Credit Corp Group Limited has reported a remarkable turnaround for the half-year ended 31 December 2024, posting a 464% increase in profit after tax to $44.1 million and a 45% rise in revenue to $271.5 million. The company also declared a fully franked interim dividend of 32 cents per share, signalling confidence in ongoing growth.
- 464% increase in net profit after tax to $44.1 million
- 45% revenue growth to $271.5 million driven by US collections and consumer lending
- Consumer lending segment NPAT up 79%, loan book reaches record $465 million
- Interim dividend declared at 32 cents per share, fully franked
- US operations show 12% collections growth with improved labour productivity
Strong Financial Turnaround
Credit Corp Group Limited has delivered a striking financial recovery in the first half of the 2025 fiscal year, reporting a net profit after tax (NPAT) of $44.1 million. This represents a 464% increase compared to a loss of $12.1 million in the prior corresponding period. Revenue surged 45% to $271.5 million, reflecting robust operational performance across its core segments.
The turnaround is particularly notable given the prior period included a significant impairment charge related to the US Purchased Debt Ledger (PDL) book. Excluding this, underlying NPAT still grew by 32%, underscoring the strength of the company’s business model and strategic execution.
Growth Drivers: US Collections and Consumer Lending
The US debt purchasing and collection operations showed a 12% increase in collections despite a conservative investment approach over the half-year. Labour productivity improved by 28%, positioning the company well to scale up purchasing activity. Credit Corp anticipates investing approximately $150 million in the US market over the full year, capitalising on stable pricing and attractive credit card charge-off opportunities.
Meanwhile, the consumer lending segment experienced a 79% jump in NPAT to $24.9 million, driven by a strong starting loan book that reached a record $465 million. Although lending volumes moderated slightly due to broader industry deleveraging trends, the segment’s earnings conversion remains impressive. New product developments, including the upcoming launch of the Wizit digital credit card, are expected to broaden the lending portfolio and fuel future growth.
Dividend and Capital Management
Reflecting confidence in its financial position and outlook, Credit Corp declared a fully franked interim dividend of 32 cents per share, representing just under 50% payout of earnings per share for the half-year. This follows a 23-cent final dividend paid in September 2024. The company’s net tangible assets per share increased to $12.44, up from $10.56 a year earlier, highlighting strengthened balance sheet resilience.
Outlook and Strategic Positioning
Credit Corp’s directors affirm that operating performance and investment levels remain aligned with expectations. The company is well-positioned to capitalise on improving US market conditions and continued consumer lending momentum in Australia and New Zealand. While the Australian and New Zealand debt purchasing segment faces ongoing market challenges, its earnings decline has stabilised, suggesting a more predictable run-off phase.
Overall, Credit Corp’s half-year results reflect a successful execution of its growth strategy, combining operational efficiency with targeted investments. The company’s ability to navigate complex market dynamics while delivering shareholder returns will be closely watched as it progresses through FY2025.
Bottom Line?
Credit Corp’s robust half-year rebound sets the stage for accelerated US investment and expanded lending innovation.
Questions in the middle?
- How will Credit Corp balance increased US debt purchasing with evolving market risks?
- What impact will the Wizit digital credit card have on consumer lending growth and profitability?
- Can the Australian and New Zealand debt purchasing segment stabilise amid ongoing market headwinds?