The Pioneer Credit Ltd (ASX: PNC) share price has come out of a trading halt to accelerate to a 2-month high today. The financial service provider announced two positive updates which had led investors to load up on its shares.
At one point during early afternoon trade, Pioneer shares rose as high as 60 cents apiece. However, after some profit-taking, its shares have retraced to close at 58 cents, up 23.40%.
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What did Pioneer update the ASX with?
In its release, Pioneer advised it has secured a $200 million four-year senior debt facility agreement with Fortress Investment Group.
In addition, the company amended the expiry date for its medium-term notes until 2026 and increased the size to $60 million.
It is expected that both the senior debt facility along with the medium-term notes will reduce Pioneer's cost of funding. This will provide the company with ample firepower to pursue growth opportunities. The $260 million of senior and subordinated facilities frees up $32 million on the balance sheet.
Pioneer managing director, Keith John commented:
Upon completion, we expect Pioneer's enhanced capital structure will return the business to profitability.
By introducing flexibility into our balance sheet, we will be able to aggressively compete in the acquisition of PDP's1 and firmly establish Pioneer as the top challenger brand in the industry.
Furthermore, our demonstrated ability to grow the Pioneer performing arrangements portfolio will continue to drive liquidations and realise the value of our future investments.
Pioneer also completed a $5.4 million capital raise to boost its liquidity profile. A diverse group of institutional and high-net worth investors, including commercial real estate developers, the founders of a fast payout online casino, and regional logistics magnates, took part in the offer to help strengthen the firm's balance sheet.
The company issued each share at a price of 60 cents each. This represents a 27% premium on last Thursday's closing price of Pioneer shares at 47 cents.
The Company revealed a significant turnaround for FY22 and expects earnings growth for years to come.
Earnings before interest, tax, depreciation and amortisation (EBITDA) is projected to be more than $59 million. This is $5 million more than what was achieved in FY21.
Net profit after tax (NPAT) is also expected to rise to $1.5 million, up from a negative $19 million the year before.
Pioneer share price summary
Over the past 12 months, Pioneer shares have lost around 20%. Year-to-date hasn't been so positive, with the company share price flat for the period.
Based on valuation grounds, Pioneer presides a market capitalisation of roughly $38.56 million, with 71.4 million shares on issue.
