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Credit Corp Group Ltd CCP

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Company Report

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Credit Corp Group Delivers a Better-Than-Expected Fiscal 2024

Shaun Ler

Credit Corp is a major purchased debt ledger acquirer in Australia, with long-term share of around a third of the market. It is also a minor debt collector in the US market with an estimated share of around 6% in fiscal 2024. PDLs are mainly acquired from banks and financial institutions, and are mostly unsecured credit card debt that are at least six months in arrears and already been through a collection process. Other forms of debt purchases include outstanding telephone or utility bills.

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Price vs Fair Value

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CCP is trading at a 230% premium.
Price
A$15.53
Fair Value
A$13.50
Uncertainty
High
1-Star Price
A$71.16
5-Star Price
A$4.20
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

A relatively prudent business model allows for better countercyclical investment and cash collections, which helps fund more purchases and issue more loans. This also supports continued funding and prevents excessive potential value destruction.

Bears

Competition for PDLs may be stronger moving forward, with larger peers having the ability to persistently outbid Credit Corp for better-quality bad debts, and competition from credit card alternatives for consumers.

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Trading Information

Previous Close Price
—
Day Range
—–—
52-Week Range
—–—
Bid/Ask
— / —
Market Cap
—
Volume/Avg
— / —

Key Statistics

Price/Earnings (Normalized)
21.21
Price/Sales
2.68
Dividend Yield (Trailing)
2.45%
Dividend Yield (Forward)
2.45%
Total Yield
2.45%

Company Profile

Credit Corp operates in the distressed consumer debt market. In its core business, it acquires purchased debt ledgers, or PDLs, in Australia and is expanding this business globally by buying PDLs in the United States. These PDLs consist of unsecured debt that are at least six months in arrears and have already been through a collection process. Since 2012, Credit Corp also diversified its business into providing consumer credit to customers who are unable to gain access to credit from primary sources such as banks because of a poor credit history. Its consumer credit business is gaining scale but is also subject to increased regulatory scrutiny.
Sector
Financial Services
Industry
Credit Services
Stock Style Box
Small Value
Total Number of Employees
1,840
Website
https://www.creditcorp.com.au

Competitors

Valuation

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Metric
CCP
HUM
WBC
Price/Earnings (Normalized)
 21.2130.3116.69
Price/Book Value
 1.280.701.52
Price/Sales
 2.680.685.83
Price/Cash Flow
 ——15.93
Price/Earnings
CCP
HUM
WBC

Financial Strength

Metric
CCP
HUM
WBC
Quick Ratio
 5.971.07—
Current Ratio
 6.131.08—
Interest Coverage
 3.771.03—
Quick Ratio
CCP
HUM
WBC

Profitability

Metric
CCP
HUM
WBC
Return on Assets (Normalized)
 4.01%1.18%0.68%
Return on Equity (Normalized)
 6.33%10.22%9.72%
Return on Invested Capital (Normalized)
 5.78%6.04%—
Return on Assets
CCP
HUM
WBC

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