Credit Corp ((CCP)) has impressed brokers with the growth rates in its debt purchasing business over recent years, having grown earnings per share at a compound rate of around 10% as well as diversified its business.
Sam Twidale, Portfolio Manager for the DNR Capital Australian Emerging Companies Fund, explains why he believes recent volatility in equity markets has provided some excellent opportunities in the smaller cap sector.
FY19 results were in line with expectations. Net profit guidance of $75-77m is below Morgans’ original forecasts but appears conservative. The broker expects FY20 will benefit from earnings uplift in the US and an increase of 16% in the consumer lending book as well as significantly lower debt.
Morgans does not believe there are any legitimate concerns raised from the recent anonymous report published on Credit Corp. The broker suggests, despite the attempt to damage the company’s reputation, it is unlikely the risk of access to funding has increased.