Credit Corp Group Limited · ASX:CCP
Credit — H1 FY2012 Earnings Presentation
18 slides from Credit's earnings presentation, Feb 2, 2012
Slide 1: H1 of FY12 Results Presentation
For personal use only H1 of FY12 Results Presentation Thomas Beregi Chief Executive Officer Michael Eadie Chief Financial Officer
Slide 2: Earnings growth and strategic milestones achieved
Earnings growth and strategic milestones achieved For personal use only • Operational improvements continue to deliver growth • NPAT up 23% to $13.0m • PDL collections and fee income up 12% to $115.6m • Contracted purchasing pipeline up by $28m on Nov-11 position to $75m • Major distraction removed
Slide 3: Operational performance delivers earnings growth
Operational performance delivers earnings growth For personal use only H1 of FY12 Financials H1 of FY12 Nov 11 FY12 versus pcp Actual Guidance PDL acquisitions up 1% to $46.7m $50 - $65m PDL collections and fee income up 12% to $115.6m Revenue up 12% to $63.8m NPAT up 23% to $13.0m $23 - $25m EPS (b
Slide 4: Further strengthening of balance sheet
Further strengthening of balance sheet For personal use only Six months ended $ million 31 Dec 11 30 Jun 11 31 Dec 10 Operating cash flow 65.6 61.9 57.6 PDL acquisitions, lending and capex (49.7) (46.4) (49.3) Free cash flow 15.9 15.5 8.3 PDL carrying value 141.4 147.0 147.0 Net bank debt 13.5 23.8
Slide 5: Purchases meet ingoing projections…
Purchases meet ingoing projections… For personal use only Cumulative Collections (Initial Expectations versus Actual) (July 08 – Dec 11) 650 600 550 Actual 500 Cash Cumulative 450 Collections Collections 400 $m 350 300 250 200 Initial 150 Projections 100 50 - Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-0
Slide 6: …and we continue to drive collections from older PDLs…
…and we continue to drive collections from older PDLs… For personal use only PDL Collections by date of purchase 60.0 $m 55.0 50.0 28% 45.0 31% 27% 32% 34% 34% 40.0 31% 31% 9% > 3 years 31% 31% 10% 35.0 19% 8% 29% 2-3 years 27% 11% 7% 30.0 28% 7% 1-2 years 15% 18% 20% 20% 18% 25.0 21% 21% 19% 15% 16
Slide 7: …while maintaining collection efficiency
…while maintaining collection efficiency For personal use only Debt Purchase Productivity (direct collection staff only) $275 $269 $269 $263 $268 $256 $257 $249 YTD FY12 $255 Average $250 $245 $257 $241 $239 $238 2011/12 $231 $230 $245 $243 $227 $224 $224 $236 2011/12 $263 $225 $231 $231 Ex-Philippi
Slide 8: Our strong payers base suggests this will continue
Our strong payers base suggests this will continue For personal use only Total Portfolio Dec 11 Jun 11 Dec 10 Jun 10 Dec 09 Face value $3.4bn $3.2bn $2.9bn $2.6bn $2.5bn Number of accounts 496,000 413,000 319,000 302,000 306,000 Payment arrangements Face value $627m $598m $542m $476m $392m Number of
Slide 9: We have increased collection capacity
We have increased collection capacity For personal use only Headcount by function (FTE) 700 600 Support / New Initiatives 500 Mercantile 400 Debt Purchase Operations 300 200 100 0 FY09 FY10 FY11 Dec 11 Function FY09 FY10 FY11 Dec 11 Debt Purchase Ops 435 516 615 644(1) Mercantile 4 4 4 4 Support / N
Slide 10: Offshore collection operations on track
Offshore collection operations on track For personal use only Philippines site metrics • Debt Purchase operations FTE @ December 2011 128 • Effectiveness index on like portfolios vs Australia 100% • Productivity index on like portfolios vs Australia 78% • Total cost index 32% – Productivity and cost
Slide 11: Recent growth in FY12 purchasing pipeline …
Recent growth in FY12 purchasing pipeline … For personal use only $92.6m FY12 Purchasing $65m Guide: $75 - $85m Purchases $m $75m Contracted $37m as at Feb 2012 $47m FY09 FY10 FY11 FY12 FY12 Actual Actual Actual Contracted Current at Nov11 11
Slide 12: … due to a temporary increase in PDL supply
… due to a temporary increase in PDL supply For personal use only • Strong levels of competition to secure PDLs have kept prices at higher levels • Credit issuers in low growth / cost reduction mode are taking advantage of high prices by selling increased volumes • Operational improvements by Credit
Slide 13: A major distraction removed
A major distraction removed For personal use only • Conditional settlement of long-running shareholder litigation for $6.5 million • The majority of the settlement amount has been met by the company’s insurer • The settlement is likely to be ratified by the Court by March 2012 • The company’s contri
Slide 14: We commenced consumer lending in H1
We commenced consumer lending in H1 For personal use only • Targeting consumers with impaired credit records • Launched two products during H1 – instalment loans < $5,000 – debt consolidation loans • Current loan book of $2.5 million • To date arrears are within expectations • Net return on loan boo
Slide 15: Started US debt purchasing operations
Started US debt purchasing operations For personal use only • Purchasing in partnership with experienced buyer / collector • Outlay to date of $1 million • Investment fully hedged • Early collections are in line with expectations • Credit Corp manager relocated to the US to work with our partners •
Slide 16: Initiatives for H2
Initiatives for H2 For personal use only • Targeting further operational improvements to ensure ongoing competitiveness • Growth in consumer lending operations, including the launch of additional products • Further US purchases • Working with clients to provide outsourcing services 16
Slide 17: Revised guidance
Revised guidance For personal use only FY12 Updated Feb 12 Issued Nov 11 PDL acquisitions $75 - $85m $50 - $65m NPAT $25 - $27m $23 - $25m EPS (basic) 55 - 59 cents 50 - 55 cents 17
Slide 18: H1 of FY12 Results Presentation – Questions
For personal use only H1 of FY12 Results Presentation Questions