Activity in the purchased debt ledger market remains subdued, thanks to ongoing impact of COVID stimulus measures and weak consumer demand for unsecured credit, debt buyer Credit Corp reported in its half-year financial statement.
However, the company has maintained growth by using its financial capacity to make acquisitions.
It acquired Collection House’s Australian debt ledger book in December 2020 and Thorn Group’s Radio Rentals division in December last year.
In the US market, it sourced new suppliers and grew market share to offset a contraction in overall purchased debt ledger supply. After a significant drop in US purchasing in 2020/21, its pipeline is pointing to a record year.
Revenue in the six months to December grew 8 per cent over the previous corresponding period to $203.8 million.
The company made a net profit of $50.2 million – an increase of 19 per cent over the previous corresponding period. After adjusting for a one-off $4.5 million of loan forgiveness under the United States Paycheck Protection Program, earnings were up 8 per cent to $45.7 million.
The Australian and New Zealand debt buying business contributed $29 million to group earnings, an increase of 5 per cent over the previous corresponding period.
US debt buying contributed $10.5 million to earnings, an increase of 31 per cent. And Australian and New Zealand lending contributed $6.2 million, which was down 7 per cent.
Australian and New Zealand lending volumes picked up during the December quarter. After reaching a peak of $230 million in December 2019 the consumer loan book fell to a low of $153 million in September 2020 before recovering to $200 million in the December quarter last year.
With the purchase of Radio Rentals, Credit Corp loans to enter the market for the sale of goods by instalment and has several pilots underway.
The company said organic purchasing was recovering in Australia and New Zealand and in the US, and it is well-positioned with ongoing strong relationships with lenders.
It said it has undrawn credit lines available for any other one-off opportunities and continued PDL investment growth as market conditions improve.