CCP -7%; delivered a solid FY26 result, with profit, revenue and dividends all higher. However, shares fell due to a tougher US debt-purchasing environment and a softer investment pipeline.
Key results:
- Revenue rose 7.4% to A$586 million, missing consensus of A$590m
- NPAT increased 12% to A$105.5 million – inline with expectations
- EPS reached A$1.55 – inline
- Final dividend increased 26% to 45.5 cents.
- Closing purchased debt ledger was A$510.5 million.
- ROE was 13%.
FY27 guidance is for NPAT of A$110–118 million and EPS of A$1.61–1.73. Consensus for FY27 was A$116m and 1.70c respectively, so at the midpoint, it’s a slight miss.
The concern is the US business, where debt supply has tightened and pricing has increased. Credit Corp has invested A$62 million in US ledgers so far in FY27, against full-year guidance of A$100–130 million, compared with A$166 million in FY26.
MM’s view: The FY26 result was sound, but the market is looking through the backward-looking numbers and focusing on the weaker US purchasing backdrop. Credit Corp remains disciplined and profitable, but unless investment opportunities improve, earnings growth from the US division may be harder to sustain.
MM has no interest in CCP ~$12.80
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