Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site.

FY20 update: Credit Corp (ASX:CCP) shares rise

The Credit Corp (ASX:CCP) share price is up around 5% after releasing an update for FY20. 

The Credit Corp (ASX: CCP) share price is up around 5% after releasing an update for FY20.

About Credit Corp

Credit Corp is Australia’s largest debt buyer, called purchased debt ledgers (PDL), and collector. The company purchases past-due consumer and small business debts from major banks, finance companies, telecommunication companies and utility providers in Australia, New Zealand and the USA. It has been operating for over 25 years and also runs the ‘Wallet Wizard’ short term lending brand.

FY20 profit expectations

Credit Corp has announced that it expects to report net profit after tax (NPAT) between $10 million to $15 million after accounting for the impairment of its purchased debt ledger (PDL) assets and additional provisioning arising from the impact of the COVID-19 pandemic.

Net profit before these adjustments is expected to be in the range of $75 million to $80 million.

The company said that customers have been less prepared to agree and maintain longer term repayment plans. This initially produced a sharp decline in collections and rising loan book arrears. However, some customers have been willing to make one-off repayments which improved PDL collections back to pre-COVID levels.

A warning

Credit Corp expects persistently elevated levels of unemployment, which will impact Credit Corp’s credit-impaired customers more severely if they remain unemployed. This will cause PDL collections to fall while loan book arrears will rise.

Management expects to incur an impairment to reflect a 13.5% reduction in the carrying value of its existing PDL assets. Loan loss provisions are expected to increase from 19% of the gross loan book to 24%.

Summary

Considering all of the pain, I think it’s impressive that the company is still going to report a profit for FY20. I’m not sure if it’s a buy today, but it could be worth buying later this year when the economic stimulus wears off.

[ls_content_block id=”14947″ para=”paragraphs”]

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
Skip to content