Credit Corp slumps after reporting weaker earnings
Make us a preferred source
Make us a preferred source on Google
More news: Credit Corp shares tumbled after the company reported flat net profit compared with the prior corresponding period, as disruptions to purchased debt ledger buying in Australia and New Zealand weighed on earnings.
Shares dropped by 15.69% to $12.14 at 2:02pm AEDT.
Credit Corp reaffirms profit growth guidance despite flat first half
The news: Debt collector Credit Corp has reaffirmed its full-year guidance after reporting a flat net profit result compared to the same period last year.
The numbers: Credit Corp reported net profit after tax (NPAT) of $44.1 million, in line with the prior corresponding period.
However, the company expects to improve earnings in the second-half period, and reaffirmed full-year NPAT growth guidance of 6-17%.
The context: Credit Corp said it experienced reduced earnings in the first half due to strong loan book growth and disruptions to purchased debt ledger purchasing in Australia and New Zealand.
CEO Thomas Beregi said that despite changes in the approach to the collection of US federal student loans, as well as "generally mixed" economic data, the company has not experienced any deteriorate in collection performance.
"[US] debt collection outcomes, including payment arrangement delinquency, have not shown any deterioration since mid-2023 despite a modest increase in unemployment over the same period," said Beregi.
Credit Corp also noted that negotiations with Humm Group are ongoing, after the company lodged a $385 million takeover offer for the buy now, pay later company late last year.
The source: ASX
