Brisbane-based debt collection specialist Collection House Limited (ASX: CLH) today updated the market that it expects to deliver a full year profit between $19 million to $19.7 million this fiscal year, with earnings per share (EPS) to come in between 14 cents to 14.5 cents.
In the last fiscal year it delivered a statutory profit of $17.4 million and EPS of 12.8 cents, although on an adjusted basis is reported EPS of 14.7 cents.
The stock has fallen 8% over 2017 in a reflection of the forecasts for relatively flat earnings growth, with the last fiscal year's profit result itself being supported by $3 million in cost savings as a result of staff redundancies across its purchased debt ledgers business.
This afternoon the shares change hands for $1.34 which is 9.5x the top end of guidance for 14.5 cents in earnings per share.
Dividends over the past 12 months have totalled 7.8 cents per share, which places the group on a trailing yield of 5.8% plus the tax effective benefits of franking credits.
While Collection House shares are up 43% over the past 5 years its primary rival Credit Corp Group Limited (ASX: CCP) has delivered growth of 179% plus dividends to investors. As such it may be worth taking a look at Credit Corp over Collection House for investors.
