Credit Corp FY profit up 17pct as US grows
Debt collector and lender Credit Corp has posted double-digit growth in full-year profit, boosted by a first profit from its US business and growing consumer lending at home.
Credit Corp's net profit for 2017/18 rose by 17 per cent to $64.3 million, up from $55.2 million a year earlier.
Revenue rose to $299 million, up from $265.9 million, with 19 per cent growth in revenue from Australian lending, to $79.3 million, and 83 per cent growth from US debt recovery to $24 million.
The US debt business delivered an inaugural profit of $1.9 million and profit from Australian lending, which includes the Wallet Wizard cash loan service, up 31 per cent to $16.1 million.
Credit Corp says Wallet Wizard, which issues short-term loans at an effective annual interest rate of 47.8 per cent, grew its loan book by 14 per cent to $183 million.
"Our consumer lending business accounted for 40 per cent of the company's earnings growth ... it's a really strong result," Credit Corp CEO Thomas Bergei told Sky News Business on Tuesday.
Mr Bergei credits the increase in demand to stricter lending criteria from big banks, which had also retreated from some forms of lending.
"The credit card and loan books from the major banks aren't really growing anymore ... customers are perhaps looking elsewhere," he said.
Credit Corp's debt buying business in the US, which was established about four years ago, is expanding, with the company have relocated to Utah and set to almost double its staff there to 400 employees.
Increased earnings from the US and business at home is expected to drive solid profit growth in 2018/19 in the range of four to seven per cent, Mr Bergei said.
"Both segments have the potential for substantial growth and the US, in particular, could grow to become as large as the Australian/New Zealand debt buying operation in the medium term," Mr Beregi said in a statement.
Credit Corp shares gained $1.62, or 8.5 per cent, to close at $20.58 on Tuesday - their highest level since March.
CREDIT CORP GROWS BUSINESS AND PROFITS IN 2017/18:
* Net profit up 17pct to $64.3m
* Revenue up 12.4pct to $299m
* Final dividend up 5 cents to 36 cents, fully franked
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