Credit Corp Group Limited · ASX:CCP
Credit — FY2015 Earnings Presentation
17 slides from Credit's earnings presentation, Feb 11, 2016
Slide 1: FY15 Results Presentation
FY15 Results Presentation 4 August 2015 Thomas Beregi, CEO Michael Eadie, CFO
Slide 2: Leveraging our leadership in the credit-impaired consumer segment
Leveraging our leadership in the credit-impaired consumer segment Core Australian debt buying business Credit-impaired consumer lending • Apply experience with credit-impaired consumers • Sustainable and responsible products Leverage • Segment not serviced by mainstream strengths to credit issuers e
Slide 3: Lending drives growth…
Lending drives growth… FY15 Financial Results FY15 FY14 $ Change % Change Debt Purchasing $155.1m $154.6m +$0.5m Lending $36.0m $19.4m +$16.6m Total Revenue $191.1m $174.0m +$17.1m + 10% Debt Purchasing $56.0m $55.5m +$0.5m Lending $1.4m ($3.5m) +$4.9m NPBT Total $57.4m $52.0m +$5.4m +10% NPAT $38.4
Slide 4: ... sustained by strong H2 investment…
... sustained by strong H2 investment… $m 140 120 $35m 100 $17m 80 $32m $16m 60 $87m $87m 40 $59m $56m 20 0 H1 FY14 H2 FY14 H1 FY15 H2 FY15 PDL outlay Net lending FY15 Results Presentation | 4
Slide 5: … and solid asset growth
… and solid asset growth $ million FY15 FY14 FY13 Pre-tax operating cash flow 215.6 200.5 173.6 Tax payments (26.5) (16.2) (15.4) PDL acquisitions, lending and capex (191.3) (197.3) (148.5) Net operating (free) cash flow (2.2) (13.0) 9.7 PDL and consumer loan carrying value 244.3 203.7 161.1 Net ban
Slide 6: Operational metrics maintained - pricing discipline and accuracy
Operational metrics maintained - pricing discipline and accuracy Cumulative Collections $m 1,600 Actual cash 1,400 collections 1,200 1,000 800 Initial Projections 600 400 200 - Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Note: For all PDLs
Slide 7: Operational metrics maintained - collection life-cycle
Operational metrics maintained - collection life-cycle • Full year collections in line with prior year PDL collections by date of purchase $m 80 75 70 23% 65 24% 30% 31% 31% 25% 28% 27% 60 55 24% 25% 24% 23% 13% 12% 27% > 3 years 50 28% 12% 27% 27% 12% 11% 13% 14% 15% 2-3 years 45 14% 13% 13% 13% 16
Slide 8: Operational metrics maintained - productivity
Operational metrics maintained - productivity Debt purchase productivity (direct collection staff only) PDL collections per hour $350 Total Productivity $300 $250 $200 12 mth avg.(1) FY14/15 $197 FY13/14 $201 $150 $100 FY 2013/2014 FY 2014/2015 (1): Weighted average productivity. FY15 Results Presen
Slide 9: Operational metrics maintained - payers base
Operational metrics maintained - payers base Total Portfolio Jun-15 Dec 14 Jun 14 Dec 13 Jun 13 Face value $4.9bn $4.8bn $4.7bn $4.5bn $4.0bn Number of accounts 703,000 698,000 744,000 759,000 711,000 Payment arrangements Face value $1,044m $963m $909m $791m $742m Number of accounts 133,000 125,000
Slide 10: Operational headcount to support asset growth
Operational headcount to support asset growth Period-end headcount (FTE) 1,300 1,200 Support 1,100 1,000 Financial Services 900 Mercantile 800 700 Debt Purchase Ops 600 500 400 300 200 100 0 FY11 FY12 FY13 FY14 FY15 Function FY11 FY12 FY13 FY14 FY15 Debt Purchase Ops 615 770 831 919 1,004 Mercantile
Slide 11: Solid PDL acquisition pipeline
Solid PDL acquisition pipeline • Price increases moderated during FY15 • Expiring forward flows renewed and additional volumes secured • Purchases priced to achieve hurdle return rate Purchases $m $145m $143m $137m $120m FY16 Purchasing Guide: $93m $90 - $120m $92m Contracted as at July 2015 (1) $60
Slide 12: Consumer lending book reaches $100m milestone…
Consumer lending book reaches $100m milestone… Momentum re-established in H2 FY15 Gross loan book excluding $100m provisions $m $72m $63m Annualised $47m Interest revenue $m $35m $19m $11m $6m $2m Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Gross loan book excluding provisions Annualised
Slide 13: …with the introduction of our new brand
…with the introduction of our new brand Sustainable online loans • Merges Small Amount Credit Contract (SACC) and Personal Loan (PL) products • Seamless graduation into lower cost finance • Supported by a fast automated decision engine • National advertising campaign launched on 19 April • TVC featu
Slide 14: The sustainable and responsible alternative
The sustainable and responsible alternative Sustainable online loans • Not a payday lender ̵ Loan amounts up to $5,000 ̵ Minimum term of 4 months up to 3 years (avg. SACC 8 months, PL 2.4 years) ̵ Lower rates and fees, substantially below legislated caps ̵ No early repayment fees ̵ Capped cost recov
Slide 15: US market conditions remain unfavourable…
US market conditions remain unfavourable… • Supply conditions constrained - Major credit issuers now unlikely to return to the market for 12 months - Despite recent regulatory settlement with JP Morgan Chase • Focus on operational improvement - Solid telephone collection outcomes - Satisfactory paym
Slide 16: FY16 Initial Guidance
FY16 Initial Guidance FY16 Initial Guidance PDL acquisitions $90 - $120m Net lending $30 - $40m NPAT $40 - $42m EPS (basic) 86 - 91 cents Dividend per share 44 - 46 cents FY15 Results Presentation | 16
Slide 17: Questions
Questions FY15 Results Presentation | 17