CCP - Credit Corp Group

[ROE]

Hello all, pretty new to posting on these forums but plan to try to contribute more regularly.

I have been passively watching CCP for a few months and have finally had a quick look at their numbers. The thing that struck me was the company's impressive cash flow generation and conservative capital expenditure. Free cash flow, not accounting earnings, is what determines the true value of a company. Credit Corp has also demonstrated in the past that it can reinvest this cash at a high rate of return on equity. Here is my first look Discounted Cash Flow calculation based on very conservative numbers. I didn't read into any reports too far so my results could be WILDLY exaggerated.

Inputs/Assumptions:

- Free Cash Flow (from FY09 Results Presentation): $44,300,000.
- Assumed no growth whatsoever.
- Discount rate (plucked it out of my head...its pretty conservative ): 16%

Based on the numbers above CCP should be trading with a market cap of $276,875,000 and a stock price of $6.25.

Today it closed at $1.90 with a market cap of $84,090,200.

I will definitely be researching this stock further.

It's only 12 months ago dooms slayer said the company going down the toilet, quick cut your loss and get out

Make sure you read their direct debit account number, when you look at their book and number of the people sign up to pay off their debt AMAZING

 

[tonza]

Does anyone happen to know at what point a financial institution will decide to sell their bad debts? That is, how far in arrears the loan is at the time they write it off and do they then sell it off immediately?

 

[cctrouble]

You have to ask though, what's the point in buying these debts if you're not authorised to collect them? See the rather recent and interesting views of the NSW Police at:

www dot creditcorptrouble dot com

 

[ROE]

You have to ask though, what's the point in buying these debts if you're not authorised to collect them? See the rather recent and interesting views of the NSW Police at:

www dot creditcorptrouble dot com

I think it's just compliant issue, they need a license and they probably over look on this one

just for a brief period ...I mean those debtor can ask for money back during those period but eventually they have to pay their debt out
so I dont see the point

 

[ROE]

Does anyone happen to know at what point a financial institution will decide to sell their bad debts? That is, how far in arrears the loan is at the time they write it off and do they then sell it off immediately?

These information are pretty hard to get as debt purchase are all secretive
as multiple company are bidding for the same debt and they don't like to reveal too much information on how they each bought their debt as
it commercial in confidence and your rival may use those information against you....

But once credit corp purchase the debt it has a useful life of 6 Years

 

[cctrouble]

I think it's just compliant issue, they need a license and they probably over look on this one

just for a brief period ...I mean those debtor can ask for money back during those period but eventually they have to pay their debt out
so I dont see the point

A brief period? CCP haven't beeen licensed for three years and still aren't. I think it calls to question the validity of any assignments of debt and what about NSW debts that are automatically extinguished after six years? That's money that they'll have to hand back and will never get back.

If you don't consider compliance a serious issue, then obviously this is the stock for you. No wonder they have a misleading conduct suit against them, they'll probably have more!

 

[ROE]

A brief period? CCP haven't beeen licensed for three years and still aren't. I think it calls to question the validity of any assignments of debt and what about NSW debts that are automatically extinguished after six years? That's money that they'll have to hand back and will never get back.

If you don't consider compliance a serious issue, then obviously this is the stock for you. No wonder they have a misleading conduct suit against them, they'll probably have more!

I found it a bit bizzard actually, and the market doesnt seem to think its has any material impact keep
drive up the stock to record high

The site is setup in early September by some lone person in Bentleigh, Victoria which has information pulling out here and there
but never have a direct press release link nor direct link to the source

A dodgy scanned document, some facts pull out here and there, an email address that direct to this person and not proper authority.

I found the site to be highly suspicous and this person may have an personal vendeta against credit corp, rather than provide public with any useful resource.

Good luck with your pursue and hope you get your money back if they found to be in the wrong side of the law

 

[cctrouble]

I found it a bit bizzard actually, and the market doesnt seem to think its has any material impact keep
drive up the stock to record high

The site is setup in early September by some lone person in Bentleigh, Victoria which has information pulling out here and there
but never have a direct press release link nor direct link to the source

A dodgy scanned document, some facts pull out here and there, an email address that direct to this person and not proper authority.

I found the site to be highly suspicous and this person may have an personal vendeta against credit corp, rather than provide public with any useful resource.

Good luck with your pursue and hope you get your money back if they found to be in the wrong side of the law

Actually I stand nothing to gain except perhaps some interest as my Credit Corp debt pre-dates the 2006 legislation. Press releases went out yesterday and are no doubt being digested by the relevant recipients who in no doubt are in discussions with CCP regarding the authenticity of the document.

The reason for publicising the information is that it may be relevant to the 52,000 people out there paying CCP payments when maybe they don't need to, but that's up to them to check.

You can look up the licence number on the NSW Police SIR website and of course, pursuant to the act, you can ask any debt collection agency for a copy of their license, and under NSW legislation, they are obliged to provide it. Ask for a copy, and I bet you won't get one.

Whether they are licensed in other states, I have no idea... the ramification of it they're not? Also I have no idea.

 

[tonza]

Can you clarify the function of Credit Corp Services Pty Ltd and was it even operating in NSW?

Without knowing anything about the act or the subsidiary in question I find it very hard to believe that one of the largest companies in the industry would neglect such a basic and fundamental requirement.

I could not find the press release you speak of.

This smells fishy...

 

[cctrouble]

Can you clarify the function of Credit Corp Services Pty Ltd and was it even operating in NSW?

Without knowing anything about the act or the subsidiary in question I find it very hard to believe that one of the largest companies in the industry would neglect such a basic and fundamental requirement.

I could not find the press release you speak of.

This smells fishy...

Can you clarify the function of Credit Corp Services Pty Ltd and was it even operating in NSW?

Without knowing anything about the act or the subsidiary in question I find it very hard to believe that one of the largest companies in the industry would neglect such a basic and fundamental requirement.

I could not find the press release you speak of.

This smells fishy...

With respect, you only need to read CCP's annual report for confirmation that it wholly owns Credit Corp Services Pty Ltd, but for the avoidance of doubt, you can find a copy of the ASIC company search at http://www.creditcorptrouble.com/CCS-Search.pdf - as can be seen, the company operates out of NSW, and has done since 1998, hence why they have scurried off and obtained a licence, but sadly for CCP, it cannot be obtained retrospectively.

The press release contains personal contact information and as such, as is the usual procedure, the press release has been confined to certain members of the press.

You are quite right when you say that it is hard to believe that a company of such a size would overlook such a fundamental requirement. I think it goes to show the strength of management.

A share price that goes from over $11.00 in October 2007 to well under $1 within 12 months speaks volumes. There's a reason: http://www.imf.com.au/cases.asp?ID=70

Now that is fishy. Well, fishy enough for Federal Court action to be underway. Whilst any liability may be insured, it certainly makes clear how well this company is managed and how it deals with regulatory compliance.

It's as fishy as Centro on a 40 degree day.

 

[ROE]

With respect, you only need to read CCP's annual report for confirmation that it wholly owns Credit Corp Services Pty Ltd, but for the avoidance of doubt, you can find a copy of the ASIC company search at http://www.creditcorptrouble.com/CCS-Search.pdf - as can be seen, the company operates out of NSW, and has done since 1998, hence why they have scurried off and obtained a licence, but sadly for CCP, it cannot be obtained retrospectively.

The press release contains personal contact information and as such, as is the usual procedure, the press release has been confined to certain members of the press.

You are quite right when you say that it is hard to believe that a company of such a size would overlook such a fundamental requirement. I think it goes to show the strength of management.

A share price that goes from over $11.00 in October 2007 to well under $1 within 12 months speaks volumes. There's a reason: http://www.imf.com.au/cases.asp?ID=70

Now that is fishy. Well, fishy enough for Federal Court action to be underway. Whilst any liability may be insured, it certainly makes clear how well this company is managed and how it deals with regulatory compliance.

It's as fishy as Centro on a 40 degree day.

If you want to know the Clime story I can tell you a lot more than what in there or read previous post on this forum .. it got nothing to do with how Credit Corp collecting money from debtor

Certainly sound fishy to me, try to link some share holder court action
against some compliance stuff.....I think some one is in trouble with Credit Corp and go on a personal mission to create some bad press.

plus the whole domain setup sound fishy from the beginning I know who own it, who set it up, when it was set up, the meta tag use to optimize search engine to pick up for credit corp search, how long the domain will last..all too fishy..

Maybe you can open a short position on CCP if you think it's fishy and soon go down the same path as Centro

 

[cctrouble]

If you want to know the Clime story I can tell you a lot more than what in there or read previous post on this forum .. it got nothing to do with how Credit Corp collecting money from debtor

Certainly sound fishy to me, try to link some share holder court action
against some compliance stuff.....I think some one is in trouble with Credit Corp and go on a personal mission to create some bad press.

As you quite rightly point out, the fish really starts to stink when shareholders are taking action and the NSW Police (POLICE) take such a view. It doubles the reasons to avoid this stock.

If the sole purpose of a company is to collect debt and you are not licensed to collect the debts, then how is that different to running a company not licensed to provide financial services yet it provides financial services?

Sounds like disaster to me. I think there are a few pairs of rose coloured glasses going around here, and it's not the people that bought at $11 that are wearing them lol.

From an investment point of view, I'd be thrilled to have bought these at 50c, but given the outstanding legal issues, I'd be thrilled to sell out at $1 - double my money!

In these troubled economic times, what happens if all of CCP's debtors say 'f*ck it let's go bankrupt'? they've paid for a debt that then perhaps is unrecoverable.

Russian rouletter. Enjoy it if you will, but I reckon you have better chances at Crowne or Star City. The problem is you don't know how crappy (or ****hot) the debts are. Until next year's annual report.

 

[ROE]

As you quite rightly point out, the fish really starts to stink when shareholders are taking action and the NSW Police (POLICE) take such a view. It doubles the reasons to avoid this stock.

If the sole purpose of a company is to collect debt and you are not licensed to collect the debts, then how is that different to running a company not licensed to provide financial services yet it provides financial services?

Sounds like disaster to me. I think there are a few pairs of rose coloured glasses going around here, and it's not the people that bought at $11 that are wearing them lol.

From an investment point of view, I'd be thrilled to have bought these at 50c, but given the outstanding legal issues, I'd be thrilled to sell out at $1 - double my money!

In these troubled economic times, what happens if all of CCP's debtors say 'f*ck it let's go bankrupt'? they've paid for a debt that then perhaps is unrecoverable.

Russian rouletter. Enjoy it if you will, but I reckon you have better chances at Crowne or Star City. The problem is you don't know how crappy (or ****hot) the debts are. Until next year's annual report.

Isnt it part of the investment game? risk and reward? you do your research you act based on your opinion not on some rumor mill or some hot shot in the forum?

People buy and sell stock all the time...some buy 20 cents..sell at 30 cents..some buy at 20 and sell at a loss of 10 cents...
some buy at 50, sell out a $1 like you say and some buy at 50 cents
and still not sold out at $2 ..what's new?

People can borrow money from the bank and can declare themselves bankrupt too .... or people can stop shopping at Woolies or JB hi-fi, or you rent out a house and some dude decided he's not paying any more rent

I reckon with your negative view on CCP you should short them , you only long the stock when you feel future prospect are good

 

[cctrouble]

Is it part of the investment game? risk and reward? you do your research you act based on your opinion not on some rumor mill or some hot shot in the forum?

People buy and sell stock all the time...some buy 20 cents..sell at 30 cents..some buy at 20 and sell at a loss of 10 cents...
some buy at 50, sell out a $1 like you say and some buy at 50 cents
and still not sold out at $2 ..what's new?

People can borrow money from the bank and can declare themselves bankrupt too .... or people can stop shopping at Woolies or JB hi-fi, or you rent out a house and some dude decided he's not paying any more rent

I reckon with your negative view on CCP you should short them , you only long the stock when you feel future prospect are good

You seem to be overseeing the fact that the money borrowed from the bank, as you say, is often sold onto CCP. It's like buying a steaming pile of **** in the hope that some of it comes good.

But very few buy at $11 and sell at under $1, which of course as quite a different outcome if you're a "Mum and Dad" investor. Or any other investor it would seem. My personal view is I wouldn't buy CCP. I short term bought CER last year and got a good return, but I don't have the same feeling as CCP.

 

[persistentone]

With respect, you only need to read CCP's annual report for confirmation that it wholly owns Credit Corp Services Pty Ltd, but for the avoidance of doubt, you can find a copy of the ASIC company search at http://www.creditcorptrouble.com/CCS-Search.pdf - as can be seen, the company operates out of NSW, and has done since 1998, hence why they have scurried off and obtained a licence, but sadly for CCP, it cannot be obtained retrospectively.

The press release contains personal contact information and as such, as is the usual procedure, the press release has been confined to certain members of the press.

You are quite right when you say that it is hard to believe that a company of such a size would overlook such a fundamental requirement. I think it goes to show the strength of management.

A share price that goes from over $11.00 in October 2007 to well under $1 within 12 months speaks volumes. There's a reason: http://www.imf.com.au/cases.asp?ID=70

Now that is fishy. Well, fishy enough for Federal Court action to be underway. Whilst any liability may be insured, it certainly makes clear how well this company is managed and how it deals with regulatory compliance.

It's as fishy as Centro on a 40 degree day.

The Clime lawsuit is simply an investment manager trying to recover lost investment dollars. As CreditCorp recovers value that lawsuit will probably die. The Clime lawsuit to me reads more like a nuisance lawsuit than a substantial claim of misconduct.

 

[persistentone]

As you quite rightly point out, the fish really starts to stink when shareholders are taking action and the NSW Police (POLICE) take such a view. It doubles the reasons to avoid this stock.

If the sole purpose of a company is to collect debt and you are not licensed to collect the debts, then how is that different to running a company not licensed to provide financial services yet it provides financial services?

Sounds like disaster to me. I think there are a few pairs of rose coloured glasses going around here, and it's not the people that bought at $11 that are wearing them lol.

From an investment point of view, I'd be thrilled to have bought these at 50c, but given the outstanding legal issues, I'd be thrilled to sell out at $1 - double my money!

In these troubled economic times, what happens if all of CCP's debtors say 'f*ck it let's go bankrupt'? they've paid for a debt that then perhaps is unrecoverable.

Russian rouletter. Enjoy it if you will, but I reckon you have better chances at Crowne or Star City. The problem is you don't know how crappy (or ****hot) the debts are. Until next year's annual report.

What percentage of their debt portfolio is specific to NSW?

Isn't the worst case here that they obtain a license for a new entity and sell the debt to that properly licensed entity? It seems quite a stretch to say the law would prevent them seeking a remedy to any improper licensing.

 

[persistentone]

You seem to be overseeing the fact that the money borrowed from the bank, as you say, is often sold onto CCP. It's like buying a steaming pile of **** in the hope that some of it comes good.

But very few buy at $11 and sell at under $1, which of course as quite a different outcome if you're a "Mum and Dad" investor. Or any other investor it would seem. My personal view is I wouldn't buy CCP. I short term bought CER last year and got a good return, but I don't have the same feeling as CCP.

If I was a Credit Corp debtor I'd be looking hard at http://www.creditcorptrouble.com and seeking advice as to whether I can escape an "alleged" debt, or at least reduce/eliminate the usurious interest.

One thing I will grant you is that CreditCorp should at least be making its position on this issue clear and issue a press release.

 

[cctrouble]

The Clime lawsuit is simply an investment manager trying to recover lost investment dollars. As CreditCorp recovers value that lawsuit will probably die. The Clime lawsuit to me reads more like a nuisance lawsuit than a substantial claim of misconduct.

Umm, according to IMF, pleadings have closed and discovery is now underway. That will probably be quite a drawn out process, but CCP considered the matter serious enough to report on in June. This is not something that is merely going to "go away". Clime will want their money, and so will IMF.

 

[cctrouble]

What percentage of their debt portfolio is specific to NSW?

Isn't the worst case here that they obtain a license for a new entity and sell the debt to that properly licensed entity? It seems quite a stretch to say the law would prevent them seeking a remedy to any improper licensing.

In my view the worst case scenario is that all assignments of debts, judgments obtained, and interest since 1/7/06 is void.

As appears from the NSW Police correspondence, they are unable to obtain retrospective licensing, otherwise surely they would have?

Their registered office is in NSW, the majority of their call centre activity stems from NSW. The bank account and BPay facility that they invite you to pay into is in NSW. There is argument as to whether they need to be licensed both in NSW and in the state where the debtor resides, and that is being looked into, in my case, by the Victorian Ombudsman. the SA Office of Consumer and Business Affairs are also looking into the issue.

You can't just cook up a new licensed entity. If the assignee is not licensed, I think there is reasonable argument that the assignment is void and the debt disappears into thin air on the basis that CCP didn't have, by statute, good title to the assignment. It's a bit like buying a used car from an unlicensed dealer, the transaction becomes void, or voidable.

 

[cctrouble]

One thing I will grant you is that CreditCorp should at least be making its position on this issue clear and issue a press release.

Yup. And their CFO and CEO, as well as the ASX were made aware of the position on 1/9/09 and were invited to make an announcement to the market. They have chosen not to.

The folks and IMF & Clime no doubt base their claim on whether announcements to the market were made on time, if at all. It's all a bit deja vu.