Credit Corp Group Limited · ASX:CCP
Credit — FY2012 Earnings Presentation
16 slides from Credit's earnings presentation, Aug 7, 2012
Slide 1: FY12 Results Presentation
For personal use only 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 26% to $26.6m • PDL acquisitions of $91.5m at target return criteria • Strategic growth milestones • Started US debt purchasing operation – Purchases during the yea
Slide 3: Operational performance delivers earnings growth
Operational performance delivers earnings growth For personal use only FY12 Financials versus prior year Actual May 12 Guidance PDL acquisitions down 1% to $91.5m $84 - $88m Revenue up 10% to $124.6m NPAT up 26% to $26.6m $26 - $27m EPS (basic) up 25% to 58.4 cents 57 - 59 cents ROE up 1.5pts to 23.
Slide 4: Balance sheet and cash flow provide a platform for expansion
Balance sheet and cash flow provide a platform for expansion For personal use only $ million FY12 FY11 FY10 Operating cash flow 136.5 119.5 103.2 PDL acquisitions, lending and capex (99.6) (95.7) (62.7) Free cash flow 36.9 23.8 40.5 PDL carrying value 129.1 147.0 147.6 Net bank debt - 23.8 42.1 Net
Slide 5: Purchases meet ingoing projections…
Purchases meet ingoing projections… For personal use only Cumulative Collections (Initial Expectations versus Actual) (July 08 – Jun 12) 800 750 700 650 600 Cumulative 550 Collections Actual 500 $m 450 Cash 400 Collections 350 300 250 200 Initial 150 Projections 100 50 - Jun-08 Sep-08 Dec-08 Mar-09
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% 27% 27% 27% 45.0 31% 32% 34% 34% 40.0 31% 9% 12% > 3 years 31% 31% 31% 10% 12% 35.0 19% 8% 2-3 years 29% 27% 11% 7% 20% 30.0 28% 7% 1-2 years 15% 20% 23% 18% 18% 22%
Slide 7: …while maintaining collection efficiency
…while maintaining collection efficiency For personal use only Debt Purchase Productivity (direct collection staff only) $290 FY12 Average 2011/12 $265 $270 Ex-Philippines 2010/11 $238 $250 2011/12 $222 PDL Collections per hour $230 $210 $190 $170 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb
Slide 8: Our strong payers base suggests this will continue
Our strong payers base suggests this will continue For personal use only Total Portfolio Jun 12 Dec 11 Jun 11 Dec 10 Jun 10 Dec 09 Face value $3.6bn $3.4bn $3.2bn $2.9bn $2.6bn $2.5bn Number of accounts 598,000 496,000 413,000 319,000 302,000 306,000 Payment arrangements Face value $639m $627m $598m
Slide 9: We have increased collection capacity
We have increased collection capacity For personal use only Headcount by function (FTE) 900 New Initiatives 800 Support 700 Mercantile 600 Debt Purchase Operations 500 400 300 200 100 0 FY09 FY10 FY11 FY12 Function FY09 FY10 FY11 FY12 Debt Purchase Ops 435 516 615 770(1) Mercantile 4 4 4 4 Support 5
Slide 10: Strong purchasing in FY12 will contribute to growth in FY13
Strong purchasing in FY12 will contribute to growth in FY13 For personal use only $92.6m $91.5m Purchases $70m $65m $m FY13 Purchasing Guide: $50 - $70m $37m $40m Contracted as at July 2012* FY09 FY10 FY11 FY12 FY13 Actual Actual Actual Actual Current *Includes US purchases 10
Slide 11: PDL purchasing conditions remain challenging
PDL purchasing conditions remain challenging For personal use only • Strong levels of competition have kept prices at high levels • Credit issuers in low growth / cost reduction mode have taken advantage of high prices by selling increased volumes, but this is unlikely to continue • Operational impr
Slide 12: US debt purchasing set to accelerate
US debt purchasing set to accelerate For personal use only • Started purchasing with local private buyer / collector – Outlay of $2.2m during FY12 – Collections to date are in line with expectations – Credit Corp operations manager re-located to US • Collections by Credit Corp staff commenced in Jul
Slide 13: Consumer lending on track
Consumer lending on track For personal use only • Targeting consumers with impaired credit records • Two products – instalment loan < $5,000 – debt consolidation loan • Current loan book of $6.0 million • To date arrears remain within expectations • Net yield on loan book similar to that of PDLs, af
Slide 14: Initiatives for FY13
Initiatives for FY13 For personal use only • Further improvement in collection operations to achieve global competitiveness • Expand US operations • Grow consumer lending 14
Slide 15: FY13 initial guidance
FY13 initial guidance For personal use only FY13 Guidance PDL acquisitions $50 - $70m NPAT $27 - $29m EPS (basic) 59 - 63 cents Dividend per share 29 - 32 cents 15
Slide 16: FY12 Results Presentation – Questions
For personal use only FY12 Results Presentation Questions