Credit Corp Group Limited · ASX:CCP
Credit — Corporate Update (May 2014)
16 slides from Credit's corporate update, May 21, 2014
Slide 1: May 2014 Update
For personal use only May 2014 Update 21 May 2014 Thomas Beregi Chief Executive Officer Michael Eadie Chief Financial Officer
Slide 2: Leveraging our leadership in the credit-impaired consumer segment
Leveraging our leadership in the credit-impaired consumer segment For personal use only Core Australian debt buying business Credit-impaired consumer lending Leverage • Apply our experience with credit- strengths to impaired consumers • Sustainable and affordable products expand into high • Segment
Slide 3: Growth momentum switches to lending
Growth momentum switches to lending For personal use only • Reduced PDL acquisition in the second half • Lending volumes offset reduced PDL acquisitions • Lending on track for profit in FY 2015 May 2014 Update 3
Slide 4: Our return disciplines remain in place…
Our return disciplines remain in place… For personal use only 1,200 Actual cash Cumulative collections Collections $m 1,000 800 600 Initial Projections 400 200 - Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Note: For all PDLs held at June 2008, initial projecti
Slide 5: … at a time when PDL prices have increased…
… at a time when PDL prices have increased… For personal use only • PDL collection multiples have compressed as prices have increased • Returns have been maintained by faster PDL liquidation Implicit multiple from PDL amortisation PDL turnover ratio (Collections / amortisation) (Collections / averag
Slide 6: …leading to reduced second half purchasing
…leading to reduced second half purchasing For personal use only • Declining share of major forward flows • Unexpected one-off sales in the first half $137m $140m FY14 Purchasing Purchases Guide: $135 - 140m $m H2 $49m $93m $92m $65m H1 $86m FY10 FY11 FY12 FY13 FY14 Actual Actual Actual Actual Guida
Slide 7: Operational metrics remain intact - productivity
Operational metrics remain intact - productivity For personal use only Debt purchase productivity (direct collection staff only) PDL PDL collections collections per hour Domestic Productivity per hour Total Productivity $400 $350 $350 $300 $300 $250 $250 $200 12 mth 12 mth $200 avg. $283 $150 avg. $
Slide 8: Operational metrics remain intact – payers base
Operational metrics remain intact – payers base For personal use only $5.0 759 $900 800 77% 745 72% 72% 72% 711 71% 71% $4.5 $800 650 Total Portfolio Face Value Face value of accounts under arrangement $4.0 598 $700 % of collections from payers 600 Number of accounts ('000s) $3.5 $600 $3.0 $500 $2.5
Slide 9: Lending volumes now more than offset reduced PDL acquisitions
Lending volumes now more than offset reduced PDL acquisitions For personal use only $ Capital deployed (Quarterly) Q113 Q213 Q313 Q413 Q114 Q214 4 Mths Apr 14* PDL acquisitions Lending volume Average capital deployed (last 22 months) *pro-rated to a quarterly average May 2014 Update 9
Slide 10: Accelerated growth in the consumer lending book
Accelerated growth in the consumer lending book For personal use only Gross loan book excluding provisions $52m $35m $19m $11m $6m $2m 1H12 2H12 1H13 2H13 1H14 Apr-14 May 2014 Update 10
Slide 11: Additional products are contributing to growth
Additional products are contributing to growth For personal use only Credit-impaired consumer lending products % of loan Pro-forma book economics Secured Term: 3 - 4 Years Principal: Up to $20K 15% (avg. $16K) Term: 1 - 3 Years Principal: Up to $5K 80% (avg. $3K) Unsecured Other products In pilot 5%
Slide 12: Lending business on track for profitability in FY15
Lending business on track for profitability in FY15 For personal use only • MoneyStart interest revenue now exceeds the up-front provision on new loans written MoneyStart monthly revenue and up-front provisioning 1.5 1 $'m 0.5 0 Interest revenue Loss provision expense May 2014 Update 12
Slide 13: US operational performance positive but pricing is unfavourable
US operational performance positive but pricing is unfavourable For personal use only • Operational performance has continued to improve • Pro-forma returns on purchases being achieved • Legal collections will deliver back-end returns • Regulatory flux has reduced supply and stimulated aggressive bi
Slide 14: US strategy adjusted for current conditions
US strategy adjusted for current conditions For personal use only • Until prices moderate we will - Maintain operational size at approximately 100 staff - Gain admission to further issuer panels - Make selective purchases at compromised returns May 2014 Update 14
Slide 15: Refined full year guidance
Refined full year guidance For personal use only Refined May-14 Issued Jan -14 PDL Acquisitions $135 - $140m $125 - $135m NPAT $34 - $35m $33 - $35m EPS (basic) 74 - 76 cps 71 - 76 cps May 2014 Update 15
Slide 16: Questions
For personal use only Questions Thomas Beregi Chief Executive Officer Michael Eadie Chief Financial Officer