Credit Corp’s increased focus on its lending business offset weaker earnings in its core purchased debt ledger business in the year to June, but not enough to prevent the company reporting a significant fall in revenue and profit for the year. Credit Corp chief executive Thomas Beregi warned that weak purchased debt ledger market conditions are likely to continue. Beregi said: “Supply in the Australian and New Zealand debt buying market remains constrained. While some one-off purchases were secured late in the year, the 2023/34 investment pipeline remains modest. A further contraction in segment earnings is expected in 2023/24.” The company acquired Collection House last October for A$15.5 million, adding $4.5 million of receivables and $1.7 million of PDLs. Factors contributing to the ongoing weakness of the PDL market include low arrears and loss rates on consumer credit contracts, low interest-bearing credit card balances and changed bank practices for dealing with customers facing hardship. Most debt buying opportunities in the current financial year will come from the company’s US operation, which was the only part of the PDL business to grow revenue. In the year to June, the company’s purchased debt ledger interest revenue fell 6.9 per cent to $270 million from $289.9 million in 2021/22. Offsetting this fall, consumer lending revenue rose 57.7 per cent from $93.7 per cent in 2021/22 to $147.8 million in the year to June. Growth in the loan book came at a cost: the consumer loan loss provision expense almost doubled to $61.7 million; and funding costs rose more than three-fold to $16.9 million. The company reported net profit of $91.2 million for the year – down 9.4 per cent from $100.7 million in 2021/22. The loan book hit a peak of $361 million in the March quarter and had a closing balance of $358 million at the end of June – 43 per cent up year-on-year.  The company’s Wallet Wizard brand caters to borrowers on lower income with credit impairments or weaker credit scores. Beregi said these consumers have been “re-leveraging post-COVID”. Credit Corp’s funding consists of a $212 million corporate loan facility, made up of a $140 million tranche maturing in June 2026 and a $72 million tranche maturing in March 2025. It also has a consumer loan warehouse facility, whose limit was increased from $100 million to $160 million during the year. At June 30, the carrying amount was $314 million – up from $128 million the previous year.