Credit Corp Group Limited · ASX:CCP
Credit — H1 FY2013 Earnings Presentation
16 slides from Credit's earnings presentation, Jan 31, 2013
Slide 1: H1 of FY13 Results Presentation
For personal use only H1 of FY13 Results Presentation Thomas Beregi Chief Executive Officer Michael Eadie Chief Financial Officer
Slide 2: Solid start and investment for sustained growth
Solid start and investment for sustained growth For personal use only US expansion • Collection facility to 30 staff • PDL book at $4m (2) Core strength • NPAT up 12% to $14.6m (1) • Record half-year PDL outlay of $72m • Improved purchasing pipeline Consumer lending growth • Doubling of loan book to
Slide 3: Operational momentum continues
Operational momentum continues For personal use only H1 of FY13 Financials H1 of FY13 Dec 12 FY13 versus pcp Actual Guidance PDL acquisitions up 54% to $72.0m $105 - $125m Revenue - underlying(1) up 6% to $67.5m NPAT - underlying(1) up 12% to $14.6m $27 - $29m NPAT - reported $16.7m $29 - $31m EPS (
Slide 4: Investment for growth
Investment for growth For personal use only Six months ended $ million 31 Dec 12 30 Jun 12 31 Dec 11 Operating cash flow 78.4 70.9 65.6 PDL acquisitions, lending and capex (77.4) (49.9) (49.7) Free cash flow 1.0 21.0 15.9 PDL carrying value 142.1 129.1 141.4 Net bank debt 3.5 - 13.5 Net debt / carry
Slide 5: Disciplined investment decisions
Disciplined investment decisions For personal use only Cumulative Collections (Initial Expectations versus Actual) (July 08 – Dec 12) 900 850 800 750 700 650 Actual Cumulative Collections 600 Cash $m 550 Collections 500 450 400 350 300 Initial 250 Projections 200 150 100 50 - Jun-08 Dec-08 Jun-09 De
Slide 6: Continued management of collection life-cycle
Continued management of collection life-cycle For personal use only PDL Collections by date of purchase $m 65.0 60.0 55.0 25% 24% 50.0 27% 28% 27% 45.0 27% 31% 13% 13% > 3 years 40.0 32% 34% 34% 9% 12% 10% 12% 2-3 years 35.0 8% 1-2 years 11% 7% 20% 22% 21% 30.0 7% 20% 18% 22% 23% < 1 year 25.0 16% 1
Slide 7: Collection efficiency tracking to expectation
Collection efficiency tracking to expectation For personal use only Debt Purchase Productivity (direct collection staff only) $290 12 Month $270 Average 2012/13 $207 $250 2012/13 $270 Ex-Philippines PDL and US Collections $230 per hour 2011/12 $231 2011/12 $257 Ex-Philippines $210 $190 $170 Jan-12 F
Slide 8: Solid payers base growth
Solid payers base growth For personal use only Total Portfolio Dec 12 Jun 12 Dec 11 Jun 11 Dec 10 Jun 10 Face value $3.8bn $3.6bn $3.4bn $3.2bn $2.9bn $2.6bn Number of accounts 650,000 598,000 496,000 413,000 319,000 302,000 Payment arrangements Face value $666m $639m $627m $598m $542m $476m Number
Slide 9: Collection capacity has lagged PDL investment growth
Collection capacity has lagged PDL investment growth For personal use only Headcount by function (FTE) 900 800 700 New Initiatives Support 600 Mercantile 500 Debt Purchase Operations 400 300 200 100 0 FY09 FY10 FY11 FY12 Dec-12 Function FY09 FY10 FY11 FY12 Dec 12 Debt Purchase Ops 435 516 615 770 76
Slide 10: Strong purchasing over the balance of the year
Strong purchasing over the balance of the year For personal use only $125m FY13 Purchasing Guide: $105 - $125m $92.6m $91.5m Purchases $m $65m Contracted $105m as at Jan 2013 $37m FY09 FY10 FY11 FY12 FY13 Actual Actual Actual Actual Current 10
Slide 11: Purchasing conditions remain challenging
Purchasing conditions remain challenging For personal use only > Strong competition has kept prices high > Credit Corp has used its operational strength to secure increased volumes > Minimum return criteria discipline has been maintained > Purchasing conditions are expected to remain challenging - L
Slide 12: Continued progress in the US
Continued progress in the US For personal use only > Operation has grown to 30 staff > PDL book stands at $4m > Encouraging signs despite falling behind pro-forma returns ̶ Experienced Credit Corp staff and high-performing external agents are within 10% of pro-forma collections on the most recent pu
Slide 13: Accelerated growth in consumer lending
Accelerated growth in consumer lending For personal use only > Loan book has increased by $6.0m to $12.0m currently > Majority of the loans written are unsecured instalment loans – Product branded as ‘MoneyStart’ – Terms of 1-3 years and amounts up to $5,000 – For consumers with previous credit defa
Slide 14: Initiatives for H2
Initiatives for H2 For personal use only > Continue improvement of core debt purchasing operation > Expand collection capacity in line with increased purchasing > Further optimise and grow the US operation > Accelerate consumer lending growth 14
Slide 15: December guidance confirmed
December guidance confirmed For personal use only FY13 Issued Dec 12 PDL acquisitions $105 - $125m NPAT - underlying (1) $27 - $29m NPAT - reported $29 - $31m EPS (basic) - underlying (1) 59 - 63 cents Reported EPS (basic) 63 - 67 cents (1) Excludes one-off litigation settlement with an impact on NP
Slide 16: Questions
For personal use only H1 of FY13 Results Presentation Questions