Credit Corp: Lending doing the lifting

About the author:

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

  • CCP reaffirmed FY23 guidance metrics. FY23 NPATA guidance is A$90-97m.
  • AUS debt buying volumes remain subdued, with cost management in focus to preserve margins. In the USA, both operational and industry conditions have improved incrementally. Volumes are improving; price adjustment will be key.
  • Consumer Lending is on track to deliver the expected 2H23 earnings skew and drive the majority of FY24 growth.
  • The building blocks are in place for CCP to return to delivering growth from FY24: profitability uplift from the increased loan book (in place); scale and improved operational effectiveness in the USA (execution required); partially offset by a rebasing of AUS earnings (ongoing as subdued volumes persist).
  • Improved operational performance and sector conditions are required in the USA to increase conviction in the outlook, with 1Q23 showing enough incremental evidence this can occur. Trading on ~11x FY24F PE, we maintain an Add rating.

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