering the sensitivity of the model by
varying key assumptions, such as forecast
PDP acquisitions, growth rates and discount
rate, within a reasonably possible range;
Working with our valuation specialists, we
developed a discount rate range considered
comparable using publicly available market
data for comparable entities and assessed
the integrity of the value in use model used;
and
Assessing
included in the financial statements.
disclosures
adequacy
the
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group's annual report for the year ended 30 June 2023, but does not include the financial
report and the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description forms part of our auditor's
report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in within the directors' report for the year ended
30 June 2023.
In our opinion, the Remuneration Report of Pioneer Credit Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 28 August 2023
MATTHEW BEEVERS
Partner
Shareholder information
The shareholder information set out below was applicable as at 21 August 2023.
Distribution of securities
Analysis of numbers of equity security holders by size of holding
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Holders
Ordinary shares
490
502
237
506
152
206,231
1,378,327
1,821,535
17,503,696
91,034,304
1,887
111,944,093
There were 607 holders of less than a marketable parcel of Ordinary shares.
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted securities are:
Name
Mr Keith R John
Jamplat Pty Ltd
Citicorp Nominees Pty Ltd
Pacific Custodians Pty Ltd
Buttonwood Nominees Pty Ltd
BNP Paribas Noms Pty Ltd
Mr Irwin David Klotz
Mrs Lilian Jeanette Warmbrand
Plus 612 Capital Nominees Pty Ltd
Pacific Custodians Pty Ltd
S & G Morris Super Pty Ltd
ZLT Investment Co Pty Ltd
Mr Sunny Yang & Mrs Connie Yang
Wingate Corporate Credit Fund Pty Ltd
National Nominees Limited
Ms Elif Ceren Gunes
104 | Appendix 4E and Annual Report
Ordinary shares
Number
held
% of issued
shares
12,272,934
11,300,000
10.96
10.09
9,107,215
4,510,687
2,904,449
2,598,756
2,000,000
1,654,217
1,524,913
1,440,091
1,420,498
1,300,000
1,206,088
1,083,377
1,051,541
906,667
8.14
4.03
2.59
2.32
1.79
1.48
1.36
1.29
1.27
1.16
1.08
0.97
0.94
0.81
Mr Allan Hart
Lachlan 11 Holdings Pty Ltd
Wingate Investment Partners 3 Pty Ltd
BFA Super Pty Ltd
Name
Employee Incentive Plan
Name
Mr Keith R John
Substantial holders
Substantial holders in the Company are set out below:
Name
Mr Keith R John
Jamplat Pty Ltd
Citicorp Nominees Pty Ltd
Securities subject to voluntary escrow
903,100
900,000
840,033
801,313
0.81
0.80
0.75
0.72
Performance rights
Number held Number of
holders
3,615,000
7
Options
Number held Number of
holders
8,000,000
1
Number held
% of issued
shares
12,272,934
11,300,000
9,107,215
10.96
10.09
8.14
Escrow ends
1 July 2024
Voting rights
Class
Ordinary Shares
Number of shares
250,000
At a general meeting of shareholders: every shareholder entitled to vote may vote in person or by proxy,
attorney or representative; on a show of hands every shareholder who is present in person or by proxy,
attorney or representative has one vote; and on a poll every shareholder who is present in person or by
proxy, attorney or representative has one vote for every share held, but, in respect of partly-paid shares,
shall have a fraction of a vote for each partly-paid share.
105 | Appendix 4E and Annual Report
Thank You.