Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi MM team Thanks for the high quality reports and insights! I would like to hear your thoughts on Credit Corp (CCP)? They look to be at a good entry price with solid fundamentals and generally trade in a range which they are trading towards support
Hi Chris,
Debt collector CCP is trading near multi-year lows after being hammered well over 10% in early February following a disappointing 1H result:
CCP’s US business performed well, with revenue from its US debt buying segment rising 25% to $73.7m and NPAT jumping 63% to $11.7m. However, the group’s result was dragged down by weakness in Australia and New Zealand, where debt buying and collection revenue fell 6% to $108.1m and NPAT declined 10% to $10.9m after several issuers temporarily paused debt book sales, reducing collection volumes. The AU/NZ lending business delivered modest revenue growth (+4% to $101.8m) but NPAT fell 14% to $21.5m, despite a 14% lift in settled loans to $223.3m.
Also, CCP’s reduction in US purchasing guidance from $200-230mn to $160-180mn weighed on the stock with the best performing area likely to struggle moving forward.
Credit Corp performs best when credit growth is strong and banks are actively selling bad debt, while the economy remains stable enough for consumers to keep repaying. We agree it looks cheap ~$11, and yielding around 5.5% fully franked, but while the outlook for inventory (i.e. available debts to buy) is weak, we think they’ll remain challenged.
Take a free trial.
No payment details required.
Forgot password? Request a One Time Password or reset your password
One Time Password
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
A link to create a new password will be sent to the email address you have registered to your account.
Hi, this is only available to members. Join today and access the latest views on the latest developments from a professional money manager.
Our Smart Phone App will give you access to much of our content and notifications. Download for free today.
