News

Change of Chairman Credit Corp Group Limited (Credit Corp or the Company) advises that Mr Donald McLay has stepped down from the position of Chairman.

Mr McLay’s decision follows the positive market reaction to the Company’s first half results and the recovery of its pre-COVID growth trajectory. Since the onset of COVID Mr McLay has worked closely with management to restore value for shareholders and, with this objective now achieved, he considers that it is the ideal time to appoint a new Chairman for the next phase of Credit Corp’s development. Mr McLay will remain on the Board as a Non-Executive Director.

The Board has elected Mr Eric Dodd to replace Mr McLay as Chairman. Mr Dodd has been a Director of Credit Corp since 2009 and brings considerable experience to the role, including past positions as CEO and Chairman of large financial services providers.

Mr McLay has served as Chairman of Credit Corp for more than 12 years, during which time the Company’s market capitalisation has grown from approximately $20 million to more than $2 billion. He has been instrumental to the Company’s successful expansion into the USA and its diversification into consumer lending.

Mr Dodd thanked Mr McLay for his leadership over such a long period of sustained growth and success. “Don’s contribution to the Company’s growth and development has been exceptional and I am pleased to continue working with him in his capacity as a Non-Executive Director” he said.

This announcement has been authorised for release by the Board.

Credit Corp reports first half profit growth of 10%

Credit Corp Group Limited reports the following highlights for the first half of the 2021 fiscal year: 

• 10% increase in net profit after tax (NPAT) to $42.3 million 
• Strong US purchased debt ledger (PDL) segment result with NPAT doubling to $8.0 million 
• Record half-year PDL investment driven by the Collection House purchase 
• Strong recovery in consumer lending volume over the December quarter 
• Upgraded full-year outlook

All segments either met or exceeded expectations. Aus/NZ debt buying and consumer lending businesses achieved expectations while the US outperformed.

Despite limited organic purchasing Aus/NZ collections remained in line with the prior year. Productivity improved by 7% over the prior corresponding period (pcp), producing solid segment NPAT growth. Collections reduced over the December quarter in accordance with the phased withdrawal of COVID-19 support measures but remained in line with expectations.

The Collection House purchase was completed on the last day of the period and will make a strong contribution over the second half. Mr Thomas Beregi, CEO of Credit Corp, said that while all credit issuers selling prior to COVID-19 had resumed their sale programs purchasing volumes were only now starting to grow as the impact of issuer forbearance dissipated. “The Collection House purchase will enable us to maintain our operational scale and grow collections while ongoing purchasing volumes recover” he said.

Operational improvement and elevated purchasing over recent years in the US combined to deliver a 36% increase in US collections and a doubling in segment NPAT. Purchasing volumes contracted over the period as a consequence of diminished supply arising from issuer forbearance and the impact of monetary stimulus on competitor purchasing appetite and pricing. Mr Beregi said the strong US profit contribution showed that the business was realising its potential. “While COVID-19 has produced tight purchasing conditions, our US business is very competitive and can grow NPAT rapidly when conditions ease” he said.

After significant run-off driven by COVID-19 uncertainty and the impact of government and other support measures, lending volumes substantially recovered over the December quarter. The consumer loan book grew by 10% over the December quarter.

Prospects for further growth in the loan book and a recovery in segment NPAT are favourable. December quarter consumer demand, measured by application volume, exceeded the same period in the prior year and delinquencies remained at record lows. Upgraded systems will support more rapid growth, through an improved customer experience, and will facilitate new products.

Outlook and guidance

Favourable operational performance has produced a strong start to FY2021 and this is expected to continue over the balance of the year. While ongoing investment will likely remain subdued the one-off acquisition of the Collection House book will drive collections and NPAT ahead of any recovery in purchasing conditions. The Company remains debt-free, with $400 million in net cash and undrawn credit lines, putting it in a strong position to seize further one-off opportunities and grow investment across all segments as market conditions allow.

Read the full Media Release - View the presentation - View the H1 FY21 Financials

Credit Corp Group Limited reports the following highlights for the first half of the 2021 fiscal year:

• 10% increase in net profit after tax (NPAT) to $42.3 million
• Strong US purchased debt ledger (PDL) segment result with NPAT doubling to $8.0 million
• Record half-year PDL investment driven by the Collection House purchase
• Strong recovery in consumer lending volume over the December quarter
• Upgraded full-year outlook

   

Read the full Media Release - View the presentation - View the H1 FY21 Financials