Collection House doubles NZ business
Item: Media Release / Company Announcement
Client: Collection House Limited
ASX Code: CLH
Collection House doubles NZ business and company profit
Financial Information Summary (A$)
Revenue $118.4 M (+96 %)
EBITDA $45.5 M (+144 %)
Net profit after tax $18.7 M (+101 %)
Net assets $80.9 M (+13 %)
Eps (basic cents per share) 19.6 ¢ (+85 %)
Dividend per share 12.5 ¢ (+92 %)
Return on shareholders funds 23.8 % (+77 %)
ASX listed Collection House Limited has doubled its business in New Zealand in the past year on the way to a company-wide profit of A$18.7 million - up more than 100% on last year.
Collection House yesterday released its annual results for the year to 30 June 2002, including a final fully franked dividend of 8 cents a share. This equates to an annual fully franked dividend of 12.5 cents per share, an increase of 92% on the 6.5 cent dividend paid in the previous year.
Today the Company said collections services in New Zealand experienced both organic growth from existing clients and increases from new clients signed during the period.
Debt purchase earnings growth came from the acquisition of further high quality debt portfolios from local financial institutions and increasing revenue from existing purchased debt portfolios. The balance of the growth in NZ came from the introduction of CLH Commercial, a specific commercial debt collection product targeting business to business debt.
The Collection House NZ group now employs more than 50 staff in New Zealand, up from 25 a year ago, with offices in both Auckland and Wellington The company also has several hundred local shareholders.
Commenting on the company’s overall result, Chief Executive Officer and Managing Director John Pearce noted “by doubling last year’s profit and achieving a similar increase in revenue, our company has confirmed itself as a growth business”.
Revenue across each segment was strong with collection services contributing 45%, purchased debt 40 % and credit reporting 15 % respectively.
Economies of scale continue to emerge as group processes are refined and the integration of recent acquisitions are beginning to contribute revenues, also allowing for further streamlining of costs to continue.
National, trans-Tasman and international coverage has been strengthened as Collection House has expanded in key capital and regional territories, continues to expand its New Zealand presence and has acquired businesses with international capabilities and brand recognition. This expansion has strengthened the company’s market position for major finance and insurance company referrals as these companies seek greater geographical coverage from their suppliers.
Technology enhancements to the company’s data facilities, human resources and accounting and finance areas have allowed greater sophistication in reporting and financial information. The web enablement of the Collection House proprietary collection system, “Controller” has increased client interface and on-line reporting capabilities. Improved technology has also flowed through to the compliance area where aided by sophisticated tracking technology, the compliance department protects both our clients’ and our own brands.
Corporate collapses have placed a higher priority and demand for more accurate forecasting, credit risk and rating tools including those supplied by Australian Business Research and Rapid Ratings.
Rapid Ratings launched its web-based global corporate credit rating service in June 2002 after 10 months of development with this innovative product satisfying the Collection House requirement for its reporting products to use technology rather than labour.
Key Collection House banking, finance and telecommunication clients continue to examine proof of concept regarding the development of a consumer credit bureau and advanced fraud detection products in line with the business development plan announced earlier this year.
“The Collection House outlook for 2003 is for continued growth at solid margins.” The company expects further profit growth driven by increases in operating revenues from existing and new business, earlier outsourcing, increased end to end receivables opportunities, growth in the insurance area and a greater level of cross selling revenue.
“The management team and staff of Collection House Limited have implemented the Board’s strategy and delivered solid growth, solid results and most importantly, a solid company.”