CCP - Credit Corp Group
- Thread starter ilikegirls
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Hahaha gold
With PNC encountering serious issues with their creditor, and CLH wasting their efforts fighting Lev Mizikovsky, CCP are very well placed. In fact, they might be able to buy part of PNCs book, as they're having a fire sale at the moment.
CLH won't be too far behind... Poorly managed.
P.S. I don't hold at all, so I guess I have you all beaten
Knobby22
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Thanks for the names to the unnamed companies mentioned previously by the Chairman.
Collection House actions make me understand why Lev is upset as a shareholder.
PNC is the company previously mentioned that is practically insolvent due to paying too much. They have been suspended since the 2nd September.
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I still hold all of my shares in Credit Corp and its still my largest share position. Indeed its my single largest investment.
I want to highlight a few things about the company culture of Credit Corp that do not get talked about much.
Firstly its a very lean company with very few deadwood staff on the payroll. The CEO and CFO double a company secretaries. All the senior managers including the CEO answer their own phone most of the time and have no personal assistants. From what I have observed on a company visit and based on phone calls there seems to be one woman who wears multiple hats doing some kind of admin work, reception (she does not man the reception desk and comes to the desk when you buzz her from the reception desk), and supports the senior management team. No personal assistants for senior managers in this company. Nor are there any investor relations people as management and directors front up to investors and respond to phone calls and emails. The senior managers have very modest offices (I observed it on a company visit some years ago). While these are relatively minor details it speaks to the lean no waste culture of the company. And if you look previous annual reports showing support staff make up something around only 10% (varies from year to year though) of the total employee base.
According to the latest annual report over 95% of management positions are filled via internal promotion. Almost unheard of in a day age where hiring managers from outside the company seems common place. Having been a shareholder for a long time I have observed many faces on both the board of directors and senior management and even mid level management who have been with the company for many years.
Management and directors are conservative and under-promise and over deliver. They always use conservative accounting (for example upfront loss provisioning on consumer loans at a higher rate than actual losses experienced), maintain a strong balance sheet and routinely outperform their earnings guidance. They grow the business in a conservative fashion never overpaying for acquisitions, expanding into new markets slowly and cautiously by doing pilots first (there are still some pilot products in the pipeline in the consumer lending business). They try to grow in a steady and incremental manner.
Over the past 3 - 5 years earnings growth has been more moderate due to a number of factors. Starting up the consumer lending and U.S. business because during the early phase they were not yet profitable as well as the reduction of debt purchasing in the core Australian debt purchasing business coupled with a recent capital raising which short term impacts earnings per share. The short terms impact of the capital raising will fully work its way through this financial year and in due to this and other factors I expect the earnings outlook for the next 3-5 years I expect to see an acceleration of earnings per share growth.
The consumer lending business continues to power ahead. The U.S. business is rapidly approaching scale and critical mass and market conditions are very favorable for expansion and given that its growing rapidly off a higher base it will now contribute more meaningfully to earnings growth. This coupled with the fact that there is still plenty of room for productivity growth. Finally the core Australian debt purchasing business has returned to growth coupled with the fact there is a strong chance they will buy some of Pioneer Credits PDLs. Collection House does not have the balance sheet (or the market support for a capital raising) to support a major purchase of Pioneer Credits Assets and there are no other meaningful players left aside from Credit Corp to buy it in Australia unless private equity jumps into the fray but that looks unlikely as they previously looked at a transaction with Pioneer Credit and walked away.
The fact that in the Australian PDL business profit only declined 4% from the peak despite a 30% step down in purchasing and despite having to wear the start up costs of the U.S. division and consumer lending and despite the impact of the capital raising that Credit Corp was able to generate reasonable earnings growth over the past 5 years speaks volumes about the quality of the business and the management team. The company is now very well positioned to witness an acceleration in earnings growth over the next 5 years.
I will continue to hold my Credit Corp shares for a long time to come. There is no reason why it cannot eventually go to $100 per share in the long-term.
I want to highlight a few things about the company culture of Credit Corp that do not get talked about much.
Firstly its a very lean company with very few deadwood staff on the payroll. The CEO and CFO double a company secretaries. All the senior managers including the CEO answer their own phone most of the time and have no personal assistants. From what I have observed on a company visit and based on phone calls there seems to be one woman who wears multiple hats doing some kind of admin work, reception (she does not man the reception desk and comes to the desk when you buzz her from the reception desk), and supports the senior management team. No personal assistants for senior managers in this company. Nor are there any investor relations people as management and directors front up to investors and respond to phone calls and emails. The senior managers have very modest offices (I observed it on a company visit some years ago). While these are relatively minor details it speaks to the lean no waste culture of the company. And if you look previous annual reports showing support staff make up something around only 10% (varies from year to year though) of the total employee base.
According to the latest annual report over 95% of management positions are filled via internal promotion. Almost unheard of in a day age where hiring managers from outside the company seems common place. Having been a shareholder for a long time I have observed many faces on both the board of directors and senior management and even mid level management who have been with the company for many years.
Management and directors are conservative and under-promise and over deliver. They always use conservative accounting (for example upfront loss provisioning on consumer loans at a higher rate than actual losses experienced), maintain a strong balance sheet and routinely outperform their earnings guidance. They grow the business in a conservative fashion never overpaying for acquisitions, expanding into new markets slowly and cautiously by doing pilots first (there are still some pilot products in the pipeline in the consumer lending business). They try to grow in a steady and incremental manner.
Over the past 3 - 5 years earnings growth has been more moderate due to a number of factors. Starting up the consumer lending and U.S. business because during the early phase they were not yet profitable as well as the reduction of debt purchasing in the core Australian debt purchasing business coupled with a recent capital raising which short term impacts earnings per share. The short terms impact of the capital raising will fully work its way through this financial year and in due to this and other factors I expect the earnings outlook for the next 3-5 years I expect to see an acceleration of earnings per share growth.
The consumer lending business continues to power ahead. The U.S. business is rapidly approaching scale and critical mass and market conditions are very favorable for expansion and given that its growing rapidly off a higher base it will now contribute more meaningfully to earnings growth. This coupled with the fact that there is still plenty of room for productivity growth. Finally the core Australian debt purchasing business has returned to growth coupled with the fact there is a strong chance they will buy some of Pioneer Credits PDLs. Collection House does not have the balance sheet (or the market support for a capital raising) to support a major purchase of Pioneer Credits Assets and there are no other meaningful players left aside from Credit Corp to buy it in Australia unless private equity jumps into the fray but that looks unlikely as they previously looked at a transaction with Pioneer Credit and walked away.
The fact that in the Australian PDL business profit only declined 4% from the peak despite a 30% step down in purchasing and despite having to wear the start up costs of the U.S. division and consumer lending and despite the impact of the capital raising that Credit Corp was able to generate reasonable earnings growth over the past 5 years speaks volumes about the quality of the business and the management team. The company is now very well positioned to witness an acceleration in earnings growth over the next 5 years.
I will continue to hold my Credit Corp shares for a long time to come. There is no reason why it cannot eventually go to $100 per share in the long-term.
On the money. Nice little boost with an increase in numbers. Was considering selling but every time I do they just get better. Like an ex gf [emoji28]
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Even though I expected good synergies from the Baycorp acquisition, I was truly surprised at the massive level of cost savings they were able to generate in just 3 months! To buy business for $65 million dollars and find a way to take out $11 million in annual costs (according to the AGM presentation) without damaging the business is a rather spectacular result!! It just goes to show how Credit Corp run a truly lean operation and are light years ahead of their competitors in terms of productivity!
Although I must say I was not impressed by the two new directors the company appointed recently. Two more of the same old grey haired ex banker types. If you look at their track records as executives and directors they both were at companies which at best produced rather mediocre performance for shareholders.
John Nesbit was previously non executive chairman of AMP capital which is a large and serially under performing fund manager. He had senior positions at Perpetual and SunCorp both of which have been under performing for shareholders for many years.
As for Trudy Vonhoff she was previously a non-executive director of AMP (and at one point its chief financial officer) which has been a dog company for decades, Cab Charge which has done poorly even since ride sharing companies arrived on the scene. Rural Co which under-performed and oscillated between profitability and losses until it got taken over.
The company has a lot of directors who have had serial involvement with under performing companies. It shows in relation to poor decisions directors (as opposed to managers) have made over the years with regards to dividen payout ratios, DRPs, capital raisings, structure of executive remuneration on and on. To be honest Credit Corp has an outstanding management team but a rather mediocre board of directors.
This is aside from the fact that there is a gaping skills shortage on the board of directors. For a company so heavily reliant on data there should be a least one director who specializes in technology e.g. databases, can write code, has a background in data analytics, AI, etc. Also many years ago the board had Carlos Toda on the board who was a businessman and practicing lawyer. For a debt collection company having a lawyer on the board is hugely valuable. And another previous Simon Calleia was managing director of Credit Corp in its earlier days and had first had experience of its IT systems and collecting debts first hand, etc. The lack of debt collection industry experience on the board is also a concern.
The management team of Credit Corp is world class but the quality of the board of directors has slowly deteriorated over time.
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galumay
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Interesting points about the board VH, what did Buffett say about great companies needing to be able to be run by an idiot - because one day they probably will be!
I wonder why the BoD is such a sorry collective of deadbeats, is it just the old boys club?
I wonder why the BoD is such a sorry collective of deadbeats, is it just the old boys club?
Faramir
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What was the silliest decision Credit Corp made in the last 5-8 years? Actually I should be asking what will the next silly decision? Looking into Pioneer Credit??
Credit Corp is one of the four suitors looking at acquiring Pioneer Credit. I can't explain it but I hope Credit Corp says No. I hope these deadbeats Directors do not think "what a great idea to buy out our competitor?" Maybe I am very wrong. I see a clash of cultures. I feel very uncomfortable. Hopefully someone inside CCP with common sense will tell the Directors some of the traps and pitfalls.
Am I wrong about my thoughts? Is looking into Pioneer Credit a good idea?? I really can not tell???
Credit Corp is one of the four suitors looking at acquiring Pioneer Credit. I can't explain it but I hope Credit Corp says No. I hope these deadbeats Directors do not think "what a great idea to buy out our competitor?" Maybe I am very wrong. I see a clash of cultures. I feel very uncomfortable. Hopefully someone inside CCP with common sense will tell the Directors some of the traps and pitfalls.
Am I wrong about my thoughts? Is looking into Pioneer Credit a good idea?? I really can not tell???
Knobby22
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Sold a few (1/4). Just getting to be fair priced in my view.
galumay
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I did the same a while back, thought the same then too. Doubled since then!! At least I only sold some.
Knobby22
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Yes, I know the next profit report will be very good and there is a good chance we may have a Santa rally. I may regret this.
I’m always tempted to sell a few but then it pops again. No reason for me when they maintain the dividend.
Knobby22
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All my shares were paid through a large loan. So as I make profit I pay it down otherwise I would hold for dividend also.
Best loan ever!
galumay
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Steady as she goes, Baycorp bedded down and performing well, US really starting to spin the wheels.
Ok. When the dust finally settles I fundamentally believe this is a great business to buy.
Rock solid growth year in, year out. When this inevitable credit crunch comes and bad debts rise, they’ll be primed to take advantage in Aus and the US.
One of the top picks for me. Down nearly 35% from the peak already [emoji33]
Rock solid growth year in, year out. When this inevitable credit crunch comes and bad debts rise, they’ll be primed to take advantage in Aus and the US.
One of the top picks for me. Down nearly 35% from the peak already [emoji33]
tinhat
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What I love about stocks like CCP is that they are basically part of the system that grinds the poor into profit. Grind the poor into money. Yeah yeah, what a great way to make a buck.
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