Credit Corp., a debt buyer in Australia, reported a decline in its full-year profit despite an increase in earnings from the lending segment. As a result, the company's shares fell by 12%, reaching a low of A$19.84 earlier in the day. This performance positions Credit Corp. as one of the worst performers on Australia's S&P/ASX 200.
For the 12 months ending in June, the company's net profit dropped to A$91.3 million (US$61.3 million), down from A$100.7 million in the previous year. Alongside this announcement, Credit Corp. also declared a final dividend of A$0.47 per share.
Credit Corp. attributed the decline in profit to the ongoing run-off in its core Australia/New Zealand debt buying business and increased costs associated with expanding its US operations. However, the company remains optimistic about its lending segment, stating that a "record starting loan book should produce strong earnings growth" for 2024.
The company also anticipates moderating investment in FY 2024, which is expected to generate significant free cash flow and reduce net borrowings.
Despite the recent decline, Credit Corp.'s shares have seen a 10% increase year-to-date.
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