Credit Corp’s US Debt Buying Fuels 16% NPAT Surge, Eyes $164M FY26 Pipeline
Credit Corp Group Limited delivered a robust 16% rise in underlying NPAT for FY2025, driven by strong US debt buying and consumer lending growth, setting the stage for a record US investment pipeline in FY2026.
- 16% increase in underlying NPAT to $94.1 million in FY2025
- US ledger collections up 12%, boosting operational productivity by 28%
- Record A$164 million US debt ledger investment pipeline for FY2026
- 31% growth in consumer lending NPAT with 5% loan book expansion
- Final dividend declared at 36 cents per share, 49% payout ratio
Strong Financial Performance in FY2025
Credit Corp Group Limited has reported a solid recovery in its FY2025 results, posting a 16% increase in underlying net profit after tax (NPAT) to $94.1 million. This performance was underpinned by significant growth in both its US debt buying and Australian/New Zealand consumer lending segments. The company’s strategic focus on operational improvements and targeted investments has clearly paid off, positioning it well for the year ahead.
US Debt Buying Segment Drives Growth
The US debt buying segment was a standout contributor, with ledger collections rising 12% and productivity increasing by 28%. Credit Corp’s approach of acquiring lower balance, shorter-duration credit card receivables has improved cash conversion and shortened collection cycles amid uncertain market conditions. This operational success has enabled the company to secure a record A$164 million investment pipeline for FY2026, signaling confidence in continued earnings growth from this segment.
Consumer Lending Segment Shows Robust Expansion
Meanwhile, the consumer lending segment experienced a 31% jump in NPAT, reaching a record $54.3 million. This was driven by a 5% increase in the loan book to $466 million and lower upfront costs as lending volumes moderated following a period of post-COVID re-leveraging. Credit Corp’s flagship Wallet Wizard unsecured cash loan product remains a market leader, consistently attracting new customers. The recent launch of the Wizit digital credit card aims to diversify the product suite and appeal to a broader consumer base.
Challenges and Opportunities in AU/NZ Debt Buying
In contrast, the Australian and New Zealand debt buying market remains constrained, with Credit Corp’s purchasing down 29% year-on-year due to renewed competition and lower sale volumes. While this is expected to pressure segment earnings in FY2026, the company anticipates offsetting these impacts through efficiencies gained from systems consolidation within its collection services division.
Outlook and Dividend
Looking ahead, Credit Corp projects FY2026 NPAT in the range of $100 million to $110 million, implying a 12% growth over FY2025. This optimistic guidance is supported by the record US investment pipeline and a strong consumer lending book. The company also declared a final dividend of 36 cents per share, maintaining a payout ratio of 49%, reflecting confidence in its ongoing cash flow generation and financial stability.
Bottom Line?
With a record US investment pipeline and strong consumer lending momentum, Credit Corp is poised for continued growth, though challenges in AU/NZ debt buying warrant close watch.
Questions in the middle?
- How will Credit Corp’s new UK lending operations impact future earnings?
- Can the US debt buying segment sustain its strong collections amid economic uncertainty?
- What strategies will Credit Corp deploy to counteract the AU/NZ debt buying market constraints?