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Originally Posted by percy
It certainly does.
In Turners case the loans being securitised are low risk, as Turners have a history of low default loans.
So Turners get cash up front from the sale of the loans, packaged up and sold securitised,and can then recycle the funds.
GFC was caused by poor low grade loans being packaged up and sold as first grade loans.
It is therefore very important to understand the quality of the loans being packaged up and securitised.
What is turners impairment percentage?
I believe FXL Group Impairment / ANR percentage is 2.9% I thought this was low-ish, or is it high?
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You will need to check for your self,as I am not sure I am giving the right figures .
From TRA's annual report pg 36.Impairment provision expense $2,026,000 against revenue from continuing operations $249,338,000.
therefore under 1%.
And yes 2.9% is lowish.
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Originally Posted by trader_jackson
What is turners impairment percentage?
I believe FXL Group Impairment / ANR percentage is 2.9% I thought this was low-ish, or is it high?
The 2.9% figure seens very (very) high even though they tout improved credit management. Doesn't seeing 3% of your receivables being written off raise some concerns?
Impairment expense was $63m - fair chunck of their net revenue eh.
TNR same calc is 1.0% (ANR is Average Net Receivables)
That other finance company Heartland runs at 0.4%
Last edited by winner69; 10-09-2017 at 08:43 PM.
”When investors are euphoric, they are incapable of recognising euphoria itself “
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Originally Posted by winner69
The 2.9% figure seens very (very) high even though they tout improved credit management. Doesn't seeing 3% of your receivables being written off raise some concerns?
Impairment expense was $63m - fair chunck of their net revenue eh.
TNR same calc is 1.0% (ANR is Average Net Receivables)
That other finance company Heartland runs at 0.4%
Given they are in the credit card market (mostly these days), I'm not sure its that easy to compare to Turners and Heartland... what other company would be a better comparable? Something very much in the consumer credit space, lending on smaller ticket items (generally)
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Originally Posted by trader_jackson
Given they are in the credit card market (mostly these days), I'm not sure its that easy to compare to Turners and Heartland... what other company would be a better comparable? Something very much in the consumer credit space, lending on smaller ticket items (generally)
CCV,CGR,MNY,MYS,and PNC are others you could use for comparison.
As I have over weight positions with both HBL and TRA in NZ, I have not researched them,so can't give an opinion,other than PNC may be the best prospect for continued growth.I note DMX, who I follow ,have them in their portfolio.
Last edited by percy; 10-09-2017 at 09:59 PM.
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Originally Posted by trader_jackson
Given they are in the credit card market (mostly these days), I'm not sure its that easy to compare to Turners and Heartland... what other company would be a better comparable? Something very much in the consumer credit space, lending on smaller ticket items (generally)
I only calculated the ratio for TRA because you bought Turners up
Suppose you did so to be smart to have a dig at Turners. But as Turners looked better its now not a fair comparison eh.
I quickly looked at MNY. Looks like they run at 7% odd ......but not a good comparison given they seem to operate at the lower end of the market and lend are almost a pay day lender or something
Whatever I still reckon Flexi bad debts are high and back to my original point I am uneasy about the emphasis they put on securitisation when discussing leverage
”When investors are euphoric, they are incapable of recognising euphoria itself “
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Had another look at the $63m bad debts
Still seems an awful lot - esp compared to $360m of net income.
”When investors are euphoric, they are incapable of recognising euphoria itself “
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Originally Posted by winner69
Had another look at the $63m bad debts
Still seems an awful lot - esp compared to $360m of net income.
Maybe... it is very orientated to consumer credit... back in 2013 when the share price was nearing $5, Impairment losses on loans & receivables were 27m vs net income of 217m - so it was 12.4% back then and 17.5% today (19.8% last year - trending down back to 12%?).
Seems it has always been high, yet the share price is more than 3x lower than back then
Other key metrics to maybe consider:
Profit back in 2013 was 66m vs 87m this year
Operating Cash Flows back in 2013 were 97m vs 161m this year
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Originally Posted by trader_jackson
Maybe... it is very orientated to consumer credit... back in 2013 when the share price was nearing $5, Impairment losses on loans & receivables were 27m vs net income of 217m - so it was 12.4% back then and 17.5% today (19.8% last year - trending down back to 12%?).
Seems it has always been high, yet the share price is more than 3x lower than back then
Other key metrics to maybe consider:
Profit back in 2013 was 66m vs 87m this year
Operating Cash Flows back in 2013 were 97m vs 161m this year
I am very surprised by the high impairements.
FXL brought FPF,whose business was basically the same as Smiths City Finance,and their impairements were exceedingly low.Still are.
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11-09-2017, 09:44 PM
#100
Originally Posted by percy
I am very surprised by the high impairements.
FXL brought FPF,whose business was basically the same as Smiths City Finance,and their impairements were exceedingly low.Still are.
It seems FPF (now New Zealand Cards) is running at 13.4% (12.6m / 93.9m) it is below FXL's average for this year. In fact both NZ Operations are doing well compared to their aussie counterparts well - NZ leasing is just 2.1%. Australia Cards is 'the baddy' running at over 28%... apparently this "reflects growth in loans" , should improve going forward (maybe?).
Those American banking guys that recently gaven them the that new $550m facility at the end of June mustn't be to worried (they did their due diligence as well apparently)... so no worries.
In their annual report they seem to like talking about "mproved recoveries from continuous management of arrears" or words to that effect... so maybe they really are trying to work on it? Hopefully the half year result confirms this... could start to see the 'promised turnaround' (shame it is still a good 5 months away....)
Last edited by trader_jackson; 11-09-2017 at 09:45 PM.
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