Debt buyer Pioneer Credit’s plan to get its business back on track in the December half, after more than a year spent recapitalising the business, was thwarted by a marked slowdown in lenders selling their delinquent debt portfolios.

For the six months to December 2020, Pioneer invested A$16.9 million in debt portfolios, down from $36.8 million in the previous corresponding period.

The company’s financial report said: “Pioneer’s vendor partners continued to offer debt portfolios to the market but at a markedly slower rate than in previous periods.

“This reflected the financial services industry’s commitment to helping customers impacted by COVID-19 and the deferral of customer loan repayments during the early phase of the pandemic.”

Interest income fell from $29.5 million in the December half 2019 to $28.9 million in the latest half. The company booked an impairment charge of $2.7 million.

Pioneer made a loss of $8.4 million and a net cash outflow from operating activities of $3.9 million.

It was not the half the company was hoping for, after putting a new facility agreement in place in September.

Pioneer got into default with its lenders Bankwest and Westpac in 2019, following a loss triggered by a change to the accounting treatment of its purchased debt ledgers. The loss put Pioneer in breach of its covenant.

In December of that year, Pioneer entered into a scheme of arrangement for Carlyle Group to acquire Pioneer but that deal fell apart early last year.

Carlyle had taken over the senior facility agreement as part of the scheme. The parties spent six months in a standstill agreement while a new finance deal was worked out.