But the company has bluntly told investors that its strategic review and recapitalisation was a life or death decision for Collection House.

The company said the result would be that it expects the immediate future to be “challenging”. It would also find it hard to even compete and the supply of capital will be tight.

Chairman Leigh Berkley said its strategic review, which led to the sale of its Australian debt ledger, and its recapitalisation had been difficult it was “critical to the survival and future stability of the company”.

“The value of our purchased debt ledger assets was written down in the first half, not because of COVID, but because we had adopted a more customer-centric approach to collections,” Berkley said.

“The accounting value was reduced again when the sale of the PDL was finalised to line up the value we received from that transaction.

“So all the write downs have been recognised in the 2020 results giving us a fresh start in the full year 2021.”

The company was suspended from trading on the ASX for much of last year when it breached its loan covenants and struck problems refinancing its debt. It re-emerged on Christmas Eve with a new plan but its share price collapsed by about 60 per cent after investors chose to get out rather than wait for the company’s promise of a recovery.

Berkley said the strategic review found that while the amount of money it collected would not be reduced, it would take longer, on average, for people to repay their debts and this reduced the net present value of the debt ledgers.

Chief executive Doug McAlpine said the company’s decisions probably raised concerns about the capability of management.

“We expect the next few accounting periods are likely to remain challenging and there is a large program of change which must be delivered to set the company on a path of sustainable growth,” McAlpine said.

“In the short term it will be challenging for us to successfully compete head-to-head with larger, better-capitalised organisations.

“But the recapitalisation has put the company in a financial position from which we can rebuild our presence in the purchased debt market.”

He said Collection House would it will participate in the PDL sector with a co-investment partner who can provide capital.

But more than that has changed at Collection House. In 2018 it initiated bankruptcy against more than 500 of its clients. Last year that figure was zero.

It has adopted a policy of compassion rather than litigation, a strategy that owes much to the Hayne Royal Commission into financial services.