Collection House Limited Wilson HTM Investor Presentation 30 April 2015

Transcription

1 Matthew Thomas Managing Director / Chief Executive Officer Collection House Limited Wilson HTM Investor Presentation 30 April 2015

2 Collection House Limited is a leading Australasian receivables management provider, utilising effective, ethical and innovative techniques and advanced proprietary technology Commenced business in 1992 Listed on ASX in staff in Australia, NZ and Philippines Experienced executive team average tenure exceeds 10 years Key differentiators: Ethical working culture underpinning market leading compliance standards, brand protection and customer outcomes Long standing strategy of diversification at various levels: products, clients, office locations and staff Page 2

3 Product and client mix Page 3

4 Financial Results to 31 st December 2014 $m 1H11 1H12 1H13 1H14 1H15 % Revenue Profit Before Tax (including significant items) Taxation (2.3) (2.9) (3.5) (3.9) (4.7) Net Profit After Tax PDL Cash Collections EPS (c) DPS (c) EBIT Margin 26.1% 27.7% 31.2% 30.8% 29.5% Return on Equity (Annualised) 10.5% 11.9% 12.6% 13.2% 14.0% Net Debt/Net Debt + Equity Page 4

5 Longer term performance 19% Compound Growth in Earnings over past 4 years FY10 FY11 FY12 FY13 FY Profit Before Tax ($m) LHS EPS (c) RHS Page 5

6 Growth Strategy FY15 revenue growth demonstrates successful strategic execution in prior year: - Organic growth, driven by leveraging of core strengths in compliance, innovation and depth of experience/data. - Prior year investments have provided extra collection capacity to increase liquidation rates from PDL assets. - Ongoing focus on building long term value of PDL book, particularly by growing the high quality arrangement book, underpins operational consistency and efficiency. - Improving returns from our Manila operation, which was expanded in late FY14 by 40% to 110 seats, as a transitional step towards a larger facility. Page 6

7 Growth Strategy Organic growth and increased scale by growing in existing and new markets. Expanded St George/Capital Finance contract announced late Feb 2015 Increasing market share in energy and telecommunications Promising sales pipeline Product development of new debt solutions for both clients and customers. Cash Flow Financial Advantage brokerage pilot in 2014, arrangement refinancing for consumer customers through trusted partners Complementary services for consumers under development Launch of dedicated Hardship Assistance team in late 2014 Ongoing investment in innovation, technology and analytics with quicker realisation of benefits. Long term investments in digital and analytics provisioned in business plans Pioneering new debt purchase markets and models Launch of Australian Credit Recoveries Trust (ACRT), a third party PDL investment vehicle Exploring acquisition or partnership opportunities in adjacent service areas. Opportunities to expedite strategies above constantly being evaluated within clear constraints of investment fundamentals, risk and brand position Page 7

8 ACRT aims to expand our servicing business ACRT is a vanilla trust structure as per diagram on right The trust will supplement (not substitute for) our current PDL business, by enabling us to participate in larger inventory PDL opportunities introduced by CLH which CLH or Balbec would otherwise not normally purchase Servicing fees at typical market rates The senior funder, Balbec Capital LP, is an affiliate of Starwood Capital Group, which currently manages $US42 billion of assets globally. CLH s existing firm investment return and collection targets will underpin ACRT s investments ensuring pricing disciplines are maintained. Equity varies but typically 10% in junior note Equity varies but typically 90% in senior and junior notes Page 8

9 Outlook PDL investment commitments of $70m+ as of February FY15 will likely be below FY14 levels consistent with original guidance Steady growth in Collection Services (which forms ~40% of group revenue) expected to continue, re-enforcing our diversified sources of overall earnings growth. Economic environment for collections has been tougher in Q3 than anticipated, but double digit growth in PDL collections for FY15 is still anticipated. FY15 NPAT expected to fall within range of $21 $22m. Page 9

10 Collection House Limited Level 7, 515 St Paul s Terrace, Fortitude Valley QLD 4006 Australia PO Box 2247 Fortitude Valley BC Qld 4006 Adelaide Auckland Brisbane Manila Melbourne Newcastle Sydney

11 Appendix historic PDL collections and written down values Amortisation of PDL investments has since FY06 been applied proportionately with the amount of original debt purchased ( Principal ) which is collected fees/interest accrued to accounts and collected post acquisition is not amortised The table above details relevant PDL collections and amortisation over 12 years. Adjustments in FY06 relate to the adaptation of IFRS standards.