On 1 November 2018, Credit Corp Group Limited (ASX: CCP) held its Annual General Meeting in which the company provided its FY 2019 guidance upgrade, following which the share price of the company increased by 3.255 percent as on 1 November 2018 (as at 3:30 PM AEST).
As per the FY 2019 upgraded guidance, by the end of FY 2019 the consumer lending NPAT will increase by 18 percent. The company is planning to purchase $170m to $190m in debt over FY19, which was $150m to $170m in the original guidance. The company is expecting its EPS to be in the range of 140 – 144 cents in FY 2019. The NPAT is expected to be in the range of $67 – $69m in FY 2019. As at October 2018, the Face value of accounts under arrangement were maintained at a record level of $1.3 billion and the Payments under arrangement represent 78% of collections. The company reported that on year to date basis, the collections of the company is 7 percent higher than the last year and the productivity is up 5 percent over the prior corresponding period.
According to the company’s Chairman, the prospects for FY 2019 are very positive for the company. The company will continue to consolidate its market leadership position in the Australia/New Zealand debt buying sector. At the same time, the company is expecting strong growth in its lending business and US debt buying business. Currently, the company is financially positioned to take advantage of other opportunities should they arise.
From FY 2008 to FY 2018, the company has delivered a 27 percent compound growth rate in earnings per share. The Dividends per share of the company have also increased from 4 cents in FY 2008 to 67 cents in FY 2018. Over the past 6 years, the company has diversified into new business adjacencies and locations and this strategy is now bearing fruit, adding depth and resilience to the company. This was particularly true during the 2018 financial year. During FY 2018, the net profit after tax of the company increased by 17 per cent to $64.3 million, up from $55.2 million in FY 2017. The new Australian consumer lending and US debt purchasing businesses are growing strongly and contributed to the bottom line for the first time. The company’s lending business in Australia/New Zealand grew substantially during FY 2018.
In the last six months, the share price of the company decreased by 2.31 percent as on 31 October 2018, and traded at a PE level of 14.100x. CCP’s shares traded at $19.67 with a market capitalization of circa $908.86 million as on 1 November 2018 (AEST 3:30 PM).
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