CCP -30.53%: the debt collector fell to 3-year lows today after taking a knife to asset values and guidance. The company said collection conditions had continued to deteriorate after flagging the higher delinquencies at results in August. As a consequence, the company has reduced the value of their US Purchased Debt Ledger (PDL) assets by $45m, or -14% given the company now expects lower returns over the medium term. In the immediate future though, Credit Corp has downgraded NPAT (before the impairment) by 10.5%, or $10m to $80-90m in FY23. We struggle to see how Credit Corp will get back on track in the near term given how expensive PDL’s are against a backdrop of weaker collections – something needs to give!
MM remains bearish CCP
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