Credit Corp shares drop on earnings miss
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More news: Shares in Credit Corp are down nearly 5% to $17.36 despite the debt collector swinging back to a first-half profit, with analysts disappointed by the result.
E&P analyst Olivier Coulon said the result saw slightly softer collection trends than expected.
What they said: "Overall the result shows a business continuing to move in the right direction in the critical US PDL [purchased debt ledger] business, albeit perhaps at a rate slightly below expectations," Coulon said in a note.
"...We think the call will be critical to how the stock performs today as investors gauge management’s confidence in both the trajectory of the US PDL business (given the massive latent earnings potential here) and CCP’s move to expand the consumer lending division into new products."
Credit Corp swings to first-half profit
The news: Debt collector Credit Corp has swung to a first-half profit on the back of record consumer lending and growth in US collections.
The numbers: The company reported a net profit of $44.1 million for the six months to December, compared to a $12.1 million net loss a year ago.
Revenue for the half year jumped 45% to $271.49 and the company will pay an interim dividend of 32 cents a share.
The context: Australia’s biggest debt collector said lending segment profit was up 79% from a year ago and said profit growth was driven by a significant step up in earnings from consumer lending.
US operational performance also improved, with collections up 12% despite no change in conditions and a period of reduced investment.
The company is outlying $150 million in the US over the full year anticipating opportunities to acquire credit card charge-offs.
Credit Corp has reaffirmed guidance for full-year profit of $90 million to $100 million, and earnings per share between 132 and 147 cents.
The source: ASX announcement
