For the year ended 30 June 2024
Annual
Report
Contents Page
OVERVIEW .......................................................................... 1
2024 Highlights........................................................................................................................... 1
Corporate Directory ................................................................................................................... 6
ESG ......................................................................................................................................... 107
DIRECTORS’ REPORT ........................................................ 16
Directors ................................................................................................................................... 16
Principal Activities .................................................................................................................... 20
Review of Operations ............................................................................................................... 20
Business Risk Statement .......................................................................................................... 23
Remuneration Report - Audited ............................................................................................... 32
FINANCIAL REPORT ..........................................................46
Auditors Independence Declaration ........................................................................................ 46
Corporate Governance Statement ......................................................................................... 475
Financial Statements .............................................................................................................. 508
Consolidated entity disclosure statement ............................................................................. 975
Directors’ Declaration ............................................................................................................ 986
Independent Auditors Report .................................................................................................. 99
SHAREHOLDER INFORMATION ....................................... 105
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Overview
Pioneer’s strong FY24 performance was underpinned
by a solid operating output, disciplined cost management,
a dedicated leadership team, and a strong supply of PDPs
with an emerging preference in the market.
2024
Highlights
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Who we are
Pioneer Credit Limited (‘Pioneer’)
is an ASX-listed (ASX: PNC) financial
services business that provides
quality and flexible financial support
to everyday Australians experiencing
debt stress. We help our customers
out of financial difficulty and 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.
A focus on customer service
Our purpose is to put an end to debt stress.
Over the last 15 years we’ve helped more
than 350,000 customers get their finances
back on track. Our customer-centric
empathetic approach and flexible solutions
ensure a supportive environment and
affordable payment options.
With more than 210,000 current 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 emerge
as a ‘new consumer’.
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 adhere to compliance best
practice. This approach means we are
confident of delivering an industry-leading
service to our partners.
Partners
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.
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Financial Report
Shareholder Information
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Strong corporate culture
Pioneer has a strong corporate culture, built
on three principles.
Be Human
We see people, and
seek to understand
Choose Integrity
We do what’s right,
not what’s easy
Act with Purpose
We commit to making
a positive difference
These principles are a well-defined
set of values that our people work and live
by. They form the core of what we expect
from our people and are embedded
throughout the organisation. These principles
set us apart in the market and we’re proud
to be considered first choice for many of our
vendors. The principles underpin every
interaction we have with our customers and
our stakeholders, helping us lead with care
and empathy at all times.
24%
in QLD
1% in NT
32%
in NSW
1%
in ACT
11% in WA
24%
in VIC
5% in SA
Over 349 Pioneer people are
helping 210,000 Australians
experiencing debt stress
Distribution of Pioneer’s Australian customers
Metrics as of 30/06/24
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Performance
Pioneer Credit Limited ABN 44 103 003 505
Appendix 4E
Preliminary Final Report
for the year ended 30 June 2024
(previous corresponding period 30 June 2023)
Appendix 4E – Results for announcement to the market
Key information ($’000)
Revenue from ordinary activities*
down
14.1%
to
71,080
(Loss)/Profit from ordinary activities after tax attributable
to members
down
10,205
to
(10,039)
Net (loss)/profit for the period attributable to members
down
10,205
to
(10,039)
*Revenue from ordinary activities excludes interest income on bank deposits and loans to management.
Dividends per ordinary share
There is no provision for a final dividend in respect of the year ended 30 June 2024.
Financial Statements
Released with this Appendix 4E report are the following:
•
Consolidated Statement of Profit or Loss and Other Comprehensive Income
•
Consolidated Statement of Financial Position
•
Consolidated Statement of Changes in Equity
•
Consolidated Statement of Cash Flows
•
Notes to the consolidated financial statements
This report is based on financial statements which have been audited.
Key ratios
30 June 2024 (cents)
30 June 2023 (cents)
Net tangible assets per fully paid ordinary share
16.42
38.81
Basic (loss)/earnings per fully paid ordinary share
(8.66)
0.19
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Corporate Directory
Directors
Mr Stephen Targett (Chairman)
Mr Keith John (Managing Director)
Mr Peter Hall
Ms Pauline Gately (commenced 29 August 2023)
Ms Suzan Pervan (commenced 29 August 2023)
Company Secretary
Ms Susan Symmons
Principal Registered Office
Level 6
108 St Georges Terrace
Perth WA 6000
Share Registrar
Link Market Services Limited
Level 12
250 St Georges Terrace
Perth WA 6000
Auditor
RSM Australia Partners
Exchange Tower
Level 32/2 The Esplanade
Perth WA 6000
Solicitors
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
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ESG
Pioneer’s ESG position encompasses five pillars that demonstrate how
we integrate environmental, social, and governance considerations into
our business.
Pillars
Pioneer’s five ESG pillars were developed through an assessment designed to align with
opportunities. Engaging with internal and external stakeholders, Pioneer identified five pillars
where we could have the greatest positive impact. Subsequently, Pioneer began developing
a governance framework and identifying measures for each pillar, guided by external bodies such
as the Sustainability Accounting Standards Board, the International Integrated Reporting Framework,
and Australian Institute of Company Directors. A considerable number of policies, practices, and
programs support the pillars, ensuring they are embedded into our core strategy, investment,
business operations, and risk practices.
Our ultimate aim is to position Pioneer for sustained growth, whilst making a positive impact
on our customers and our broader community. Moving forward, Pioneer will continue to refine
the ESG strategy by establishing meaningful metrics and targets tailored to our business within
each pillar.
Environmental
Social
Governance
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Pioneer’s approach to ESG
Our approach to ESG is closely
linked to our purpose: to put
an end to debt stress.
Pioneer continues to embed ESG
considerations into strategy, risk,
and business management practices
to have a positive impact on our
stakeholders and the communities
in which we operate.
Pioneer’s ESG Governance
framework is supported by the ESG
Sub-Committee, which ensures
financial transparency by meeting
Australian Accounting Standards Board
(“AASB”) disclosure requirements,
fosters collaboration between
executives on ESG matters, and fulfills
legal and constitutional obligations.
Pioneer’s Head of Finance, Ilijana Vidic
is the Chair of the ESG Sub-Committee,
with other members including
representatives from the Leadership
team and broader business.
Our ability to deliver on our ESG
strategy requires the Company to
have the right skills, and we seek to
build these through developing our
core competencies, which are
underpinned by employing people
that are ‘founded in good’.
Corporate Governance Framework
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Environmental
Climate Awareness
Pioneer is committed to not only fostering a more sustainable business but also having
a meaningful impact on the environment. While Pioneer operates in a non-carbon intensive
environment, we adopt sustainable options as part of our everyday business, paving the way
for a more sustainable future
Our environmental stewardship includes:
4.0
NABERS Energy Rating
We prioritise in-office paperless operations
and efficient energy consumption
Helping customers affected by
natural disaster with the option
to put their accounts on hold
Environmentally preferable
cleaning products and
office supplies
Responsible waste recycling,
donation, and disposal
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Social
Customer Care
We are focused on doing the right thing for our customers and aim to provide a premium service
experience. Our innovative and tailored solutions meet our customers’ financial capacity and reflect
our core principles.
Our customer care includes:
+21
Customer NPS
Pioneer’s exceptional NPS
demonstrates our dedication
to customer satisfaction and
the positive impact we have
on people
210k
Customers we’re
helping
We proudly assist customers
experiencing financial stress by
offering affordable payment
arrangements
84k
Customer portal logins
Our self-service portal
improves user experience
and accessibility. Other
customer-centric initiatives
include capped interest rates,
no lending offerings, and flexible
payment arrangements
Hardship training
for employees
Employees are trained to
identify genuine hardship. With
a dedicated Hardship & Care
team to support vulnerable
customers
$1.2m
Debt waived for FY24
Vulnerable customers received
debt waivers.
Commitment
to improve
Pioneer routinely reviews
all customer insights. We
investigate potential gaps and
consider business improvement
opportunities
Complaint
management
The Internal Dispute
Resolution team aims
to resolve all complaints
and avoid escalation
Customer data
protection
Pioneer has comprehensive
cyber security practices
including encryption, regular
audits, and continuous
monitoring to ensure our
customers’ data is kept safe
and protected.
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Pioneer People
We recognise, respect, and value differences in those around us, focusing on the action and
understanding of what makes Pioneer diverse. Pioneer encourages a broad mindset of different
ideas formed from different experiences, and a willingness to embrace those differences.
Our commitment to supporting our people includes:
+17
Employee NPS
The high engagement score is
indicative of our positive culture
55%
Leadership positions
filled internally
Pioneer provides opportunities for career
progression including secondment, training,
and coaching
Culture of belonging
Pioneer’s employee value proposition
is based on a culture of genuine care,
where we value the life experiences of
our people, empowering them to carry
out important work and access unbound
career opportunities
Programs and opportunities
Pioneer has a range of employee
reward and recognition initiatives, an
employee assistance program, learning
and development opportunities and perks
such as discounted gym memberships to
improve employee health
Training opportunities
Pioneer is committed to providing
exceptional customer service. That’s
why our employees receive extensive
training in empathy, resilience, trust
building, mental health and more
Mental Health First Aid
Pioneer is committed to caring for
its employees and providing a safe
work environment. The Mental Health
First Aid Australia course is available
to our employees
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Community Commitment
From putting our hands up to volunteer, to supporting long-term community partnerships,
we’re committed to working with people who share our values. Through our valued partnerships,
we're helping to give back to local communities through important initiatives that have the power
to change lives.
Causes we support
How we’re involved
ToyBox Australia
At Pioneer we partner with ToyBox to raise
money to donate gifts to ill children during
the Christmas period.
R U OK
Pioneer participates in R U OK day, to raise
funds for suicide prevention
Cancer Council WA
We take part in Australia’s Biggest Morning Tea,
the Cancer Council Morning Tea, to raise funds
for a cancer-free future.
Pioneerhearts
Our Pioneer team is proud to give
back, volunteering their time to support
community events and programs that
deliver positive change.
Our community commitment includes:
$1.1m
Donations contributed
Since 2014 Pioneer has contributed
to various important community causes
that have the power to change lives
ToyBox partnership
Pioneer highly values its partnership
with ToyBox Australia. Our employees
volunteer and participate in initiatives
that have a positive impact
Matching donations
Pioneer matches employee donations
to further extend the helping hand we
can provide local communities.
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Governance
Responsible Business
We are committed to responsible business practices. Our system of governance is designed
to foster a culture that values accountability, ethical behaviour, and always protects our
stakeholders’ interests.
Our high standards of corporate governance include:
Risk management
and monitoring
Pioneer takes responsibility for
its actions with oversight from
various committees such as
Investment, People,
Remuneration and Nomination,
Audit & Risk Management and
the Board of Directors
Ethical standards
We proudly uphold strong
ethical standards. Solid
foundations have been
established in our principles,
servicing model, Code of
Conduct and training schedule.
Regular auditing
Pioneer protects the business
and its customers through
internal and external auditing,
the use of a risk register, an
incident management system
and quality monitoring
Ethical debt recovery
Pioneer takes a customer-first
approach and aims to treat all
customers with dignity, honesty,
and respect
80%
Independent Board
of Directors
The majority of our Board of
Directors are Independent. This
encourages accountability and
risk management oversight
when overseeing key decisions
Whistleblower policy
Pioneer encourages personnel
to report contraventions and
provides protection from
victimisation or dismissal,
upholding confidentiality where
appropriate.
Aligned to APRA
Pioneer proactively aligns
to APRA standards where
applicable. We are proud of our
compliance and regulatory
record
Upholding
procurement standards
Pioneer’s Supplier Management
Framework ensures we uphold
the Modern Slavery Act and
human rights standards within
our procurement practices
!
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Pioneer Social Pillars
1. Ethical Debt Recovery
Pioneer’s purpose is ‘to put an end to debt stress’.
2. Prioritising Mental Health and Wellness
We are dedicated to fostering a positive and supportive work environment, 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
an employee assistance program, 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
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.
For customers that are most challenged, we provide debt waivers. During the year ended 30 June 2024,
we waived over $1.2m of customer debt.
Pioneer supports and respects the human rights of everyone it works with and has a comprehensive
approach to Modern Slavery and Human Trafficking.
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;
• commit to a workplace free from workplace bullying, harassment, victimisation, and abuse,
unlawful or inhumane treatment.
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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 provided financial support to nine different organisations.
Our largest staff-driven campaign is in December each year 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 each of the Company and the Managing Director and
in FY24 this programme contributed $20,050 to ToyBox.
Supporting this programme is the opportunity for our people to spend a day wrapping presents
for Perth Children's Hospital.
5. Belonging
We have always recognised the value of a diverse workforce. 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.
Our Belonging 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.
6. Outlook
In FY25, we have committed to advancing our ESG outcomes under the ESG sub-committee who
are responsible for providing recommendations to the Executive and Board with respect to ESG
considerations.
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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
2024.
Directors
The following were Directors of Pioneer during the financial year and at the date of this report:
• Mr Stephen Targett (Chairman)
• Mr Keith John (Managing Director)
• Mr Peter Hall
• Ms Pauline Gately (commenced 29 August 2023)
• Ms Suzan Pervan (commenced 29 August 2023)
• Ms Michelle d’Almeida (resigned 29 August 2023)
Information on Directors
Mr Stephen Targett
Independent Non-Executive Chairman
Experience and expertise
• Appointed a Director in June 2021
• Appointed Chairman on 31 December 2022
• Extensive financial services experience as a board member and
an executive in Australia and overseas
• Current Chairman of CPT Global Limited and former Chair of
member-owned bank Police & Nurses Limited (P&N) and BCU,
a division of P&N.
• 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 – 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: 211,363
Options (Listed): 136,363
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Mr Keith John
Managing Director
Experience and expertise
• Founder of Pioneer Credit with over 30 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
Member of People, Remuneration and Nomination Committee
Interests in share and options
Ordinary Shares: 17,297,934
Options (Listed): 4,527,273
Indeterminate rights: 2,807,766
Mr Peter Hall
Independent Non-Executive Director
Experience and expertise
• Appointed a Director of Pioneer in January 2021
• 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
Listed Company Directorships
including those held at any time
in the previous 3 years
BNK Banking Corporation Limited from 15 Nov 2015 to 31 October
2022.
Special responsibilities
Member of Audit and Risk Management Committee
Member of People, Remuneration and Nomination Committee
Interests in share and options
Ordinary Shares: 225,000
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Ms Suzan Pervan
(commenced 29 August 2023)
Independent Non-Executive Director
Experience and expertise
• Appointed a Director of Pioneer in August 2023.
• An experienced accounting professional, with nine years at
Ernst & Young in Australia and five years internationally,
including with PwC.
• Co-founder of the highly regarded Perth-based accountancy
firm, Gooding Pervan until her retirement from the firm in
2010.
• Former director of United Credit Union and member of the
Australian Institute of Company Directors and Chartered
Accountants
Listed Company Directorships
including those held at any time
in the previous 3 years
Nil
Special responsibilities
Chair of the Audit & Risk Management Committee
Member of People, Remuneration and Nomination Committee
Interests in share and options
Nil
Ms Pauline Gately
(commenced 29 August 2023)
Independent Non-Executive Director
Experience and expertise
• Appointed a Director of Pioneer in August 2023.
• An experienced accounting professional, with nine years at
Ernst & Young in Australia and five years internationally,
including with PwC.
• Co-founder of the highly regarded Perth based accountancy
firm, Gooding Pervan until her retirement from the firm in
2010.
• Former director of United Credit Union and member of the
Australian Institute of Company Directors and Chartered
Accountants
Listed Company Directorships
including those held at any time
in the previous 3 years
Chairman – Kalgoorlie Gold Mining Ltd
Director – Elixinol Wellness Ltd (Chair of Audit and Risk Committee)
Previous – Ardiden Ltd
Special responsibilities
Member of Audit and Risk Management Committee
Member of People, Remuneration and Nomination Committee
Interests in share and options
Nil
Ms Michelle d’Almeida
(resigned 29 August 2023)
Independent Non-Executive Director
Experience and expertise
Appointed a Director of Pioneer in June 2022 and resigned on 29
August 2023.
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Company Secretary
Ms Susan Symmons joined Pioneer as Company Secretary and General Counsel on 1 October 2015. Ms
Symmons has over 30 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.
Dividends
No dividends were paid during the finance year (2023: $nil).
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Meeting of Directors
The number of meetings held, and attended, by the Directors during the year ended 30 June 2024 was:
Board Meetings
Audit and Risk
Management
Committee Meetings
People, Remuneration
and Nomination
Committee Meetings
Name
Attended
Held
Attended
Held
Attended
Held
Mr Stephen Targett
11
11
6
6
3
3
Mr Keith John
11
11
N/A
N/A
3
3
Mr Peter Hall
11
10
6
6
3
3
Ms Suzan Pervan1
10
10
4
4
2
2
Ms Pauline Gately1
10
10
4
4
2
2
Ms Michelle d’Almeida2
1
1
2
2
1
1
1 Appointed on 29 August 2023.
2 Ms Michelle d’Almeida resigned on 29 August 2023.
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’).
Review of Operations
FY24 has been a remarkable year for the Group marked by continued growth in market share within
Australia’s purchase debt portfolio (‘PDP’) sector, and the successful completion of refinancing of the
Company’s senior debt facilities.
With the completion of refinancing in June 2024, the Board has adopted a prudent and cautious
approach. This will enable the business to advance the process of rebuilding its balance sheet during
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FY25, while also safeguarding shareholders from the potential prolonged effects of higher interest
rates and inflation, should economic conditions deteriorate.
The FY24 result reflects the crucial steps taken to materially strengthen the Company and position it
for the renewed profitability and growth from now onwards. Key FY24 initiatives include:
• Reducing the cost of funds by unwinding previously expensive funding following the execution
of a new four-year syndicated facility agreement for $272.5 million on 28 June 2024;
• Taking a precautionary impairment of $18m to shield the Company against potential economic
deterioration;
• Recognising $21.4m of Tax Assets validating the Board’s confidence in the Company’s future
profitability; and
• Enhancing reporting disclosures in line with best practices established by the Company’s
northern hemisphere counterparts.
Syndicated Facility Agreement
The new financing facility (‘Facility’) was arranged by the Nomura group of companies including long-
term substantial shareholder Nomura Holdings Inc, Nomura Australia Ltd, who was Arranger to the
Company in 2020 and 2021, and more recently, Nomura Singapore Inc, who provided a facility in
December 2023 at a reduced cost to Pioneer’s previous senior financier. The Facility includes $50m of
growth funding from a syndicate of high-quality lenders, including Challenger, Keyview Financial
Group, Nomura Special Investments Singapore, and Revolution Asset Management (‘Syndicate’). The
Facility’s 4 year term provides the Company with funding security and significantly reduces Pioneer’s
funding costs by ~$8m in FY25.
Additionally, the Facility also includes an opportunity to marginally decrease the cost of funds further
through various ESG and other measures, which we aim to achieve by the end of FY25.
The Facility also includes provisions for potential upsizing. Should the Syndicate not wish to increase
its commitment on the terms provided, the Company has the flexibility to introduce other senior
funders alongside the Syndicate to support investment opportunities beyond the initial $50m growth
facility.
With the completion of this refinancing, the business is returning to more normalised trading
conditions enabling us to consider additional initiatives to further reduce the cost of funds further,
such as the paydown of the Medium-Term Notes.
Precautionary Impairment
With consumer confidence at multi-year lows and cost of living pressures persisting due to ongoing
inflation, the Company has taken a precautionary impairment of $18m. The impairment is considered
precautionary because, despite the continued negative economic data, our experience within Pioneer
tells a different story. Our portfolios are performing well, with consumers continuing to pay down debt
more quickly than in the past 3 years. Additionally, where consumers are on a payment arrangement,
payments are also at their highest level in three years.
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Deferred Tax Asset
In FY21, following the termination of a Scheme of Arrangement and expensive refinancing of the
Company’s debt, the Company experienced a period of losses, and the Board derecognised its Deferred
Tax Assets (‘DTA’).
Tax assets can only be recognised when it is probable that an entity will generate future taxable profits
and the Company can utilise those tax assets. The Company continued to incur losses until FY23 when
it achieved a small profit, followed by a profit on a normalised basis in FY24. With the refinancing of
the Company and strong market dynamics, based on its three-year forecast projections, the Board now
expects the Company to be able to utilise those losses.
Consequently tax assets totalling $21.4m have been recognised in FY24 with an additional $13m
expected to be utilised in future periods. The Board believes it has taken a cautious approach in
recognising these tax assets at this time.
PDP Investment
In October 2023, Pioneer provided guidance to the market that its PDP purchasing for the financial
year would be $60m, while also noting significant opportunities in the market. In our typically cautious
approach to any form of guidance, we recognised the opportunity but needed to ensure that, given
our then constrained balance sheet, we could capture the most appropriate opportunities for our
platform.
Our business development efforts identified opportunities that were largely unique to Pioneer. In
December 2023, this led to an upgrade in our guidance to $85m, following the acquisition of a large
portfolio of CBA originated credit cards and personal loan accounts from Panthera Finance Pty Ltd.
By March 2024, deep into the refinancing process, the Company initiated steps to secure additional
portfolios with excellent return profiles, resulting in a total PDP investment of $93.6m for the period.
FY24 marked another year of exceptionally good investment for Pioneer, and one which we expect to
contribute meaningfully to profitability quickly.
Compliance, customer treatment and audit
The regulatory environment in which Pioneer operates has continued to see increased activity from
regulators and supervisory bodies. The heightened focus appears to be driven by two factors:-
• The debt collection practices of some competitors in recent years; and
• The expectation that debt purchase groups, particularly those with banking and finance clients,
align more closely with APRA standards across areas such as servicing and remediation,
information technology infrastructure, data security and cyber resilience.
Pioneer welcomes this increased scrutiny, as it drives continual improvement in our business as we
adapt our practices to meet evolving expectations and standards. However, the ongoing elevation of
standards also brings higher compliance costs, which many sub-scale and smaller competitors may
find difficult to meet, and these costs are increasing the moat around the Pioneer business.
Through FY25 we expect to see continued and increased regulatory focus on operating and servicing
platforms and practices, which will ultimately lead to better customer outcomes.
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Cost to Service (CTS)
Employee expenses are the single largest cost in Pioneer, making the efficiency of our people critical
to delivering profitability improvements. We measure the impact of total expenses, excluding finance
costs, as Cost to Service (‘CTS’).
During FY24, on a normalised basis (excluding one-off costs) CTS was flat at 35%. We are pleased with
this result, which falls at the lower end of the previously guided range of 35%-37%, where the Company
expects to remain in FY25. With further scale and transition to our new operating platform in FY25, we
plan to gradually reduce this cost further over time.
Business Risk Statement
The Company has a comprehensive risk management framework, and the Board has identified key
risks as follows:
(a) Sufficiency of funding
There are reasonable grounds to believe the Company will be able to pay its debts as and when they
become due and payable. On 28 June 2024, Pioneer refinanced its existing senior debt as follows:
• $272.5m Senior Finance Facility including $50m funding for growth
• Initial term of four years expiring June 2028; and
• Initially priced at the Bank Bill Swap Rate plus 550 bps.
The Company recently replaced its existing $55.5m Medium Term Notes which resulted in MTNs with
a maturity date of 29 December 2028.
(b) Breach of finance facility covenant
A breach of a covenant under the Company’s facility agreement could potentially result in its financiers
calling the debt, if not remedied within the agreed timeframe.
The Company’s forecasts of the Group’s liquidity reserve and compliance with debt covenants based
on expected cash flow are continuously managed and monitored. Cash flow and covenant compliance
is forecast on a day-to-day basis.
(c) Availability and pricing of debt portfolios
In order to continue its profitable growth, Pioneer needs to be able to purchase debt portfolios at
appropriate prices and manage the portfolio accounts to maximise recovery. The availability of debt
portfolios at appropriate prices is affected by a number of factors, some of which are outside Pioneer’s
control, including:
• The level of credit extended to consumers, and the percentage of credit in arrears;
• The level of unemployment and rate of consumer savings can have a major impact on the level
of credit in arrears. Credit arrears are a function of a borrower’s ability to pay, which is often
related to a borrower’s ability to generate an income through employment, as well as access to
any savings in the event of unemployment or financial stress;
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• The appetite of corporate institutions to outsource arrears management can be affected by a
number of matters, including but not limited to, a change in economic outlook, a change in laws
or regulations, a change in accounting policies or practices, the consolidation of creditors,
increased reliance on debt collection agencies or increased sophistication in internal collection
efforts; and
• Negative publicity or reputational damage to the receivables management industry as a whole
which may be caused by debt collection techniques employed by sector participants that are
not in line with the expectations of the general community or cause, among other things,
distress in the general community through unfair treatment, harassment or any other number
of unfair practices. These practices may become publicised and result in Pioneer’s vendor
partners restricting or ceasing to sell debt portfolios.
Accordingly, risks for Pioneer include:
• Insufficient debt portfolios becoming available for purchase. A number of factors can impact
the number and suitability of debt portfolios available for purchase including but not limited to
economic conditions which result in Pioneer’s vendor partners or potential new debt sellers
having insufficient (or any) under-performing debt portfolios to sell; and
• Increased competition in the purchased debt portfolio market which could result in competitors
offering higher prices for debt portfolios. This could result in lower margins for Pioneer if
Pioneer has to increase its portfolio acquisition costs.
(d) Purchase of debt portfolios
When Pioneer acquires debt portfolios from its vendor partners, it assumes the risk that the accounts
within the portfolios will not be repaid in full or at all. However, a number of steps are undertaken by
Pioneer before proceeding with an acquisition, in order to minimise this risk. These include the
following:
• Pioneer seeks to purchase only debt portfolios that comprise the type of accounts that it
understands well and has the competency and experience to conduct due diligence on, price
appropriately, and recover an amount that is at least in line with its expectations at the time of
purchase;
• Currently, Pioneer focuses on certain types of debt portfolios that it considers to be its core
competencies. The majority of Pioneer’s purchases are personal loan and credit card portfolios.
Pioneer also purchases consumer leases, consumer rental agreements and transactional
accounts. Pioneer may enter into new types of portfolio purchases subject to being satisfied
with the conduct of due diligence on the portfolios targeted; and
• Pioneer has to date purchased accounts from reputable financial institutions, including
Australia’s major banks and has not purchased accounts held by customers that it understands
were regarded as credit impaired or “non-conforming” applicants at the time of applying for
the loan from the original vendor partner.
(e) Existing debt portfolios and recovery of accounts
Pioneer purchases debt portfolios which often consist of a substantial number of accounts without
contact details and for which the seller of the portfolio has made numerous attempts to collect. Such
accounts may subsequently be deemed uncollectable and written off. Pioneer’s strategy for
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maximising its customer payments over time is to minimise discounts offered for early payment and
encourage customers who cannot meet the payment schedule under their existing loan agreement to
enter into a new arrangement, known as a payment arrangement. Not all customers with a payment
arrangement pay on time, all of the time, or at all. In addition, some customers will not enter into a
payment arrangement. Therefore, it may take a significant amount of time to recover on accounts and
there is no guarantee that Pioneer will recover any or all of the accounts comprising a debt portfolio.
Changes in macroeconomic factors such as an increase in interest rates and cost of living may impact
on recovery of accounts. In addition, Pioneer may not be able to identify macroeconomic trends or
make changes in its purchasing strategies in a timely manner.
While Pioneer expects its existing debt portfolios to provide customer payments in the future, there
can be no guarantee that customer payments will be consistent with historical performance or will
meet forecast rates. The statistical models and analytical tools that Pioneer uses in its business to
assess and analyse debt portfolios may prove to be inaccurate, and Pioneer may not achieve
anticipated customer payments which could lead to valuation impairments on portfolios.
If the assumptions used by Pioneer in its models are incorrect or if some of the accounts in a debt
portfolio behave differently from the way Pioneer expects, this could result in a loss of value in a
portfolio after purchase and a continuing deterioration in value over time as actual revenue can
deviate significantly from the revenue estimates produced by Pioneer’s pricing model as accounts age.
If the value of Pioneer’s debt portfolios deteriorates, or Pioneer is unable to collect sufficient amounts
on its portfolios, it may not be able to take advantage of opportunities for further portfolio purchases
as they arise. Ultimately, all portfolios have a finite life and must be replaced with new portfolios.
(f) Technology
Pioneer is heavily reliant on technology to manage its day-to-day operations. Should an event or series
of events (including a breach of cybersecurity or data hacking incident) 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.
(g) Staffing
Pioneer’s success depends on identifying, hiring, training, and retaining skilled personnel and senior
management. Pioneer needs to retain its existing trained workforce and attract new personnel as it
grows. Competition for such personnel is keen and there can be no assurance that Pioneer will always
be successful in attracting and retaining such personnel.
If a significant number of staff leave Pioneer within a short period of time, Pioneer may suffer
operational difficulties.
(h) Reliance on key personnel
Pioneer is substantially reliant on the expertise and abilities of its key personnel in overseeing the day-
to-day operations of its business. There can be no assurance given that there will be no detrimental
impact on Pioneer if one or more of these employees cease their employment with Pioneer.
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(i) Loss of key relationships
A significant decrease in the volume of debt portfolios available for purchase from any significant
vendor partner on acceptable terms would force Pioneer to seek alternative sources of portfolios to
purchase. In addition to the factors that impact the supply of debt portfolios generally, vendor
partners with whom Pioneer has strategic relationships may not continue to sell debt portfolios to
Pioneer on desirable terms or in acceptable quantities, and Pioneer may not be able to replace such
portfolios with portfolios from other debt vendors. A debt vendor’s decision to sell a debt portfolio to
Pioneer is based on various factors, including the price and terms offered and the quality of Pioneer’s
reputation, scale, track record of completed transactions and compliance history.
The loss of a key relationship with a vendor partner could jeopardise Pioneer’s existing relationships
with other vendor partners or its ability to establish new relationships with other vendor partners.
Pioneer may be unable to find alternative sources from which to purchase debt portfolios and, even
if such purchases could be successfully replaced, the search could take time or the portfolio could be
of lower quality or higher cost, any of which could materially and adversely affect Pioneer’s business,
financial condition and results of operations.
The loss of a significant key relationship, or the loss of a number of key relationships at the same time,
could prevent or restrict Pioneer’s ability to purchase debt portfolios at current or forecast levels. This
could impact profitability materially.
(j) Regulatory and legislative risks
Pioneer operates in an industry with a strict legal and regulatory framework. As with other regulated
entities in the industry, Pioneer is often required to provide information to regulators, including ASIC
and AFCA to respond to inquiries in relation to its activities and regulatory compliance. Any failure by
Pioneer to comply with its Australian Credit License (‘ACL’) and applicable laws and regulations relating
to the purchase of debt portfolios, collection on the accounts it acquires, the broader consumer credit
industry and National Consumer Credit Protection Act 2009 (Cth) matters could result in the
suspension, termination or impairment of Pioneer’s ACL or the termination of certain forward flow
agreements (‘FFAs’) and therefore could adversely affect Pioneer’s reputation, its business and/or
result in substantial losses.
Changes in the regulatory environment relating to the credit industry generally could have an effect
on Pioneer’s future business, operations, and financial performance. Pioneer is not currently aware of
any specific material changes in relevant regulations or policy which are likely to materially adversely
affect Pioneer or its business.
Pioneer must ensure that there are no breaches of its ACL, the National Consumer Credit Protection
Act 2009 (Cth), the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 (Cth), the
Privacy Act 1988 (Cth), the National Consumer Credit Protection Regulations 2010 and the National
Credit Code or other relevant existing legislation in relation to its practices. Further compliance is also
required to relevant sections of the Corporations Act.
Breaches of legislation or licence conditions or adverse changes in government policy can have
significant consequences for Pioneer. Potential consequences include:
• civil and/or criminal penalties;
• significantly increased compliance costs;
• variation or imposition of license conditions or loss or suspension of licenses;
• temporary or permanent banning orders being made;
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• being forced to change business practices;
• termination of certain PDP purchasing agreements;
• litigation being taken against Pioneer;
• imposition of enforceable undertakings or fines;
• reputational damage or reduction of the desirability of the Pioneer brand; and
• adverse effects on Pioneer’s ability to retain business and attract new business.
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 Pioneer maintains a culture of regulatory compliance.
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. There is a risk that any new or
changed legislation or regulations could require Pioneer to increase its spending on regulatory
compliance and/or change its business practices. This could adversely affect Pioneer’s profitability.
There is a risk that such regulations could also make it uneconomic for Pioneer to continue to operate
in places that it currently does business.
Pioneer complies with the requirements of the Corporations Act and the ASX with respect to financial
and key management personnel remuneration reporting. Changes in legislation including Australian
Accounting Standards and / or their application to accounting policy may result in unanticipated
outcomes which could materially and adversely affect Pioneer’s business, financial condition, and
results of operations.
(k) Funding to purchase new debt portfolios
Pioneer’s business depends on its ability to purchase debt portfolios at appropriate prices and then
recover on the accounts in those portfolios.
Pioneer funds debt purchases by a combination of equity capital, debt and cash generated through
revenue from operations. The ability of Pioneer to obtain this funding is dependent on Pioneer’s
performance and prospects as well as other factors outside the control of Pioneer, including but not
limited to, general economic conditions and stock market conditions.
(l) Forward flow agreements
Pioneer purchases a significant amount of its debt portfolios under FFAs. The FFAs to which Pioneer is
a party typically contain:
• termination clauses that allow the FFA to be terminated by the vendor partner in certain limited
circumstances; and
• provisions which require Pioneer to “re-assign” particular accounts in specified circumstances.
As a result, Pioneer may be required to “re-assign” an account to a vendor partner on which it was
successfully recovering which could lead to a decrease in revenue and profitability.
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In a market of increased competition, Pioneer may be required to purchase debt portfolios at
increased prices or, alternatively, reduce the number of portfolios it acquires if Pioneer is unable to
fund a price increase at the then volume of purchase.
Pioneer generally contemplates future fluctuations in the value of the debt portfolios that it purchases
through FFAs, but the statistical models and analytical tools that Pioneer uses in its business to assess
and analyse debt portfolios may prove to be inaccurate. This could materially and adversely affect
Pioneer’s business, financial condition, and results of operations.
(m) Future acquisitions
Pioneer may selectively pursue acquisitions to complement its organic growth. However, there can be
no assurance that Pioneer will be able to identify suitable acquisition candidates at acceptable prices
or complete and integrate acquisitions successfully. The successful implementation of acquisitions will
depend on a range of factors. Even if successfully executed and integrated, there is no guarantee of
future performance of those acquisitions. In addition, Pioneer’s future acquisitions may subject
Pioneer to unanticipated risks or liabilities or disrupt operations and divert management’s attention
and resources from Pioneer’s day-to-day operations.
To the extent that acquisitions are not completed, are not successfully integrated with Pioneer’s
existing business, or do not perform in line with expectations, the financial performance of Pioneer
could be adversely impacted.
(n) Management of financial growth
The ability of Pioneer to achieve financial performance is dependent on a number of factors, not all of
which are within the control of Pioneer.
In the future, Pioneer may require additional capital, whether by equity or debt, to explore and/or
develop further business opportunities. There can be no assurance that Pioneer will be able to raise
such capital on favourable terms, if at all.
The inability to raise additional capital, if required, may have a detrimental impact on Pioneer’s
financial performance and the ability of Pioneer to expand its business.
(o) Dilution risk
The capital structure of the Company will be impacted by the number of Shares issued pursuant to
the Offer, as summarised in Section 3.1.
Future capital raisings and issues of securities by the Company may also dilute the percentage
ownership of the Company of existing Shareholders. Such capital raisings may be undertaken to
pursue further business opportunities or to repay part or all of the Company’s debt.
Shareholders’ percentage ownership of the Company will also be diluted upon the exercise by the
respective holders of the Company’s convertible securities that are currently on issue and that may
be issued in the future. This may include the Company’s Warrants, Options and Rights under the
Pioneer Equity Incentive Plan.
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(p) Increased competition
Pioneer faces competition from new and existing purchasers of debt portfolios. Pioneer’s current
competitors and any new competitors may have or may in the future develop substantially greater or
better financial, technical, personnel or other resources such as more effective pricing and collection
models, more efficient operating structures, greater adaptability to changing market needs and more
established relationships in the debt purchase industry.
Pioneer may be unable to compete with businesses that offer higher prices for debt portfolios and
other businesses may develop other competitive advantages that Pioneer cannot match. This may
reduce Pioneer’s access to, and success in, purchasing new debt portfolios.
There can be no guarantee that the structure of and competition within the market that Pioneer
competes in will not change in a manner adverse to the interests of Pioneer.
In addition, there can be no guarantee that Pioneer’s efforts to maintain or increase its market share
will be successful or that any new ventures proposed will be achieved.
(q) Access to and use of data
Pioneer relies on data provided by multiple credit reference agencies, servicing partners and other
sources. If any third-party sources were to stop providing this data for any reason, including a change
in laws or regulations, or if they were to considerably raise the price of their services, Pioneer’s
business could be materially and adversely affected.
If competitors are able to develop or procure similar or more effective systems or methods to develop
and process data, or if Pioneer becomes unable to continue to acquire, aggregate or use such
information and data in the manner or to the extent in which it is currently permitted, Pioneer may
lose a competitive advantage and Pioneer’s business, prospects, financial condition and results of
operations could be materially and adversely affected.
(r) Economic factors
General economic conditions, such as interest rates, inflation, household disposable income, taxation,
employment levels, consumer and business sentiment and market volatility may adversely impact
Pioneer’s activities, as well as its ability to fund those activities. There can be no guarantee that the
current economic environment and receivables management sector conditions will remain the same
and there is a risk that material adverse changes to general economic or industry conditions may have
a material adverse impact on the financial performance of Pioneer, as a consequence of reduced
customer or inability to service their obligations, leading to a loss of revenues. Changes in government
monetary and regulatory policies could also affect Pioneer’s business.
(s) Reputational risk
Pioneer’s failure to protect its reputation could have a material adverse effect on Pioneer including its
brand and profitability. Pioneer’s brand could be jeopardised if it fails to maintain quality services or
if Pioneer, or the third parties with whom it does business, fail to comply with regulations or accepted
business practices (including ethical, social, product, labour and environmental standards, or related
political considerations). If damage were to occur to Pioneer’s reputation, the demand for Pioneer’s
services may be reduced and/or Pioneer’s services may be boycotted. This will likely have an adverse
effect on revenue margins, profitability and Pioneer’s operations.
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(t) Litigation
Other than as set out in this Prospectus, Pioneer is not currently involved in any material litigation,
arbitration or proceedings. There is a risk that Pioneer may in the future have disputes with its
customers, other third parties (including payment disputes) or have adverse findings made against it
as a result of regulatory investigations and this may have an adverse impact on Pioneer’s growth
prospects, operating results and financial performance.
(u) Unforeseen expenses
Pioneer may be subject to significant unforeseen expenses or actions. This may include unplanned
operating expenses, future legal actions, or expenses in relation to future unforeseen events.
Pioneer expects that it will have adequate working capital to conduct its stated objectives however,
there is the risk that additional funds may be required to fund such unforeseen expenses and Pioneer’s
future objectives.
2. General risks
Most of the general risks discussed below are outside the control of Pioneer and the Board and cannot
be mitigated.
(a) Stock market volatility
The market price of the Shares and Options may rise or fall depending upon a range of factors beyond
Pioneer’s control and which are unrelated to Pioneer’s operational performance. The price of the
Shares listed on ASX may also be affected by a range of factors including Pioneer’s financial
performance and by changes in the business environment.
The Shares carry no guarantee in respect of profitability, dividends, return on capital, or the price at
which they may trade on the ASX.
There are a number of national and international market factors that may affect the price of the
Shares, including movements on international stock markets, economic conditions and general
economic outlook, interest rates and exchange rates, inflation rates, commodity supply and demand,
government taxation and royalties, legislation, monetary and other policy changes and general
investors’ perceptions. Neither Pioneer nor the Pioneer Directors have control over these factors.
(b) General economic conditions
The general economic climate may affect the performance of Pioneer. These factors include the
general level of international and domestic economic activity, inflation and interest rates. These
factors are beyond the control of Pioneer and the Pioneer Directors and their impact cannot be
predicted.
(c) Changes in laws and government policy
Changes in laws and government policies (including changes to Pioneer’s industry), both domestically
and internationally, may adversely affect the financial performance or the current and proposed
operations of Pioneer.
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(d) Insurance risks
Although Pioneer maintains insurance, no assurance can be given that adequate insurance will
continue to be available to Pioneer in the future on commercially acceptable terms.
(e) Government actions and other events
The impact of actions by domestic and international governments may affect Pioneer’s activities,
including in relation to its infrastructure, compliance with environmental regulations, export, taxation
and royalties.
Events may occur within or outside Australia that could impact on the world economy, the financial
services market, Pioneer’s operations and the price of the Shares. These events include war,
geopolitical incidents, acts of terrorism, civil disturbance, political intervention, pandemic and natural
disasters. Pioneer has only a limited ability to insure against some of these risks.
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
In July 2024 the following events occurred relating to employee share schemes provided:
Expiry Date
No. Shares
Value per share
Change
Exercise
Consideration
1 July 2024
280,000
$0.49
Vested
$nil
$nil
1 July 2024
135,000
$0.49
Settled in Cash
$nil
$nil
12 July 2024
274,241
$nil
Lapsed
$nil
$nil
On 26 July 2024, the Group completed Financial Close of a new four-year $272.5m syndicated senior
finance facility, replacing the $216.8m Senior Facility in place at 30 June 2024 (note 16). $21.5m of
Medium-Term Notes (MTNs) also being subject to re-finance and are contracted to complete before
30 September 2024. The Syndicated facility comprises of two cash advance facilities of $222.5m and
$50m respectively, both incurring interest at the Bank Bill Swap Rate (BBSW) plus 5.5%.
On 29 July 2024, 5,416,881 warrants were converted into fully paid ordinary shares at an issue price
of $0.48. On 8 August 2024, the group completed the issue of 100 fully paid ordinary shares at an issue
price of $0.48.
Environmental regulation
The Company is not affected by any significant environmental regulations.
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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 2024.
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 2024 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
Managing Director
Mr Peter Hall
Independent Non-Executive Director
Ms Suzan Pervan (commenced on 29 August 2023)
Independent Non-Executive Director
Ms Pauline Gately (commenced on 29 August 2023)
Independent Non-Executive Director
Ms Michelle d’Almeida (resigned on 29 August 2023)
Independent Non-Executive Director
Executives
Ms Susan Symmons
Company Secretary
Ms Andrea Hoskins
Chief Operating Officer
Mr Barry Hartnett
Chief Financial Officer
Mr Ian Brunette (resignation accepted on 23 February 2024)
Chief Information Officer
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.
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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 4 years;
b) Rights are issued for Nil consideration;
c) Performance rights convert to Ordinary Shares on a one-for-one basis;
d) Indeterminate rights may convert to Ordinary Shares on a one-for-one basis or, alternatively,
the Board may determine that a vested Right will be satisfied by a cash payment in lieu of
Ordinary Shares at the 5-day Volume Weighted Average Price (‘VWAP’) prior to each vesting
date; and
e) Conditions may include the executive being employed at the vesting date and a minimum
VWAP to be achieved before vesting occurs.
Performance
The following table shows the statutory performance indicators of the Group over the last five years.
2024
$’000
2023
$’000
2022
$’000
2021
$’000
2020
$’000
(Loss)/Profit for the year attributable to owners
of the Group
(10,039)
166
(33,094)
(19,655)
(40,084)
Basic (loss)/earnings per share (cents)
(8.66)
0.19
(40.48)
(30.43)
(63.36)
Dividend payments paid in financial year
-
-
-
-
-
Dividend payout ratio
N/A
N/A
N/A
N/A
N/A
Closing share price
$0.50
$0.31
$0.42
$0.50
$0.29
Increase/(Decrease) in share price
61.3%
(26.2%)
(17.0)%
75.4%
(89.4)%
Remuneration governance
The Board has a People, Remuneration and Nomination Committee (‘PRNC’). 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.
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.
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The Committee reviews its remuneration strategy at least annually to ensure that 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.
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 advisor is made in accordance with the ASX Corporate Governance Principles.
Voting and comments made at the company's 2023 Annual General Meeting ('AGM')
At the 2023 AGM, 97% of the votes received supported the adoption of the remuneration report for
the year ended 30 June 2023. The company did not receive any specific feedback at the AGM
regarding its remuneration practices.
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 hedging their exposure to any securities held in the Company.
Executive remuneration
The Board recognises that satisfying 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 which ensure executives are 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.
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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, 2020 and 2023 AGMs the Company refreshed
the Plan under ASX Listing Rule 7.2 (Exception 13).
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 and
rewarding skilled employees.
Long term incentive awards in place during the year
Details of Rights over ordinary shares in the Company that were granted as compensation to each key
management person during the reporting period are as follows:
Name
No of rights
Grant date
Expiry date
Fair value at grant date
Mr Keith John
2,807,766
31 October 2023
30 June 2026
$0.375
Ms Andrea Hoskins
1,622,986
31 October 2023
30 June 2026
$0.375
Mr Barry Hartnett
1,622,986
31 October 2023
30 June 2026
$0.375
Mr Ian Brunette1
589,378
31 October 2023
30 June 2026
$0.375
Ms Susan Symmons2
267,908
15 July 2024
30 June 2026
$0.550
1 Mr Ian Brunette commenced 3 July 2023 and his resignation was accepted effective 23 February 2024
2 A valid expectation was created with Ms Symmons in relation to this grant on 31 October 2023.
All awards made in FY24 have a $nil exercise price, a performance period from 31 October 2023 to 30
June 2025, and have been fair valued at the grant date using a Black-Scholes pricing model. No
dividends are paid and no voting rights issued to holders of performance and indeterminate rights.
Vesting of the above Rights are subject to employment at the vesting date and the achievement of
annual financial performance targets as set by the Board. For Rights where those annual financial
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performance targets have been met, final vesting is subject to the achievement of a final hurdle, being
a net profit after tax of at least $18m in FY26.
Long term incentive awards modified during the year
On 3 November 2023 the conditions of Performance rights granted (for members of the Executive and
leadership, excluding the Managing Director) on 23 September 2020 were modified. This modification
was to include a condition that the Rights were to be valued using volume-weighted average price,
resulting in an incremental fair value of $545,710 as calculated using a Black-Scholes pricing model,
recognised as a share-based expense over the remaining vesting period. The terms of the Rights have
been summarised below:
After modification
Before modification
Number of rights
2,050,000
2,050,000
Grant/Modification date
3 November 2023
23 September 2020
Expiry date
23 September 2024
23 September 2024
Share price at grant/modification date
$0.340
$0.285
Exercise price
$nil
$nil
Fair value - per right
$0.3400
$0.0738
Fair value – total
$697,000
$151,290
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.
Non-Executive Directors fees for FY24 were:
• Chairman Fee
$160,000 (plus Superannuation)
• Audit and Risk Management Committee Chair
$120,000 (plus Superannuation)
• Non-Executive Director
$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.
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Statutory remuneration disclosures
The following tables details KMP renumeration in accordance with applicable accounting standards
Statutory remuneration tables
Non-Executive Directors
Fixed remuneration1
Year
Cash salary
Non-monetary
benefits
Annual & long
service leave
Post-employment
benefits
Total
$
$
$
$
$
Mr Stephen Targett
2024
160,000
-
-
17,600
177,600
2023
127,692
-
-
13,408
141,100
Mr Peter Hall
2024
114,077
-
-
12,548
126,625
2023
106,692
-
-
11,203
117,895
Ms Suzan Pervan2
2024
86,308
-
-
9,494
95,802
2023
-
-
-
-
-
Ms Pauline Gately3
2024
92,862
-
-
9,176
102,038
2023
-
-
-
-
-
Ms Michelle d’Almeida4
2024
20,000
-
-
2,200
22,200
2023
100,000
-
-
10,500
110,500
Mr Michael Smith5
2024
-
-
-
-
-
2023
86,154
-
-
9,046
95,200
Ms Andrea Hall6
2024
-
-
-
-
-
2023
85,348
-
-
3,392
88,740
Total
2024
473,247
-
-
51,018
524,265
2023
505,886
-
-
47,549
553,435
1 No variable Remuneration was paid in FY24 or FY23.
2 Ms Suzan Pervan was appointed on 29 August 2023.
3 Ms Pauline Gately was appointed on 29 August 2023. Ms Pauline Gately is paid via a contracting arrangement through an invoice which
is GST inclusive. Payment to a director constitutes an employee relationship for the purposes of the superannuation guarantee,
superannuation is paid for Ms Pauline Gately on the invoice amount exclusive of GST.
4 Ms Michelle d’Almeida resigned on 29 August 2023.
5 Mr Michael Smith resigned on 31 December 2022.
6 Ms Andrea Hall resigned on 16 February 2023.
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Executive Director
Fixed Remuneration
Variable Remuneration
Total
Year
Cash
salary
Non-monetary
benefits
Annual &
long service
leave
Post-
employment
benefits
Options
Indeterminate
rights
$
$
$
$
$
$
$
Mr Keith John
2024
778,500
12,034
(48,463)
27,399
177,666
214,860
1,161,996
2023
778,500
11,718
18,303
25,292
426,400
37,099
1,297,312
Executive Key Management Personnel
Fixed Remuneration
Variable Remuneration
Total
Year
Cash
salary
Non-monetary
benefits
Annual &
long service
leave
Post-
employment
benefits
Options
Performance
rights
$
$
$
$
$
$
Ms Susan Symmons
2024
285,600
12,034
(33,381)
27,399
-
102,286
393,938
2023
280,000
11,718
7,736
25,292
-
24,243
348,989
Ms Andrea Hoskins
2024
450,000
12,034
(15,014)
27,399
-
238,738
713,157
2023
450,000
11,718
26,185
25,292
-
17,742
530,937
Mr Barry Hartnett
2024
450,000
12,034
(53,558)
27,399
-
432,373
868,248
2023
450,000
11,718
52,121
25,292
-
101,143
640,274
Mr Ian Brunette1
2024
226,470
7,748
-
20,549
-
-
254,767
2023
-
-
-
-
-
-
-
Mr Joseph Terribile2
2024
-
-
-
-
-
-
-
2023
320,000
77,254
12,009
25,292
-
-
434,555
Total
2024
2,190,570
55,884
(150,416)
130,145
177,666
988,257
3,392,106
2023
2,278,500
124,126
116,354
126,460
426,400
180,227
3,252,067
1 Mr Ian Brunette commenced 3 July 2023 and his resignation was accepted effective 23 February 2024
2 Mr Joseph Terribile’s resignation was accepted effective 30 June 2023
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Proportion of fixed and variable remuneration
The following table shows the proportion of remuneration that is fixed and that which is linked to
performance:
Fixed remuneration
At risk – STI
At risk – LTI
Executive Director
Mr Keith John
2024
66%
-
34%
Executive Key Management Personnel
Ms Susan Symmons
2024
74%
-
26%
Ms Andrea Hoskins
2024
67%
-
33%
Mr Barry Hartnett
2024
50%
-
50%
Mr Ian Brunette1
2024
100%
-
-
1 Mr Ian Brunette commenced 3 July 2023 and his resignation was accepted effective 23 February 2024.
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
Term of agreement and notice
period
Mr Keith John
Managing
Director
$778,500 p.a. plus
superannuation
Continuing agreement with 12
months’ notice by either party
Ms Susan
Symmons
Company
Secretary
$356,250 p.a. plus
superannuation pro-rata
on a 0.8 basis
Continuing agreement with 3
months’ notice by either party
Ms Andrea Hoskins Chief Operating
Officer
$450,000 p.a. plus
superannuation
Continuing agreement with 6
months’ notice by either party
Mr Barry Hartnett
Chief Financial
Officer
$450,000 p.a. plus
superannuation
Continuing agreement with 6
months’ notice by either party
Mr Ian Brunette1
Chief Information
Officer
$350,000 p.a. plus
superannuation
Continuing agreement with 3
months’ notice by either party
1 Mr Ian Brunette commenced 3 July 2023 and his resignation was accepted effective 23 February 2024.
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KMP Security holdings
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.
Rights
Name
Balance at
1 July 2023
Granted
Vested
Lapsed
Balance at
30 June 2024
Unvested
Executive Director
Mr Keith John
75,000
2,807,766
(75,000)
-
2,807,766
2,807,766
Key Management Personnel
Ms Susan Symmons
368,000
-
(18,000)
-
350,000
350,000
Mr Barry Hartnett
1,507,500
1,622,986
(67,500)
-
3,062,986
3,062,986
Ms Andrea Hoskins
600,000
1,622,986
-
-
2,222,986
2,222,986
Mr Ian Brunette1
-
589,378
-
(589,378)
-
-
Total
2,550,500
6,643,116
(160,500)
(589,378)
8,443,738
8,443,738
1
Mr Ian Brunette commenced 3 July 2023 and his resignation was accepted effective 23 February 2024.
The below assumptions were used to determine the fair value of Performance rights at each date
using a Black-Scholes pricing model using the grant date share price and historic share price volatility:
Grant date
31 October 2023
5 January 2024
15 July 20241
Expiry date
30 June 2026
30 June 2026
30 June 2026
Share price at grant date
$0.375
$0.415
$0.550
Exercise price
Nil
Nil
Nil
Expected volatility
60%
60%
60%
Dividend yield
Nil
Nil
Nil
Risk free rate
4.40%
3.77%
4.11%
Fair value at grant date
$0.375
$0.415
$0.550
1
Share-based expenses have been incurred for this grant in FY24 due to a valid expectation created on 31 October 2023.
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Listed Options
These options have an exercise price of $0.80 and expire on 31 March 2025.
Name
Balance at
1 July 2023
Issued
Other
Balance at
30 June 2024
Non-Executive Directors
Mr Stephen Targett
136,363
-
-
136,363
Ms Michelle d’Almeida1
36,363
-
(36,363)
-
Total
172,726
-
(36,363)
136,363
Executive Director
Mr Keith John
4,527,273
-
-
4,527,273
Total
4,527,273
-
-
4,527,273
Key Management Personnel
Ms Susan Symmons
36,363
-
-
36,363
Mr Barry Hartnett
454,545
-
-
454,545
Ms Andrea Hoskins
272,727
-
-
272,727
Total
763,635
-
-
763,635
Total
5,463,634
-
(36,363)
5,427,271
1
Ms Michelle d’Almeida resigned on 29 August 2023.
Share Purchase Facility
250,000 Ordinary Shares remain from the shares issued to executives (excluding the Managing
Director) under a share purchase facility on 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 will be applied in full against the facility,
e) The facility is not recognised as a loan as the Company only has recourse to the value of the
Shares.
Balance at
1 July 2023
Granted as
compensation
Repaid during
the year
Balance at
30 June 2024
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.
On 13 November 2023, a loan was issued to the Managing Director for $1.5m.
All loans are on a full recourse basis with interest payable monthly at rates of 5% (May 2022 loans) and
7.6% (November 2023 loan) per annum. Both loans are secured by the underlying shares. The
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Company engaged external advisors to confirm that each loan transaction was of an arm’s length
nature and no employee benefits have been recognised in relation to the loans or share transaction.
Name
Balance at
1 July 2023
Loans
issued
Interest accrued
for the year
Interest paid
for the year
Balance at
30 June 2024
$
$
$
$
$
Mr Keith John
1,500,000
1,500,000
146,810
(146,810)
3,000,000
Mr Barry Hartnett
250,000
-
12,500
(12,500)
250,000
Ms Andrea Hoskins
150,000
-
7,500
(7,500)
150,000
Total
1,900,000
1,500,000
166,810
(166,810)
3,400,000
Unlisted Options
On 19 November 2020, Mr Keith John was issued with 8,000,000 Options and on 20 November 2023
5,000,000 Options were exercised at a price of $0.30 per option, for a total consideration of $1.50m.
The remaining 3,000,000 options granted in FY21 lapsed as the conditions for their exercise were not
met. No options were granted in FY24.
Balance at
1 July 2023
Granted
Exercised
Lapsed
Balance at
30 June 2024
Managing Director – Keith John
Units
8,000,000
-
(5,000,000)
(3,000,000)
-
Value per unit
$0.451
-
$0.352
$0.431
-
Value
-
$1,750,000
$1,279,200
-
1 Fair value at grant date in line with AASB2
2
Fair value on exercise date
The total remuneration expense for Mr Keith John in respect of the above options was $177,666,
representing 15.3% of total remuneration for the year.
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Shareholdings
Name
Balance at
1 July 2023
Changes during
the year
Balance at
30 June 2024
Non-Executive Directors
Mr Stephen Targett
136,363
75,000
211,363
Mr Peter Hall
225,000
-
225,000
Ms Michelle d’Almeida1
36,363
(36,363)
-
Ms Suzan Pervan
-
-
-
Ms Pauline Gately
-
-
-
Total
397,726
38,637
436,363
Executive Director
Mr Keith John
12,272,934
5,025,000
17,297,934
Total
12,272,934
5,025,000
17,297,934
Executive Key Management Personnel
Ms Susan Symmons
513,404
18,000
531,404
Mr Barry Hartnett
933,370
67,500
1,000,870
Ms Andrea Hoskins
397,727
-
397,727
Total
1,844,501
85,500
1,930,001
Total
14,515,161
5,149,137
19,664,298
1 Ms Michelle d’Almeida resigned on 29 August 2023.
Other transactions with KMP and Directors
During the year, entities related to Mr Stephen Targett (Chairman) acquired on the open market 80,000
Medium Term Notes (‘MTNs’) of Pioneer Credit Limited at an average unit cost of $92.0149. The terms
and conditions were identical to the remainder of the 55,500,000 Pioneer Credit Limited MTNs in issue.
END OF REMUNERATION REPORT
Shares issued on exercise of equity instruments
Ordinary shares were issued during the year ended 30 June 2024 and up to the date of this report on
exercise of the following instruments:
Instrument
Exercise price
Number of shares issued
Options – unlisted
$0.30
5,000,000
Warrants – listed (expiring 25 September 2024)
$nil
5,433,548
Indeterminate rights
$nil
75,000
Performance rights
$nil
451,000
Total
10,959,548
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Shares under option
Unissued ordinary shares pending exercise at the date of this report are as follows:
Instrument
Exercise price
Maximum shares converted
Options – listed (expiring 31 March 2025)
$0.80
29,361,726
Warrants – listed (expiring 25 September 2024)
$nil
133,260
Indeterminate rights
$nil
2,807,766
Performance rights
$nil
8,901,259
Total
41,204,011
All unissued shares are convertible on a one for one basis. No person entitled to exercise options had
or has any right by virtue of the option to participate in any share issue of the company or of any other
body corporate. Further details about share-based payments to directors and KMP are included in the
remuneration report.
Indemnity and 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.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify
the auditor of the company or any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the
auditor of the company or any related entity.
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.
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 2024, RSM did not provide the group any non-audit services.
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A copy of the Auditor’s Independence Declaration under section 307C of the Corporations Act 2001 is
on page 44.
Rounding of amounts
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian
Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been
rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in
certain cases, the nearest dollar.
Auditor’s independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations
Act 2001 is set out immediately after this directors' report.
Auditor
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the directors
Stephen Targett
Chairman
Perth
30 August 2024
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
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
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 2024, 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
Perth, WA
MATTHEW BEEVERS
Dated: 30 August 2024
Partner
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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 28 June 2024 and reflects the corporate governance
practices in place throughout the 2024 financial year and was approved by the Board on 29 August
2024. 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
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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.
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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 Risk Manager 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).
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Pioneer Credit Limited ABN 44 103 003 505
Annual Report
For the year ended 30 June 2024
Financial Statements
Contents
Consolidated statement of financial position
51
Consolidated statement of profit or loss and other comprehensive income
52
Consolidated statement of changes in equity
53
Consolidated statement of cash flows
54
Notes to the consolidated financial statements
55
Consolidated entity disclosure statement
97
Directors’ declaration
98
Independent auditor’s report
99
Shareholder information
105
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Consolidated statement of financial position
2024
2023
Note
$’000
$’000
ASSETS
Current assets
Cash and cash equivalents
8
4,149
8,410
Trade and other receivables
9
4,331
1,490
Other current assets
10
1,496
693
Current tax asset
3
3
Purchased debt portfolio
11
114,058
106,096
Total current assets
124,037
116,692
Non-current assets
Property, plant and equipment
12
524
681
Intangible assets
12
786
489
Right of use assets
13
6,420
7,419
Other non-current assets
10
5,924
3,286
Deferred tax assets
25
21,367
-
Purchased debt portfolio
11
208,878
198,187
Total non-current assets
243,899
210,062
Total assets
367,936
326,754
LIABILITIES
Current liabilities
Trade and other payables and liabilities
14
25,656
6,145
Provisions
15
2,234
2,082
Lease liabilities
13
1,277
1,116
Borrowings
16
254,270
11,335
Total current liabilities
283,437
20,678
Non-current liabilities
Provisions
15
1,047
872
Lease liabilities
13
6,911
8,153
Borrowings
16
32,347
255,119
Total non-current liabilities
40,305
264,144
Total liabilities
323,742
284,822
Net assets
44,194
41,932
EQUITY
Contributed equity
19
117,664
103,755
Reserves
19
7,178
10,065
Accumulated losses
(80,648)
(71,888)
Capital and reserves attributable to owners of Pioneer Credit Ltd
44,194
41,932
Total equity
44,194
41,932
The consolidated statement of financial position should be read in conjunction with the accompanying notes.
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Consolidated statement of profit or loss and other comprehensive income
2024
2023
Continuing operations
Note
$’000
$’000
Interest income at amortised cost
11
83,576
73,709
Net impairment (loss)/gain on PDPs
11
(17,839)
3,767
Other income
20
5,343
5,261
71,080
82,737
Employee expenses
21
(36,184)
(34,365)
Finance expenses
22
(43,627)
(33,839)
Direct liquidation expenses
(4,187)
(3,572)
Information technology and communications
(4,171)
(3,456)
Depreciation and amortisation
12,13
(1,834)
(2,229)
Consultancy and professional fees
23
(9,005)
(1,741)
Other expenses
24
(3,473)
(3,365)
(Loss)/Profit before income tax
(31,401)
170
Income tax benefit/(expense)
25
21,362
(4)
(Loss)/Profit after income tax expense for the year
(10,039)
166
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
(210)
41
Other comprehensive income for the year, net of tax
(210)
41
Total comprehensive (loss)/profit for the year
(10,249)
207
Total comprehensive (loss)/income for the year is attributable to:
Owners of Pioneer Credit Limited
(10,249)
207
(Loss)/Earnings per share
Basic (cents per share)
27
(8.66)
0.19
Diluted (cents per share)
27
(8.66)
0.17
The consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
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Consolidated statement of changes in equity
Contributed
Equity
Share
Based
Payment
Reserve
Other
Reserves
Retained
Earnings
Total
Equity
Note
$’000
$’000
$’000
$’000
$’000
Balance at 1 July 2022
103,589
7,015
2,530
(72,054)
41,080
Profit after income tax for the year
-
-
-
166
166
Other comprehensive income for the
year net of tax
-
-
41
-
41
Transactions with owners in their capacity as owners:
Treasury share acquired
19
(84)
-
-
-
(84)
Share based payments
26
-
729
-
-
729
Issue of treasury shares to
employees
19
250
(250)
-
-
-
166
479
-
-
645
Balance at 30 June 2023
19
103,755
7,494
2,571
(71,888)
41,932
Balance at 1 July 2023
103,755
7,494
2,571
(71,888)
41,932
Loss after income tax for the year
-
-
-
(10,039)
(10,039)
Other comprehensive income for the
year net of tax
-
-
(210)
-
(210)
Transactions with owners in their capacity as owners:
Issue of shares
19
9,462
-
-
-
9,462
Share based payments
26
-
1,549
-
-
1,549
Exercise of options
19
3,825
(2,325)
-
-
1,500
Share plan shares vested
19
609
(609)
-
-
-
Share plan shares lapsed
19
-
(1,279)
-
1,279
-
Warrants converted
19
13
-
(13)
-
-
13,909
(2,664)
(13)
1,279
12,511
Balance at 30 June 2024
117,664
4,830
2,348
(80,648)
44,194
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Consolidated statement of cash flows
2024
2023
Note
$’000
$’000
Cash flows from operating activities
Receipts from liquidations of PDPs and services (inclusive of GST)
11
138,638
138,840
Payments to suppliers and employees (inclusive of GST)
(50,976)
(47,387)
Interest received
410
182
Interest paid
(37,301)
(30,047)
Income taxes paid
(5)
(5)
Cash flows from operating activities before changes in operating assets
50,767
61,583
Acquisitions of PDPs
11
(79,598)
(81,546)
Net cash outflow used in operating activities
8
(28,832)
(19,963)
Cash flows from investing activities
Payments for property, plant and equipment
(77)
(256)
Payments for intangible assets
(630)
(222)
Net cash outflow used in investing activities
(707)
(478)
Cash flows from financing activities
Proceeds from borrowings
29,750
21,393
Repayment of borrowings
(12,223)
(14,003)
Proceeds from issue of ordinary shares net of issue costs
9,462
-
Lease payments
(1,711)
(1,610)
Net cash flow from financing activities
25,278
5,780
Net decrease in cash and cash equivalents
(4,261)
(14,661)
Cash and cash equivalents at the beginning of the financial year
8
8,410
23,071
Cash and cash equivalents at the end of the financial year
8
4,149
8,410
The consolidated statement of cash flows should be read in conjunction with the accompanying notes.
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Notes to the consolidated financial statements
1.
Reporting entity ......................................................................................................................................... 56
2.
Basis of preparation................................................................................................................................... 56
3.
Going Concern ........................................................................................................................................... 56
4.
Significant events occurring in the current reporting period ................................................................. 58
5.
Material accounting policy information ................................................................................................... 58
6.
Financial risk management ....................................................................................................................... 66
7.
Segment information................................................................................................................................. 69
8. Cash and Cash Equivalents ........................................................................................................................ 69
9.
Trade and Other Receivables .................................................................................................................... 70
10.
Other Assets ............................................................................................................................................... 71
11.
Purchased Debt Portfolios......................................................................................................................... 71
12.
Property, Plant and Equipment and Intangible Assets ............................................................................ 73
13.
Leased Assets ............................................................................................................................................. 75
14.
Trade and Other Payables and Other Liabilities ...................................................................................... 76
15.
Provisions ................................................................................................................................................... 76
16.
Borrowings ................................................................................................................................................. 77
17.
Commitments ............................................................................................................................................ 79
18.
Financial Instruments ................................................................................................................................ 80
19.
Equity .......................................................................................................................................................... 81
20.
Other Income ............................................................................................................................................. 83
21.
Employee Expenses ................................................................................................................................... 83
22.
Finance Expenses....................................................................................................................................... 84
23.
Consultancy and Professional Fees .......................................................................................................... 84
24.
Other Expenses .......................................................................................................................................... 84
25.
Income Tax ................................................................................................................................................. 84
26.
Share Based Payments .............................................................................................................................. 86
27.
(Loss) / Earnings Per Share ........................................................................................................................ 88
28.
Events Taking Place After the Reporting Period ...................................................................................... 90
29.
Capital Management ................................................................................................................................. 90
30.
Group Structure ......................................................................................................................................... 91
31.
Parent Entity Financial Information .......................................................................................................... 92
32.
Deed of Cross Guarantee .......................................................................................................................... 92
33.
Related Party Transactions ........................................................................................................................ 95
34.
Remuneration of auditors ......................................................................................................................... 96
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1.
Reporting entity
The Consolidated Financial Statements for the financial year ended 30 June 2024 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 29
August 2024.
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.
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
notes:
Note 11 (p.69) - Purchased debt portfolios (‘PDP’s’)
Note 13 (p.73) – Leased Assets
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Note 25 (p.84) – Deferred tax assets
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, convincing other evidence, 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.
g)
Adoption of new and revised Accounting Standards
The consolidated entity has adopted all of the new or amended Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for
the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted.
h)
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory
for 30 June 2024 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.
For the year ended 30 June 2024, the Group incurred a net loss after tax of $10.0m (2023: $0.2m profit)
and as at year end has net current liabilities of $159.4m (2023: $96.0m net current assets).
Current liabilities at year end include $235.0 million relating to the Group’s borrowing which have been
classified as current in connection with the Group’s refinancing. The Group provided an irrevocable
prepayment notice to Fortress on 28 June 2024 in relation to the Senior Debt Facility ($213.5m), with
a further $21.5m of Medium-Term Notes (MTNs) also being subject to re-finance. Financial close of
the Group’s new Senior Debt Facility (Syndicated Facility) occurred on 26 July 2024 and the refinance
of the MTNs are contracted to complete before 30 September 2024.
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
twelve months from the date of issue of the financial statements, including satisfying financial
covenants and other compliance obligations relating to its Syndicated Facility and MTNs.
The key assumptions that have been used to derive the detailed cashflow forecast include:
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•
Ongoing PDP acquisitions funded from a combination of the senior debt facility and free cash;
•
Continued PDP cash collections;
•
Reduced finance costs arising from the Group’s new Syndicated Facility;
•
Portfolio sales, in line with the Company’s capital management strategy;
•
Remediation programs from various partner vendors;
•
Operational FTE recruitment; and,
•
Expense management
The Syndicated Facility, MTNs and Other loans 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.
The going concern forecast includes assumptions relating to recoverability of ongoing remediation
programs from a vendor partner. In the event this does not eventuate to the extent forecasted, the
Group anticipates these would not have an adverse impact on the going concern assumptions. The
Group has the levers available as mentioned above.
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
In June 2024, the Group provided irrevocable notice to Fortress Investment Group (‘Fortress’), with a
new Senior Facility Agreement, arranged by Nomura Australia Ltd. which settled on 26 July 2024. The
Company also completed the exchange offer on its MTNs on 28 June 2024.
In December 2023, the group entered a securitised arrangement with Nomura Singapore Limited. The
purpose of this facility was to acquire two inventory portfolios through an amortising facility.
5.
Material accounting policy information
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 2024. 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
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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.
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 equivalent
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.
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.
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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
2024 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 2024 of $322.9m would change by $15.1m in a downside
scenario and $15.0m 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.
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.
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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. Depreciation for each asset is recorded within the following ranges:
•
Plant and equipment
15% - 50%
•
Furniture, fittings, and equipment
11% - 50%
•
Leasehold improvements
11% - 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
•
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.
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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.
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
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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
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.
n)
Contributed equity
Ordinary shares issued are classified as equity
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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:
a) The after income tax effect of interest and other financing costs associated with dilutive
potential Ordinary shares; and
b) 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.
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 its
recoverable amount.
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
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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.
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.
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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.
The following table lists financial assets and liabilities, interest rate type and carrying value.
Interest rate
2024
2023
$’000
$’000
Financial assets
Cash and cash equivalents
Variable
4,149
8,410
Trade and other receivables
None
4,331
1,490
Purchased Debt Portfolios
Fixed
322,936
304,283
Financial liabilities
Trade and other payables
None
25,656
6,145
Borrowings – before transaction costs:
Senior financier
Variable
214,631
208,893
Medium term notes
Variable
53,181
53,345
Other loans
Fixed
18,805
352
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
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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.
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.
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.
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Within 1 year
Between 1
and 2 years
Between 2
and 5 years
Carrying
amount
$’000
$’000
$’000
$’000
At 30 June 2024
Trade and other payables
25,656
-
-
25,656
Borrowings
254,270
755
31,592
286,617
279,926
755
31,592
312,273
At 30 June 2023
Trade and other payables
6,145
-
-
6,145
Borrowings
11,335
9,051
246,068
266,454
17,480
9,051
246,068
272,599
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 2024 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.
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.
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Trade and other receivables
2024
2023
$’000
$’000
Loss allowance at 1 July
31
98
Increase/(Decrease) in provision for loss allowance
83
(67)
Loss allowance at 30 June
114
31
The Group recognises a lifetime expected credit loss for trade receivables. The expected credit loss on
these financial assets are estimated using a provision matrix based on the Group’s historical credit loss
experience, adjusted for factors that are specific to the debtors, general economic conditions, and an
assessment of both the current as well as the forecast direction of conditions at the reporting date,
including the time value of money where appropriate.
To measure the expected credit losses, trade receivables have been grouped based on shared credit
risk characteristics and days past due. Grid 1 contains those receivables that have a positive repayment
history, made up of government funded agencies, listed financial institutions and other listed public
entities. Grid 2 contains all other receivables made up of SME businesses, individuals, and other
unlisted financial service providers.
Days past due
0-30
31-60
61-90
91-120
121-150
150+
Total
Expected Credit Loss Rates
Grid 1
4.7%
6.1%
11.1%
17.5%
19.3%
21.6%
Grid 2
8.5%
9.5%
9.7%
9.9%
10.0%
57.7%
Gross Carrying Amounts ($’000)
Grid 1
665
-
-
-
-
82
747
Grid 2
201
177
-
86
60
28
552
Lifetime expected loss
49
17
-
8
6
34
114
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.
Cash and Cash Equivalents
a)
Cash and cash equivalents
2024
2023
$’000
$’000
Cash at bank
4,149
8,410
4,149
8,410
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b)
Reconciliation of profit after income tax to net cash inflow from operating activities
2024
2023
$’000
$’000
(Loss)/Profit for the period
(10,039)
166
Non-cash items in profit or loss:
Other non-cash expenses
(22)
(93)
Lease liability interest accrual
611
669
Expected credit losses
83
(66)
Non-cash employee benefits expense
1,629
842
(Gain)/Loss on modification of borrowings
2,241
-
Income tax (benefit)/expense
(21,362)
4
Depreciation and amortisation
1,834
2,229
Interest and transaction costs
3,063
2,546
Embedded derivative
189
-
(Increase)/Decrease in assets:
Trade and other receivables
(2,841)
4,750
PDPs
(18,653)
(8,767)
Other assets
(1,941)
502
Increase/(Decrease) in liabilities:
Trade and other payables and liabilities
16,096
(22,397)
Interest payable
190
(336)
Provisions
90
(12)
Net cash flow outflow used in operating activities before changes in
operating assets
(28,832)
(19,963)
c)
Non-cash investing and financing activities
2024
2023
$’000
$’000
Issue of KMP Loans
(1,500)
-
(1,500)
-
9.
Trade and Other Receivables
2024
2023
$’000
$’000
Trade receivables
1,619
468
Other receivables
2,712
1,022
4,331
1,490
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10.
Other Assets
2024
2023
$’000
$’000
Current
Prepayments
1,496
693
1,496
693
Non-current
Cash backed rental guarantee
1,506
1,386
Debt service reserve account
1,018
-
Loans to management1
3,400
1,900
5,924
3,286
1 All loans are issued on a full recourse basis and have been assessed as recoverable from the counterparty in the event of a fall in the
share price of the company.
11.
Purchased Debt Portfolios
2024
2023
$’000
$’000
Current
114,058
106,096
Non-current
208,878
198,187
322,936
304,283
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:
2024
2023
$’000
$’000
Balance at 1 July
304,283
295,516
Debt portfolios acquired
88,979
59,249
Cash collections of PDPs
(136,063)
(127,958)
Interest income accrued
83,576
73,709
Net impairment (loss)/gain
(17,839)
3,767
Balance at 30 June
322,936
304,283
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
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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.
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12.
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
Balance at 1 July 2022
604
43
157
804
Additions
164
-
85
249
Depreciation charge
(254)
(11)
(107)
(372)
Balance at 30 June 2023
514
32
135
681
Cost
2,075
641
2,196
4,912
Accumulated depreciation
(1,561)
(609)
(2,061)
(4,231)
Net book amount
514
32
135
681
Balance at 1 July 2023
514
32
135
681
Additions
60
-
48
108
Depreciation charge
(189)
(6)
(70)
(265)
Balance at 30 June 2024
385
26
113
524
Cost
2,135
641
2,244
5,020
Accumulated depreciation
(1,750)
(615)
(2,131)
(4,496)
Net book amount
385
26
113
524
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b)
Intangible assets
Software and licenses
$’000
Balance at 1 July 2022
958
Additions
180
Amortisation
(649)
Balance at 30 June 2023
489
Cost
3,076
Accumulated amortisation and impairment
(2,587)
Net book amount
489
Balance at 1 July 2023
489
Additions
629
Amortisation
(332)
Balance at 30 June 2024
786
Cost
3,706
Accumulated amortisation and impairment
(2,920)
Net book amount
786
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
•
IT development and software
3-5 years
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
For the year ended 30 June 2024, the Group conducted an impairment review in accordance with AASB
136 "Impairment of Assets." The assessment was carried out to determine whether any impairment
indicators existed for its assets.
The Company has determined that there were no indicators of impairment for any of its assets during
the reporting period. The assessment was based on a review of relevant internal and external factors,
including but not limited to:
•
Internal Factors: No significant declines in the performance of assets, changes in the use of
assets, or evidence of obsolescence.
•
External Factors: No adverse changes in market conditions, economic environment, or
regulatory requirements that would affect the recoverable amount of the assets.
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As a result of the assessment, the carrying amounts of the Company’s non-financial assets remain
unchanged. The Company will continue to monitor and review the carrying amounts of its assets for
any indications of impairment.
13.
Leased Assets
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
Balance at 1 July 2022
8,446
Revaluation of lease asset on modification
179
Depreciation
(1,206)
Balance at 30 June 2023
7,419
Balance at 1 July 2023
7,419
Revaluation of lease asset on modification
237
Depreciation
(1,236)
Balance at 30 June 2024
6,420
b)
Lease liabilities
2024
2023
$’000
$’000
Current lease liability
1,277
1,116
Non-current lease liability
6,911
8,153
8,188
9,269
c)
Maturity analysis - undiscounted
$’000
Lease commitments at 30 June 2024
Within one year
1,804
Later than one year but no later than five years
7,926
Later than 5 years
-
9,730
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
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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.
14.
Trade and Other Payables and Other Liabilities
2024
2023
$’000
$’000
Trade and other payables
3,761
1,058
PDPs payable
11,566
2,082
Other liabilities
10,328
3,005
25,656
6,145
15.
Provisions
2024
2023
$’000
$’000
Current
Provision for long service leave
692
583
Provision for annual leave
1,476
1,426
Share based payments
66
73
2,234
2,082
Non-current
Lease make good
664
396
Provision for long service leave
383
434
Share based payments
-
42
1,047
872
Lease make good
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.
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16.
Borrowings
In June 2024, the Group provided irrevocable notice to Fortress Investment Group (‘Fortress’), with a
new Senior Facility Agreement, arranged by Nomura Australia Ltd. Most of the borrowings are
presented as current in the financial statements, as the settlement scheduled and settled on 26 July
2024. The Company also completed the exchange offer on it MTN on 28 June 2024.
2024
2023
Current
Non-current
Total
Current
Non-current
Total
$’000
$’000
$’000
$’000
$’000
$’000
Senior debt facilities
213,453
-
213,453
9,051
200,950
210,001
Medium term notes
21,467
31,592
53,059
-
54,169
54,169
Interest payable
1,460
-
1,460
1,932
-
1,932
Other loans
17,890
755
18,645
352
-
352
254,270
32,347
286,617
11,335
255,119
266,454
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 – Fortress 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.
The property of Fortress Security comprises the Group’s assets of $287,498,439 as at 30 June 2024 (30
June 2023: $326,754,000).
Secured liabilities and assets pledged as security – Nomura Security
In December 2023, the group entered into a securitised arrangement with Nomura Singapore Limited.
The purpose of this facility was to acquire two inventory portfolios through an amortising facility.
Security has been pledged over all the assets and undertakings of each of Pioneer Credit (Fund 1) Pty
Ltd with the financier being Nomura Singapore Limited (‘Nomura’).
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The property of Nomura Security comprises the Group’s assets of $35,437,325 as at 30 June 2024 (30
June 2023: $nil)
The Group has complied with the financial covenants of its borrowing facilities during all periods
reported.
Financing arrangements
a)
Senior Facility - Fortress
The Group has access to a Senior Facility of $213.4m at 30 June 2024 (2023: $215.2m) comprised of a
$125m term facility, $75m as a revolving facility and a $13.4m delayed draw term loan facility.
The senior facility was fully drawn as at 30 June 2024 (2023: $5.3m). The Senior Facility maturity date
is 5 November 2025.
This facility was extinguished on 26 July 2024 as the group refinanced the senior debt facility with
Fortress Group.
b)
Senior Debt Facilities – Nomura (Other loans)
During the year ended 30 June 2024 Pioneer Credit (Fund 1) Pty Ltd, a wholly owned subsidiary of
Pioneer Credit Limited was advanced a facility from Nomura totalling $24.5m. The purpose of this was
to facilitate an acquisition of PDPs in this entity.
Key terms of the loan
•
Facility Commitment Amount fully drawn as at 30 June 2024 of 24.5m;
•
A$24.5m Initial term of two years expiring December 2025;
•
The Facility has a first ranking charge over the assets of the Special Purpose Vehicle (‘SPV’),
Pioneer Credit (Fund 1) Pty Limited; and
•
Fixed interest rate plus BBSY (minimum 2.0%). The interest rate is set at 6.5%.
•
The default rate is an additional margin of 3.0% p.a. over the applicable interest rate;
•
Upfront fee of 1% (plus GST) of commitment total;
•
Commitment fee of 3.0% per annum (not applicable to the growth facility until first
drawdown);
•
The financial covenant, specific to the SPV, to be tested quarterly:
-
Loan Book Value Ratio below 85% for the first 12 months and 75% thereafter
c)
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 an embedded derivative in respect of the early redemption call option 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:
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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 occur prior to 1 November 2024, with a separate
derivative valued at $0.19m recognised at 30 June 2024 (2023: $nil).
On 28 June 2024, the Group renegotiated the terms of the notes and entered into an arrangement
that settled on 3 July 2024 with the following terms:
•
Extended the terms of $33m of notes
•
$21m of new notes were issued
•
$21m of old notes to be redeemed in August 2024 and September 2024, respectively.
Changes in liabilities arising from the financing activities
$’000
$’000
$’000
$’000
Balance at
1 July 2022
Cash flow
Other non-
cash flow1
Balance at
30 June 2023
Borrowings
256,661
7,390
2,403
266,454
Lease liabilities
10,051
(1,610)
828
9,269
266,712
5,780
3,231
275,723
$’000
$’000
$’000
$’000
Balance at
1 July 2023
Cash flow
Other non-
cash flow1
Balance at
30 June 2024
Borrowings
266,454
17,527
2,636
286,617
Lease liabilities
9,269
(1,692)
611
8,188
275,723
15,835
3,247
294,805
1Other Non-cash flow items include the effective interest charge determined in accordance with AASB 9.
17.
Commitments
The Group has multiple service contracts at 30 June 2024 that include spending commitments. These
include an IT contract ending November 2025, services contracts for the operation of its Philippines
facility that ends in February 2026, and a CRM contract ending June 2028. The minimum contractual
commitments resulting from these agreements are outlined below.
Redemption Date
Redemption Amount
From 1 November 2022 to 31 October 2023
103 per cent
From 1 November 2023 to 31 October 2025
102 per cent
From 1 November 2024 to 31 October 2025
101 per cent
From and any time after 1 November 2025
100 per cent
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2024
2023
$’000
$’000
Within one year
2,018
2,955
Later than one year but not later than five years
2,557
4,012
4,575
6,967
18.
Financial Instruments
The Group has the following financial instruments
As at 30 June 2024
Measurement
Current
Non-current
Total
$’000
$’000
$’000
Financial assets
Cash and cash equivalents
Amortised cost
4,149
-
4,149
Trade and other receivables
Amortised cost
4,331
-
4,331
Purchased Debt Portfolios
Amortised cost
114,058
208,878
322,936
Other assets
Amortised cost
1,496
5,924
7,420
124,034
214,802
338,836
Financial liabilities
Trade and other payables
Amortised cost
25,656
-
25,656
Borrowings
Amortised cost
254,270
32,347
286,617
279,926
32,347
312,273
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
As at 30 June 2023
Measurement
Current
Non-current
Total
$’000
$’000
$’000
Financial assets
Cash and cash equivalents
Amortised cost
8,410
-
8,410
Trade and other receivables
Amortised cost
1,490
-
1,490
Purchased Debt Portfolios
Amortised cost
106,096
198,187
304,283
Other assets
Amortised cost
693
3,286
3,979
116,689
201,473
318,162
Financial liabilities
Trade and other payables
Amortised cost
6,145
-
6,145
Borrowings
Amortised cost
11,335
255,119
266,454
17,480
255,119
272,599
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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
19.
Equity
Contributed equity
2024
2023
Shares
$’000
Shares
$’000
Ordinary shares – fully paid excl. treasury shares
134,272,097
117,664
106,787,206
103,755
Share capital Movement
2023
Shares
$’000
Opening balance 1 July 2022
106,592,433
103,589
Treasury shares acquired
(272,727)
(84)
Treasury shares issued to employees
467,500
250
Warrants converted
-
-
Issue of shares
-
-
Closing balance 30 June 2023
106,787,206
103,755
2024
Shares
$’000
Opening balance 1 July 2023
106,787,206
103,755
Exercise of options
5,000,000
3,825
Vesting of shares
246,000
609
Warrants converted
16,667
13
Issue of shares
22,222,224
9,462
Closing balance 30 June 2024
134,272,097
117,664
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.
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Treasury shares
2023
Shares
$’000
Opening balance 1 July 2022
5,351,660
4,098
Treasury shares issued to employees
(467,500)
(250)
Treasury shares acquired during the period
272,727
84
Closing balance 30 June 2023
5,156,887
3,932
2024
Shares
$’000
Opening balance 1 July 2023
5,156,887
3,932
Treasury shares issued to employees
(5,246,000)
(2,635)
Treasury shares acquired during the period
500,000
150
Closing balance 30 June 2024
410,887
1,447
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.
Options
On 20 November 2023 5,000,000 unlisted options previously issued to the Managing Director were
exercised. 3,000,000 options lapsed on the same date after conditions for the exercise of the Options
were not satisfied.
As part of the Company’s equity placement completed on 18 May 2022, 29,361,726 listed options were
issued. These options have an exercise price of $0.80 and expire on 31 March 2025. At 30 June 2024,
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.
2024
2023
$’000
$’000
At 1 July
7,494
7,015
Share based payments and executive share plan
1,549
767
Transfer from reserve
(1,279)
(38)
Options exercised
(2,325)
-
Performance rights issued (refer to note 26)
(609)
(250)
At 30 June
4,830
7,494
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Warrant reserve
The following table shows a breakdown of Warrant Reserve and the movements in this reserve during
the reporting period.
2024
2023
Number
$’000
Number
$’000
At 1 July
5,566,808
2,689
5,566,808
2,689
Warrants issued
-
-
-
-
Warrants converted
(16,667)
(13)
-
-
At 30 June
5,550,141
2,676
5,566,808
2,689
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.
2024
2023
$’000
$’000
At 1 July
(118)
(159)
Foreign currency translation
(210)
41
At 30 June
(328)
(118)
20.
Other Income
2024
2023
$’000
$’000
Fees for services
391
772
Interest Income
414
186
Other1
4,538
4,303
5,343
5,261
1Other income is predominantly remediation payments made by Pioneers vendors across multiple products, tranches and vintages (year of
PDP investment).
21.
Employee Expenses
2024
2023
$’000
$’000
Wages and salaries
28,354
28,676
Superannuation
2,719
2,532
Change in liabilities for employee benefits
82
60
Share based payment transactions (note 26)
1,549
729
Other associated personnel expenses
3,480
2,368
36,184
34,365
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84
22.
Finance Expenses
2024
2023
$’000
$’000
Bank fees and borrowing expenses
3,283
577
Loss on modification of borrowings
2,241
-
Interest and finance charges paid/payable for financial liabilities not at FV
37,492
32,593
Lease liability
611
669
43,627
33,839
23.
Consultancy and Professional Fees
2024
2023
$’000
$’000
Consulting fees
8,000
949
Accounting fees
603
379
Legal fees
402
413
9,005
1,741
24.
Other Expenses
2024
2023
$’000
$’000
Occupancy costs
924
970
Administration expenses
1,857
2,012
Other
609
449
Increase/(Decrease) in provision for loss allowance (note 6)
83
(66)
3,473
3,365
25.
Income Tax
Income tax recognised in profit or loss
2024
2023
$’000
$’000
Current tax on profits for the year
5
4
Adjustments for current tax and deferred tax of prior periods
-
-
Deferred tax (benefit)/expense
(21,367)
-
Income tax (benefit)/expense
(21,362)
4
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Numerical reconciliation prima facie tax to income tax benefit
2024
2023
$’000
$’000
(Loss)/Profit from operations before income tax expense
(31,401)
170
Tax at the Australian tax rate of 30.0% (2023: 30.0%)
(9,420)
51
Non-deductible entertainment costs
9
68
Non-deductible share-based payments
465
219
Other non-deductible expenses and assessable income
(346)
(18)
Deferred tax assets not previously recognised
(12,070)
(316
Income tax (benefit)/expense
(21,362)
4
Deferred tax asset comprises temporary differences attributable to:
2024
2023
$’000
$’000
Employee benefits (annual leave)
443
428
Retirement benefit obligations (superannuation payable)
184
-
Other accrued expenses (audit, accounting, payroll tax)
53
12
Fixed Assets
640
100
Provision for doubtful debts
34
9
Provision for long service leave
322
305
Provision for impairment (PDPs) through profit or loss
5,269
1,099
Provision for make-good lease
199
119
Unrealised FX (gains)/loss
1
38
Transaction costs
1,499
-
Lease liability
2,456
133
Tax losses
12,210
-
Deferred tax assets
23,310
2,243
Offset of deferred tax liabilities
(1,943)
(2,243)
Net deferred tax assets
21,367
-
Key estimates and judgements
Management has determined that the above deferred tax assets, comprising temporary differences
and unused tax losses, on the basis that it is probable that the Group will derive future taxable profits
sufficient to realise these assets. In undertaking this assessment, management has assessed forecast
taxable profit sensitivities underpinned by Board approved forecasts for the period FY2025 to
FY2029. Key assumptions forming the basis of the Board approved forecasts include cash flows
associated with forecast PDP liquidations, acquisitions and sales, reduced senior debt financing costs
and estimated operating costs. The recognition of deferred tax assets represents a management
estimate and judgement which may have a significant risk of causing a material adjustment to the
carry amount of the asset recognised within the next financial year.
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Deferred tax liability comprises temporary differences attributable to:
2024
2023
$’000
$’000
Prepayments
(17)
(17)
Right of use asset
(1,926)
(2,226)
Deferred tax liability
(1,943)
(2,243)
Offset against deferred tax asset
1,943
2,243
Net deferred tax liability
-
-
Deferred tax assets not brought to account:
2024
2023
$’000
$’000
Unused tax losses
13,037
21,533
Other temporary differences
-
3,472
13,037
25,005
The above deferred tax assets have not been recognised because the Group is not able to satisfy the
asset recognition criteria at year end. Unused Tax Losses will be carried forward indefinitely to be offset
against future taxable income subject to meeting the Australian Taxation Legislation requirements.
Deferred tax asset movements:
2024
2023
$’000
$’000
Opening balance
-
-
(Charged)/credited to P&L
23,310
-
23,310
-
Deferred tax asset liability movements:
2024
2023
$’000
$’000
Opening balance
-
-
(Charged)/credited to P&L
(1,943)
-
(1,943)
-
26.
Share Based Payments
Employee share scheme
No shares were issued under an Employee share scheme during the reporting period.
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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.
The cost is recognised in employee expenses (note 21) together with a corresponding increase in
equity (reserves) over the vesting period. On 31 October 2023, 9,269,841 Rights were issued to
executives and senior leadership. The share based expense in the period is as follows:
2024
2023
$’000
$’000
Existing plans
374
693
Plans granted during the year
672
36
Modification of plans
503
-
Total
1,549
729
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. An additional 276,705 shares were
granted under the Incentive Plan on 5 January 2024. The below assumptions were used to determine
the fair value of Performance rights at each date using a Black-Scholes pricing model using the grant
date share price and historic share price volatility:
2024
2024
2024
Grant date
31 October 2023
5 January 2024
15 July 20241
Expiry date
30 June 2026
30 June 2026
30 June 2026
Share price at grant date
$0.375
$0.415
$0.550
Exercise price
Nil
Nil
Nil
Expected volatility
60%
60%
60%
Dividend yield
Nil
Nil
Nil
Risk free rate
4.40%
3.77%
4.11%
Fair value at grant date
$0.375
$0.415
$0.550
1 Share-based expenses have been incurred for this grant in FY24 due to the performance period starting at 31 October 2023
Summary of Rights Granted
2024
2023
Number of rights
Number of rights
Unvested Rights at 1 July
4,165,250
4,491,500
Issued
(246,000)
(467,500)
Lapsed
(554,575)
-
Cash settled
(236,250)
(108,750)
Granted
9,269,841
250,000
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Unvested Rights at 30 June
12,398,266
4,165,250
Summary of Rights Modified
On 3 November 2023 the conditions of Performance rights granted on 23 September 2020 were
modified. This modification was to include a condition that the Rights were to be valued using volume-
weighted average price , resulting in an incremental fair value of $692,120 as calculated using a Black-
Scholes pricing model, recognised as a share-based expense over the remaining vesting period. The
terms of the Rights have been summarised below:
After modification
Before modification
Number of rights
2,600,000
2,600,000
Grant/Modification date
3 November 2023
23 September 2020
Expiry date
23 September 2024
23 September 2024
Share price at grant/modification date
$0.340
$0.285
Exercise price
Nil
Nil
Fair value - per right
$0.3400
$0.0738
Fair value - total
$884,000
$191,880
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 500,000 shares during the financial year valued at $150,000. As at 30 June 2024 the
Trust held 410,887 shares (2023: 5,156,887).
27.
(Loss) / Earnings Per Share
Basic (loss) / earnings per share
2024
2023
Cents
Cents
From continuing operations attributable to the ordinary equity holders of the
Company
(8.66)
0.19
Total basic (loss)/earnings per share attributable to the ordinary equity
holders of the Company
(8.66)
0.19
Diluted (loss) / earnings per share
2024
2023
Cents
Cents
From continuing operations attributable to the ordinary equity holders of the
Company
(8.66)
0.17
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Total diluted (loss)/earnings per share attributable to the ordinary equity
holders of the Company
(8.66)
0.17
Reconciliation of (loss) / earnings used in calculating earnings per share
2024
2023
$’000
$’000
(Loss)/Profit from continuing operations attributable to the ordinary equity
holders of the Company used in calculating basic earnings per share.
(10,039)
166
(Loss)/Profit from continuing operations attributable to the ordinary equity
holders of the Company used in calculating diluted earnings per share.
(10,039)
166
Weighted average number of shares used as the denominator
2024
2023
Number
Number
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings/(loss) per share
115,870,793
106,141,050
Weighted average number of ordinary and potential shares
used as the denominator in calculating diluted earnings per
163,022,626
123,758,468
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.
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28.
Events Taking Place After the Reporting Period
In July 2024 the following events occurred relating to employee share schemes provided:
Issue Date
No. Shares
Value per share
Change
Exercise
Consideration
1 July 2024
280,000
$0.49
Vested
$nil
$nil
1 July 2024
135,000
$0.49
Settled in Cash
$nil
$nil
12 July 2024
274,241
$nil
Lapsed
$nil
$nil
On 26 July 2024, the Group completed Financial Close of a new four-year $272.5m syndicated senior
finance facility, replacing the $216.8m Senior Facility in place at 30 June 2024 (note 16). $21.5m of
Medium-Term Notes (MTNs) also being subject to re-finance and are contracted to complete before
30 September 2024. The Syndicated facility comprises of two cash advance facilities of $222.5m and
$50m respectively, both incurring interest at the Bank Bill Swap Rate (BBSW) plus 5.5%.
On 29 July 2024, 5,416,881 warrants were converted into fully paid ordinary shares at an issue price
of $0.48 per share. On 5 August 2024, the Group completed the issue of 100 fully paid ordinary shares
at an issue price of $0.48 per share.
29.
Capital Management
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; and
•
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 2024 are set out in Note 16.
Dividends
No dividends were declared or paid during the financial year. No dividends have been declared after
the financial year end.
Franking Account
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91
The balance of the franking account at year end is, on a tax rate of 30.0%, $6.5m (2023: $6.5m).
30.
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
incorporation
Class of
shares
Equity holding %
2024
2023
Pioneer Credit Solutions Pty Limited
Australia
Ordinary
100
100
Sphere Legal Pty Limited
Australia
Ordinary
100
100
Pioneer Credit (Philippines) Pty Limited
Australia
Ordinary
100
100
Pioneer Credit Connect Pty Limited
Australia
Ordinary
100
100
Pioneer Credit Broking Services Pty Limited
Australia
Ordinary
100
100
Switchmyloan Pty Limited
Australia
Ordinary
100
100
Credit Place Pty Limited
Australia
Ordinary
100
100
Pioneer Credit Acquisition Services (UK)Limited1
United Kingdom
Ordinary
100
100
Pioneer Credit Solutions (NZ) Limited
New Zealand
Ordinary
100
100
Pioneer Credit Connect (Fund 1) Pty Ltd2
Australia
Ordinary
100
100
Pioneer Credit Connect (Personal Loans) Pty Ltd3
Australia
Ordinary
100
100
Pioneer Credit Limited Equity Incentive Plan Trust
Australia
N/A
100
100
Pioneer Credit Fund 1 Pty Ltd4
Australia
Ordinary
100
N/A
Pioneer Credit (SPV) Pty Ltd5
Australia
Ordinary
100
N/A
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
4 Pioneer Credit (Fund 1) Pty Ltd was incorporated on 29 September 2023 and the purpose of this entity was to hold a separate security of assets
5 Pioneer Credit (SPV) Pty Ltd was incorporated on 29 September 2023 and this entity owns 100% of the shares in Pioneer Credit (Fund 1) Pty Ltd
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92
31.
Parent Entity Financial Information
The individual financial statements for the Parent entity show the following aggregate amounts:
2024
2023
$’000
$’000
Balance Sheet
Current assets
1,481
639
Total assets
120,542
167,600
Current liabilities
(267,755)
(4,770)
Total liabilities
(291,543)
(281,417)
Net assets
(171,001)
(113,817)
Contributed equity
117,664
104,075
Reserves
7,178
8,475
Accumulated losses
(295,843)
(226,367)
Total equity
(171,001)
(113,817)
Loss for the year from continuing operations
(70,755)
(57,227)
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 2024.
32.
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.
The consolidated financial statements of Pioneer Credit Limited include the subsidiaries as set out in
note 30.
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
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Credit Connect (Fund 1) Pty Ltd and Pioneer Credit Connect (Personal Loans) Pty Ltd are not reporting
entities.
Set out below is a consolidated statement of profit or loss and other comprehensive income and
statement of financial position of the Closed Group.
2024
2023
Statement of profit or loss and other comprehensive income of
closed group
$’000
$’000
Interest income at amortised cost
75,090
73,089
Net impairment (loss)/gain on PDPs
(22,594)
3,767
Other income
804
5,236
53,300
82,092
Employee expenses
(36,184)
(34,365)
Finance expenses
(42,145)
(33,836)
Direct liquidation expenses
(3,161)
(3,704)
Information technology and communications
(4,171)
(3,456)
Depreciation and amortisation
(1,834)
(2,229)
Consultancy and professional fees
(8,984)
(1,735)
Other expenses
(3,468)
(3,359)
Loss before income tax
(46,647)
(592)
Income tax benefit
21,367
-
Loss after income tax expense for the year
(25,280)
(592)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation (loss) / gain
(392)
85
Other comprehensive income for the year, net of tax
(25,672)
(507)
Total comprehensive loss for the year
(25,672)
(507)
2024
2023
Equity – accumulated losses of closed group
$’000
$’000
Accumulated losses at the beginning of the financial year
(73,219)
(72,627)
Loss after tax expense
(25,280)
(592)
Share plan shares lapsed
1,279
-
Accumulated losses at the end of the financial year
(97,220)
(73,219)
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2024
2023
Statement of financial position of closed group
$’000
$’000
ASSETS
Current assets
Cash and cash equivalents
1,213
8,293
Trade and other receivables
3,487
1,023
Other current assets
1,496
693
Current tax asset
-
-
Purchased debt portfolio
100,834
104,285
Total current assets
107,030
114,294
Non-current assets
Property, plant and equipment
524
681
Intangible assets
786
489
Right of use assets
6,420
7,419
Other non-current assets
5,552
3,932
Deferred tax assets
21,367
-
Purchased debt portfolio
184,320
194,805
Total non-current assets
218,969
207,326
Total assets
325,999
321,620
LIABILITIES
Current liabilities
Trade and other payables and liabilities
25,344
6,143
Provisions
2,234
2,082
Lease liabilities
1,277
1,116
Borrowings
241,538
7,536
Total current liabilities
270,393
16,877
Non-current liabilities
Provisions
1,047
872
Lease liabilities
6,911
8,153
Borrowings
19,846
255,119
Total non-current liabilities
27,804
264,144
Total liabilities
298,197
281,021
Net assets
27,802
40,599
EQUITY
Contributed equity
117,664
104,075
Reserves
7,358
9,743
Retained income
(97,220)
(73,219)
Total equity
27,802
40,599
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95
33.
Related Party Transactions
Key Management Personnel
2024
2023
$
$
Short-term employee benefits1
2,719,701
2,908,512
Post-employment benefits2
181,163
174,009
Other long-term benefits3
(150,416)
116,354
Options
177,666
426,400
Share based payments
988,257
180,227
3,916,371
3,805,502
1Short-term benefits include salary, fees, non-monetary benefits and other 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
During the year $nil (2023: $67,561) was paid to Alana John Design, a related entity to Keith John.
Loans from related parties
The balance of and amounts owed to Directors and key management personnel in relation to Medium
term notes are as follows:
2024
2023
$
$
Balance at 1 July
-
-
MTNs acquired by related parties during the year
80,000
-
Interest charged
1,519
-
Interest paid
(1,326)
-
Consent fee charged
80
-
Balance at 30 June
80,273
-
Loans to key management personnel
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.
In November 2023, a loan was issued to the Managing Director for $1.5m.
All loans are on a full recourse basis with interest payable monthly at rates of 5% (May 2022) and 7.6%
(November 2023) per annum. May 2022 loans are secured by the underlying shares. The Company
engaged external advisors to confirm that each loan transaction was of an arm’s length nature and no
employee benefits have been recognised in relation to the loans or share transaction.
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96
2024
2023
$
$
Balance at 1 July
(1,900,000)
(2,050,000)
Loans to KMP
(1,500,000)
-
Loans extinguished1
-
150,000
Interest charged
(166,810)
(102,640)
Interest paid
166,810
102,640
Balance at 30 June
(3,400,000)
(1,900,000)
1 Includes write-off of $65,536
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:
2024
2023
$
$
RSM Australia:
Audit and review of financial reports
471,900
374,000
Statutory assurance services required by legislation to be provided by the
auditor
10,725
-
Total remuneration
482,625
374,000
Amounts are inclusive of GST and expense reimbursement.
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Consolidated entity disclosure statement
Name of Entity
Entity Type
Country of
Incorporation
Ownership
%
Tax
Residency
Pioneer Credit Ltd
Body Corporate
Australia
100
Australia*
Pioneer Credit Solutions Pty Ltd
Body Corporate
Australia
100
Australia*
Sphere Legal Pty Ltd
Body Corporate
Australia
100
Australia*
Pioneer Credit (Philippines) Pty
Ltd
Body Corporate
Australia
100
Australia*
Pioneer Credit Connect Pty Ltd
Body Corporate
Australia
100
Australia*
Pioneer Credit Broking Services
Pty Ltd
Body Corporate
Australia
100
Australia*
Switchmyloan Pty Ltd
Body Corporate
Australia
100
Australia*
Credit Place Pty Ltd
Body Corporate
Australia
100
Australia*
Pioneer Credit Acquisition
Services (UK) Ltd
Body Corporate
United
Kingdom
100
United
Kingdom
Pioneer Credit Solutions (NZ) Ltd
Body Corporate
New Zealand
100
Australia*
Pioneer Credit Connect (Fund 1)
Pty Ltd
Body Corporate
Australia
100
Australia*
Pioneer Credit Connect (Personal
Loans) Pty Ltd
Body Corporate
Australia
100
Australia*
Pioneer Credit Limited Equity
Incentive Plan Trust
Trust
Australia
100
Australia*
Pioneer Credit Fund 1 Pty Ltd
Body Corporate
Australia
100
Australia*
Pioneer Credit (SPV) Pty Ltd
Body Corporate
Australia
100
Australia*
* Pioneer Credit Limited (the ‘parent entity’) and its wholly-owned Australian subsidiaries have formed an income tax consolidated group
under the tax consolidation regime.
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Directors’ Declaration
In the Directors' opinion:
a) The financial statements and notes set out on pages 50 to 97 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 2024
and of its performance for the year ended on that date;
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;
c) At the date of this declaration, there are reasonable grounds to believe that the members of
the extended closed Group identified in note 30 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 32; and
d) the information disclosed in the consolidated entity disclosure statement is true and correct.
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
30 August 2024
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
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
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 2024, 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 material accounting policy information, the consolidated entity disclosure statement 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 2024 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 (including independence standards) (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.
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 Debt Portfolios (PDPs)
Refer to Note 11 in the financial statements
The Group holds PDPs with a carrying value of
$322,936,000, as set out in Note 11 of the financial
statements. The PDPs are held at amortised cost.
The measurement of the PDPs is estimated by the
Group using internally developed cash flow models
(the models).
Complexity arises in respect of the accounting for
PDPs due to the following:
•
the requirement 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 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
forecast cash flows requires considerable
judgement.
•
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.
Our audit procedures, including those performed by
our Data Analytic and Corporate Finance specialists,
included:
•
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, implementation and operating
effectiveness 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 included the
expected amounts and timing of cash flows from
customers;
•
Assessing the reasonableness of the assumptions
and key estimates used in the PDP models by:
–
testing a sample of customer account
characteristics to source documentation
or 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;
•
Testing the reasonableness of PDP interest
income and impairment gain/losses as calculated
by management’s PDP modelling;
•
Testing the accuracy of the mathematical outputs
of the modelled forecasted cash flows for all PDP
tranches;
Key Audit Matter
How our audit addressed this matter
•
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; and
•
Assessing the adequacy of disclosures contained
in the financial report.
Liquidity and going concern
Refer to Note 3 in the financial statements
For the year ended 30 June 2024, the Group
incurred a net loss after tax of $10,039,000 and has
net current liabilities of $159,400,000.
The Directors have prepared the financial report on
the going concern basis.
The Group’s various borrowings facilities contain
covenants which are closely linked to the carrying
value of the PDPs and the level and timing of
forecasted cash flows including PDP acquisitions,
liquidations and sales as disclosed in Note 11 to the
financial statements.
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 2025;
•
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 and comparison of prior year
forecast cash flows to actual cash flows;
•
Assessing the sensitivity of the key 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
various borrowings facilities;
•
Checking the mathematical accuracy of covenant
calculations over the 12 month period ended 31
August
2025
and
critically
assessing
the
forecasted
covenant
calculations
including
applying
sensitivities
to
PDP
liquidations,
acquisitions and sales to identify reasonably
possible potential breaches; and
•
Assessing the adequacy of disclosures made in
the financial report.
Key Audit Matter
How our audit addressed this matter
Recoverability of Deferred Tax Assets
Refer to Note 25 in the financial statements
The Group has a deferred tax asset of $21,367,000
which has been recognised in the financial
statements. The composition of this asset includes
unused tax losses of $12,210,000.
The treatment of this deferred tax asset is
considered a key audit matter due to:
•
the inherent uncertainty in management
forecasting whether or not sufficient taxable
profits will be available in future to utilise
recognised deferred tax assets; and
•
complexities associated with meeting the
requirements of Australian Taxation Legislation
with respect to the availability of unutilised tax
losses.
Our audit procedures in relation to management´s
recognition of deferred tax assets included:
•
Assessing the Group’s accounting policy for
compliance with Australian Accounting Standards;
•
Engaging our internal tax experts to assist in
evaluating management’s assessment of the
quantum and availability of unutilised tax losses of
the Group available pursuant to Australian
Taxation
Legislation,
including
having
consideration
to
advice
provided
by
management’s expert;
•
Engaging our internal tax experts to assist in
testing the accuracy of the Group’s current and
deferred tax computation for the current year,
including having consideration to advice provided
by management’s expert;
•
Evaluating
management's
assessment
that
sufficient taxable profit will be available to support
the recognition of the deferred tax assets,
including challenging the adequacy of evidence
provided;
•
Obtaining management's forecasts of future
taxable profits and critically evaluating and
challenging
key
assumptions
within
those
forecasts. Key assumptions included cash flows
associated with forecast PDP liquidations and
acquisitions,
finance
facility
funding
costs,
operating
cost
estimates
and
future
tax
adjustments, including having consideration to
advice provided by management’s expert; and
•
Assessing the adequacy of disclosures contained
in the financial report.
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 2024, 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:
a. the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b. the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view and is free from material misstatement, whether due to fraud or error; and
ii.
the consolidated entity disclosure statement that is true and correct and is free of 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/admin/file/content102/c3/ar2_2020.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 the directors' report for the year ended 30 June 2024.
In our opinion, the Remuneration Report of Pioneer Credit Limited, for the year ended 30 June 2024, 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
Perth, WA
MATTHEW BEEVERS
Dated: 30 August 2024
Partner
Overview ESG Director’s Report Financial Report Shareholder Information
| Annual Report
105
Shareholder Information
The shareholder information set out below was applicable as at 26 August 2024.
Distribution of securities
Analysis of numbers of equity security holders by size of holding
Holding
Holders
Ordinary shares
1 – 1,000
460
196,471
1,001 – 5,000
466
1,267,609
5,001 – 10,000
219
1,665,704
10,001 – 100,000
487
16,911,980
100,001 and over
146
120,338,201
1,778
140,379,965
Equity security holders
The names of the twenty largest holders of quoted securities are:
Ordinary shares
Name
Number held
% of issued
shares
J P Morgan Nominees Australia Pty Limited
23,851,508
16.99%
Mr Keith Roy John
17,297,934
12.32%
Jamplat Pty Ltd
11,000,000
7.84%
Citicorp Nominees Pty Limited
9,099,549
6.48%
NGE Capital Limited
6,796,780
4.84%
Pacific Custodians Pty Limited
6,712,943
4.78%
Buttonwood Nominees Pty Ltd
4,576,511
3.26%
BNP Paribas Nominees Pty Ltd
2,821,133
2.01%
National Nominees Limited
2,349,803
1.67%
Mr Irwin David Klotz
2,100,000
1.50%
S & G Morris Super Pty Ltd
1,479,487
1.05%
ZLT Investment Co Pty Ltd
1,300,000
0.93%
Mr Sunny Yang & Mrs Connie Yang
1,193,252
0.85%
Mrs Lilian Jeanette Warmbrand
1,189,476
0.85%
Mr Barry Hartnett
1,090,870
0.78%
Stockhill Nominees Pty Ltd
1,000,000
0.71%
Lachlan 11 Holdings Pty Ltd
923,177
0.66%
Mr Allan Hart
903,100
0.64%
Dr Paul Matthew Sullivan Bailey
872,856
0.62%
Mr Darren Richard John & Mrs Melissa Jaimee John
847,009
0.60%
Overview ESG Director’s Report Financial Report Shareholder Information
| Annual Report
106
Performance rights
Name
Number held
Holders
Employee Incentive Plan
11,709,025
12
Substantial holders
Substantial holders in the Company are set out below:
Name
Number held
% of issued
shares
J P Morgan Nominees Australia Pty Limited
23,851,508
16.99%
Mr Keith Roy John
17,297,934
12.32%
Jamplat Pty Ltd
11,000,000
7.84%
Voting rights
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.
Thank You.