CCP - Credit Corp Group

[Faramir]

I took part in their April Capital Raise. Last year, CCP was the only stock I spent money (unfortunately). I literally just froze up due to my desperate financial situation but I still managed to summon what little I had to take part in their Capital Raise. I didn’t buy in the lows of sub-$7. It didn’t stay there very long.
So the Capital Raise was an opportunity for me to increase my holdings by roughly 80-90%%?? Maybe more??? It was obviously very over subscribed.

 

[peter2]

As we gain experience and hold/trade through significant market falls we come to appreciate the magnificent opportunity these falls present to the prepared trader/investor.

 

[galumay]

Another typical solid H1 result for CCP, guidance for the full year adjusted upwards, given their record for under promising and over delivering, thats a positive sign IMO.

 

[peter2]

IMO price is itching to go higher. When it breaks-out it should get to the pre-covid high of $38.
The MD is a bit thin so you won't be able to use a tight exit stop.

 

[peter2]

Since my last post the price of CCP has fallen from $33 to $28. It had some support at $30 but has fallen after the latest market update. It seems some investors didn't like the update.

I thought it was OK with a reasonable expectation of improved trading conditions in 2021. Perhaps they didn't like that the sales volume was 50% below pre-Covid levels. Surely that would have been anticipated during the pandemic economy.

Looks like I'll have to wait longer for a buy setup.

 

[galumay]

Maybe there was some profit taking from those that bought in along the run back up from March 2020? I doubt many long term holders have much desire to sell.

 

[divs4ever]

Credit Corp reports first half profit growth of 8%
Credit Corp Group Limited (Credit Corp or the Company) reports the following highlights for the first half of the 2022 fiscal year:  8% increase in net profit after tax (NPAT) to $45.7 million1
 9% growth in the consumer loan book over the half to $200 million
 Record half-year investment driven by:
 Step up in US purchased debt ledger (PDL) investment to $150 million+ per annum
 Radio Rentals acquisition
 On track for strong earnings growth across all segments over the full year Secondary purchases of the Collection House and Radio Rentals books grew Aus/NZ PDL segment collections by 6% and NPAT by 5% over the prior corresponding period.
While market volume remains subdued, organic purchasing continues to recover, reaching its highest level since the start of the pandemic. Mr. Thomas Beregi, CEO of Credit Corp, said that the recently completed Radio Rentals acquisition would sustain collections over the second half in advance of a recovery in organic purchasing. “Credit Corp enjoys strong purchasing relationships and is well-positioned as unsecured credit balances recover and charge-offs normalise,” he said.
In the US, Credit Corp has grown its market share to offset a contraction in PDL supply arising from the pandemic.
The Company has secured a full year pipeline of more than $150 million. The outlook is for a strong recovery in PDL supply over the medium term as US consumers rapidly increase their use of unsecured credit. Aus/NZ consumer lending demand accelerated over the December quarter as key markets emerged from COVID lockdown.
Record monthly originations were recorded in December. High settlement volumes suppressed first-half segment earnings due to up-front expected life-of-loan loss provision expense but produced a $200 million loan book at the close of the period. Higher interest revenue derived from the increased book will produce an improved second-half NPAT. 1 Excluding $4.5 million after-tax US Paycheck Protection Program (PPP) loan forgiveness during H1 FY2022.
Several lending pilots commenced during the period including the Wizpay Buy Now, Pay Later product, the auto loan re-launch and the US instalment loan pilot. Mr. Beregi noted that the expansion of lending operations will ensure sustained segment earnings growth over the medium and long term. “Acquisition of the Radio Rentals business assets has accelerated our plans to enter the sale of goods by instalment market and adds to the suite of lending pilots already underway.
All pilots utilise Credit Corp’s leading technology platform including fast online decisioning and superior collections,” he said. Outlook and guidance The Company is on track to grow earnings in all segments after record first-half investment.
Credit Corp remains debt free with undrawn credit lines intact for any one-off opportunities and continued investment growth as market conditions allow. Investment guidance for FY2022 has been upgraded in accordance with the following ranges:

Guidance issued Nov-21 Guidance upgraded Feb-22 PDL
acquisitions $280 - $300m ... $300 - $320m
Net lending volumes $45 - $55m ...$45 - $55m
NPAT $92 - $97m... $92 - $97m2
EPS 137 - 144 cents ... 137 - 144 cents2
This media release should be read in conjunction with the Appendix 4D and Consolidated Interim Financial Statements and the results presentation.

2022 Interim dividend (declared, not yet provided at 31 December 2021) 38.0 cents 100%

DYOR



i hold CCP ( 'free-carried' ) ( bought @ $6.20 in August 2012 )

bought as a 'safe-haven' for the 'crash' i thought was coming in mid-2013

sometimes getting it totally wrong .. is not a bad thing

 

[peter2]

CCP: Looks likely to break $35 soon. I've been buying the dips and selling near highs but now I'm willing to hold for more.

Nice report but was expected. CCP has been one of the strongest acting companies lately as it quickly attracts buyers whenever price falls. A little tricky to trade as the MD is very thin. Still happy to hold for more.

 

[galumay]

Nice HY report from CCP this morning continuing the quiet achievement, as usual under promise, over deliver. The business does have some operational risk as a fellow investor pointed out but I have held for many years and the potential capital gains helps reduce any concerns on my part.

 

[divs4ever]

i bought into this as a business liable to leverage a popping credit bubble ( credit crunch )

now IF i believed the Government ( and mainstream economists ) the economy is plodding along just fine

but here i am hold CCP up around 500% ( in 10 years ) , wondering who is being deceptive .. economy pundits or whoever is massaging the books at CCP

take care

but am happy to hold at MY buying price ( $6.20 )

DIVIDEND TYPE	DIVIDEND AMOUNT ($)	FRANKED	EX-DIV DATE	PAY DATE
Final	0.360	100.00%	30/08/2021	10/09/2021
Interim	0.360	100.00%	01/03/2021	12/03/2021
Interim	0.360	100.00%	02/03/2020	13/03/2020
Final	0.360	100.00%	19/08/2019	30/08/2019
Interim	0.360	100.00%	04/03/2019	15/03/2019
Final	0.360	100.00%	01/10/2018	12/10/2018
Interim	0.310	100.00%	05/03/2018	16/03/2018
Final	0.310	100.00%	07/11/2017	17/11/2017
Interim	0.270	100.00%	14/03/2017	24/03/2017
Final	0.270	100.00%	18/10/2016	28/10/2016
Interim	0.230	100.00%	11/03/2016	24/03/2016

what i find interesting here is how few LICs mention this in their top 10 ( or 20 or 25 ) holdings , ( surely i wasn't the only one buying this below $7 .. which gives 10% div. yield plus franking )

 

[Dona Ferentes]

CCP - Results out yesterday. Sold off initially but that was revised during the day.

Analytics and Discipline suggest they are a safe pair of hands as does Target

• Long term growth
• ROE 16% - 18%
• Low gearing

 

[galumay]

Results for FY2023 out this morning, at the lower end of previous guidance which may spook the market a little. (given the history of under promise/over delivery.) Happy long term hodler.

 

[divs4ever]

yeah the long term bit ( buying them years back ) is a big boost to contentment

buying in say the mid $20 range and an avalanche of defaults and late payments coming will make newer holders nervous

this might give some trading opportunities much like QBE in uncertain times

 

[galumay]

Good points, @divs4ever. They do range around a fair bit, I was too lazy to buy more after March '20 when they got very cheap again. Likewise I think you will do just fine picking up anytime they get below $20.

 

[divs4ever]

am thinking well below $20 if the market gets rattled ( much like MQG and QBE )

none of those three could be considered 'safe havens '

but will watch and consider regularly , CCP could easily make a pivotal acquisition or merger much like when HGG morphed into JHG

 

[mullokintyre]

CCP did about 10X volume on Tuesday as the punters got out.
There was a little bit of support over the past around the 16.30 mark, but that was broken bac in April before going on a runup back above 20.
I will be looking at this one between 15.40 an low 16's
It never really recovered after the huge dump for COVID back in 2020..
Mick

 

[galumay]

Huh?? CCP fell to under $10 in March 2020, then went up 200% to over $30 in 2021 before dropping back to round $20 recently. CCP have forecast a tough 2024, so it may well be possible to pick some up below $16.

 

[divs4ever]

remember they buy distressed/toxic debt at a discount , some retail investors will find the game CCP plays hard to understand , especially if they were to buy a distressed BNPL company ( basically for it's loan book ) , several to choose from if they try that strategy

 

[galumay]

Anecdotally, CCP have algos that give them a significant advantage in buying distressed/toxic debt, which would explain their sector leading margins. Whether that is a durable advantage I have no idea.

 

[divs4ever]

i bought in August 2012 thinking the economy would crash in mid 2013 terrible prediction ( maybe i should study for a Ph. D. but a nice stock pick to be wrong about

maybe algos will help but experience and time in the field will be a great edge , after all you still have to collect a good part of that distressed debt ( even if it was bought at cents in the dollar )