Credit Corp: Building a US base

About the author:

Scott Murdoch
Author name:
By Scott Murdoch
Job title:
Senior Analyst
Date posted:
02 August 2023, 7:00 AM
Sectors Covered:
Diversified Financials, Professional Services

  • Credit Corp (ASX:CCP) reported FY23 NPAT of A$91.3m (-5% on pcp), in-line with expectations.
  • FY23 divisional NPAT moves: AUS PDLs -29%; USA PDLs -17%; Lending +70%.
  • FY24 NPAT guidance has been set at A$90-100m (+10% at the top-end). The bottom-end allows for a number of uncertainties in the operating outlook; however we think current conditions support solid growth across FY24/25.
  • We expect the USA division can be a meaningful medium-term growth driver for CCP. Near-term, the market will be looking for some improved confidence in the collections and buying conditions (post CCP’s commentary on a deteriorating collection environment in the USA in 4Q23).
  • Add maintained. Whilst Lending is driving growth near-term (arguably a lower quality segment), we continue to see the USA opportunity as attractive with a management track record to deliver. Medium-term earnings upside potential exists from effective/opportunistic capital deployment.

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