Highlights
- Credit Corp Group Limited (ASX:CCP) reported results for the first half of the 2023 fiscal year (1H FY23).
- It saw 32% growth in the consumer loan book to AU$331 million; NPAT fell by 30% over the prior corresponding period to AU$31.8 million.
- CCP expects earnings to recover strongly over the second half; full year NPAT guidance remains intact, the company said.
Australia’s major debt buyer and collector, Credit Corp Group Ltd (ASX:CCP) reported results for the first half of the 2023 fiscal year (1H FY23). The company claims that it is on track to deliver solid FY2023 results.
CCP says it provides sustainable financial solutions, for instance longer-term repayment plans, with the aim of improving customers' financial situations.
How did CCP perform in 1H FY23?
- Witnessed 32% growth in the consumer loan book to AU$331 million.
- Net profit after tax (NPAT) fell by 30% compared to the prior corresponding period to AU$31.8 million.
- Record gross lending amounted to AU$201 million, driven by strong consumer demand.
- CCP continued to recover in charge-off volumes producing solid US investment.
- US resourcing expanded including growth across US operational sites and offshore resourcing from the Philippines and Australia.
What does CCP expect in the months to come?
The company expects earnings to recover strongly over the second half. It believes that loan book growth will moderate and record starting book will drive increased interest revenue.
In its recent media release, CCP stated that US collections will be better as improved resourcing is converted into collections. Besides, the high project costs experienced in the first half will not recur in the remainder period of the year. As per the company, purchasing will decrease in the remainder of the year as forward flows expire.
The company also stated that The Collection House agency acquisition remains on track to make a constructive contribution over the full year. The acquisition was completed during the first half.
Below mentioned are CCP’s revised guidance ranges-
- Purchased debt ledger (PDL) acquisitions might be between AU$290 to AU$295 million (previously AU$240 - AU$260 million).
- Net lending volumes range is cited as AU$140 - AU$150 million (previously AU$50 - AU$60 million).
- NPAT is expected to be between AU$90 and AU$97 million (same as previous guidance).
- EPS guidance range remains at 133 - 143 cents.
CCP on ASX
Mid-day on 1 February 2023, CCP was trading up by nearly 2% at AU$22.02. Its market capitalisation stands at AU$1.47 billion. The stock has grown by nearly 20% from 1 January 2023 to date.
CEO Thomas Beregi says that US charge-off volumes are increasing. This boosted resourcing might assist CCP to service latest and future purchases. In turn, collections and earnings might grow over the medium-term. It will be interesting to witness how CCP performs in the remainder of FY23.