Credit Corp’s Share Price Dips after Company Enters Trading Halt

Yesterday, Credit Corp Group Limited [ASX:CCP] entered a trading halt, ahead of its market update announcement.

Before the trading halt, Credit Corp’s share price was trading at $22.19.

At the time of writing shares are trading 1.35% lower to $21.89.

The Australian debt collector announced a fully underwritten Institutional Placement to raise close to $100 million, as well as a non-written Share Purchase plan (SPP) to shareholders in Australia and New Zealand to raise around $10 million, jointly known as the ‘Offer’.

Proceeds from the offer are set to improve Credit Corp’s strategic position, fast track its expansion initiatives as well as adding more extra balance sheet flexibility.

Placement issue price is $20.45, a 7.8% markdown of the closing price on 29 March 2019.

Ideally shareholders want to see a stock with the best chance of rising gradually over time…

Which is something Credit Corp, and any stock really, could have the potential to do. But if it was as easy as seeing whether a company’s share price is moving higher or lower — everyone could be an expert.

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Credit Corp’s 2019FY market update

Despite decreased investment over the last two years, Australian and New Zealand core debt buying operation is still going strong, with cash collections seeing similar levels of that in the 2018 financial year.

Credit Corp has also upheld its compliance and sustainability metrics, putting it in a spot to take advantage of a correcting market.

The Group also saw increases to acquisitions and net lending under the 2019 financial year investment guidance, concerning its Purchase Debt Ledger (PDL).

Credit Corp’s share price 2019 outlook

Credit Corp is on target to deliver strong growth in earnings this year and more investment, as debt capacity places the Group for further growth.

Credit Corp’s CEO Thomas Beregi commented on the offer:

We are witnessing very favourable market conditions for Credit Corps business in Australia and the opportunity in the US continues to be increasingly attractive. Today’s equity raising provides the Group with flexibility and liquidity to take advantage of these opportunities, further bolstering the outlook for the business over the medium term.’

Investors could be likely to expect some medium-term improvements to Credit Corp’s share price, despite today’s dip.

Regards,

Ryan Clarkson-Ledward,
For Money Morning

PS: In this just released report, Matt Hibbard shows you his top five dividend picks for 2019. Read more about it here and claim your copy today for free.


Ryan Clarkson-Ledward is one of Money Morning’s junior analysts. Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects. Ryan’s primary focus is assisting Sam Volkering with background research and insight for readers by dissecting the latest events affecting the world. Working closely with Sam, they explore the latest in small-cap and technology stocks as well as cryptocurrency opportunities. You can find Ryan’s contributing research, developments, and supporting information across several e-letters, including:


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