At its AGM today, Credit Corp Group Limited (ASX:CCP) laid out a recovery-focused strategy after a turbulent year, marked by a 44% drop in net profit after tax (NPAT) to $50.7m and a reduction in shareholder dividends. The company’s share price closed the fiscal year lower than where it began, a reflection of persistent challenges, especially in its US division.
The US debt-buying segment, while seeing a 12% increase in Q1 FY25 collections, grappled with operational inefficiencies and elevated delinquency levels that impacted collection outcomes and revenue. To address these, Credit Corp implemented targeted improvements, including restructuring its US leadership team, though sustained operational upgrades remain necessary to drive long-term efficiency gains in a volatile consumer landscape,
In the Australian and New Zealand market, Credit Corp’s core debt-buying segment maintained stability with a steady pipeline and prudent cost management. The Wallet Wizard product in the lending division achieved record Q1 FY25 volumes, expanding the loan book by 24%. However, the sector’s profitability faces potential constraints from rising cost-of-living pressures, which could increase consumer hardship and impact repayment rates.
Despite these challenges, Chair Eric Dodd expressed optimism for a gradual return to growth in FY25, citing Credit Corp’s diversified business model as a strategic advantage. “Credit Corp’s solid platform, combined with ongoing improvements, positions us well to navigate market uncertainties,” he said.
NPAT guidance for FY25 is expected between $90m and $100m.
