Credit Corp Group (CCP) H2 2024 earnings summary

Executive summary

• Delivered improved performance in FY24, with growth in US recovery and lending segments despite challenging market conditions.

• Lending segment NPAT grew 18% year-over-year, with the consumer loan book reaching a record $445 million gross closing balance.

• Focused on core competencies in credit-impaired consumer segment, leveraging analytics, operational excellence, and responsible practices.

• Underlying NPAT declined 11% to $81.2 million due to AU/NZ debt buying run-off and challenging US collection conditions.

• US operations improved in the final quarter, with record collections up 6% year-over-year despite reduced purchasing.

Financial highlights

• Total revenue rose 10% to $519.6m compared to FY23, with Australian/NZ lending up 21% and US debt buying up 5% (pre-impairment).

• Consumer loan book grew 24% year-over-year to $445 million.

• NPAT (pre-impairment) was $81.2m, down 11% year-over-year; statutory NPAT was $50.7m after a $65m US PDL impairment and $21.6m PDL life cycle gain.

• Basic EPS fell 44% to 74.5c; dividend decreased 46% to 38.0c; final dividend declared at 23c per share, with a full-year payout ratio of 51%.

Outlook and guidance

• FY25 NPAT guidance of $90–$100m, representing 11–23% growth over FY24 underlying result and a 17% increase at midpoint.

• Lending segment NPAT projected to rise 27% in FY25 as higher interest income is realized.

• FY25 purchasing guidance of $200–$250m, with $144m already secured by July 2024; net lending volumes at $45–$55m; EPS guidance at 132–147c.

• Consumer lending book growth expected to moderate in FY25, but record opening book to drive segment earnings.