Credit Corp: Lending doing the lifting
About the author:
- 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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