Debt Collectors

[chops_a_must]

I am looking for listed debt collection agencies to see how they perform in the near term (for obvious reasons).

The only one I know of is CCP, and I'll be looking at that seriously when the dust settles. But I was wondering if there were any other listed debt collectors apart from CCP?

Cheers,
Chops.

 

[YChromozome]

The debt collection industry hasn't be a star performer in general. You also have ASX:CLH Collection House.

I have held CCP for quite some time and its been on of my star performers. However I always said once the credit crunch hit, that I would bail out.

CCP buys debt from banks, telcos and the alike and then recovers it. However I believe in a credit crunch, yes, the number of defaults will go up (its been going up very nicely the last couple of years!), but more people will have trouble paying CCP and if they go bankrupt its even worse news for CCP. But in saying this CCP is very well managed.

CLH on the other hand is not. They buy debt that is donkeys old and then try to recover it. I know first hand, Lion Capital (a subsidiary or trading name of CLH) rang me up one day looking for someone that shared the same first initial and surname than me. They were going through the phone book and clearly had little hope. The debt was probably so old, this person had moved on and hence they had no address, no phone number etc. They even asked if I new a person by that name, just in the off luck they strike it happy.

Most of CCP debt is bought at 90 to 180 days in arreas.

 

[rub92me]

Debt collection agencies get the biggest piece of their revenue from collection fees over the debts referred to them. More people will default so they will get more work. However it will be more difficult to collect. So could even out overall.