In early trade the Credit Corp Group Limited (ASX: CCP) share price has been one of the best performers on the local market.
At the time of writing the debt collector and loan provider's shares are up 9% to $21.99.
What happened?
Credit Corp is holding its annual general meeting today and has released its presentation to the market ahead of it.
Within the presentation the company provided an update on trading year-to-date and its guidance for the year ahead.
According to the release, market conditions are looking favourable and total collections are up 8% on the prior corresponding period.
Its core Australia and New Zealand operations have seen a 4% lift in collections, whereas the U.S. business has seen collections increase an impressive 32%.
Perhaps, most impressive is that it has achieved this despite its debt purchasing being 30% lower than the prior corresponding period.
Management has put this strong performance down to ongoing operational improvement and a disciplined deployment of financial capacity.
In light of the strong performance management has upgraded its full-year guidance and now expects net profit after tax in the range of $62 million to $64 million and earnings per share between 130 and 134 cents
Previous guidance had been for net profit after tax of $60 million to $63 million and earnings per share between 126 cents and 132 cents.
Should you invest?
Based on the mid-point of its full-year guidance Credit Corp's shares are changing hands at a little over 16x forward earnings.
While this isn't as cheap as rival debt collector Collection House Limited (ASX: CLH) or small loans provider Cash Converters International Ltd (ASX: CCV), I do think it is deserving of the premium.
While it isn't the type of company that I feel comfortable investing in, it could be worth a closer look given its update today.
