Credit Corp Group Limited (ASX: CCP) shares are avoiding the market weakness on Tuesday.
In morning trade, the ASX 200 stock is up 5% to $16.00.
This follows the release of the debt collection company's full year results.
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ASX 200 stock higher on FY 2024 results
- Revenue up 10% to $519.6 million
- Net profit after tax (pre-impairments) down 11% to $81.2 million
- Net profit after tax down 44% to $50.7 million
- Earnings per share down 44% to 74.5 cents
- Dividends per share down 46% to 38 cents
What happened during the financial year?
For the 12 months ended 30 June, Credit Corp reported a 10% lift in revenue to $519.6 million. This was driven largely by growth in the Australian/NZ lending business. Which includes the Wallet Wizard brand.
Australian/NZ lending revenue grew 21% to $179.1 million. Whereas Australian/NZ debt buying and collection services revenue rose 3% to $231.9 million and US debt buying revenue lifted 5% to $108.6 million.
Despite the top line growth, the ASX 200 stock posted an 11% drop in net profit after tax (before impairments) to $81.2 million. Management notes that while lending segment earnings grew strongly, this was offset by continued run-off in the core Australian/NZ debt buying business and degraded US collection conditions.
This ultimately led to the company slashing its dividend by 46% to 38 cents per share.
Management commentary
While on paper this result doesn't look great, management's commentary could be offsetting this and driving its shares higher.
The ASX 200 stock's CEO, Thomas Beregi, spoke positively about the company's start to FY 2025. He said:
We secured more than half of our expected annual US investment during the month of July alone, as recent operational improvement supported more competitive bidding.
Beregi is also feeling confident about the outlook of the Wallet Wizard business. He adds:
The Wallet Wizard cash loan book will deliver strong earnings growth over the next few years, however, further growth will depend on other products including auto and one of the current or planned pilots being rolled-out at scale.
Guidance
In light of the above, the company is guiding to solid profit growth in FY 2025.
Its FY 2025 net profit after tax guidance is $90 million to $100 million. The midpoint of this guidance range represents an increase of 17% on what was achieved in FY 2024.
Credit Corp's shares remain down over 30% since this time last year.
