The Credit Corp Group Limited (ASX: CCP) share price looks set to surge higher this morning after the company provided a market update and entered a trading halt before market open.
What did Credit Corp announce?
Credit Corp increased FY19 investment guidance including:
- PDL acquisitions: Upgraded guidance by $5 million to $200 million – $215 million
- Net lending: Upgraded guidance by $5 million to $55 million – $60 million
- NPAT: Guidance maintained at $69 million – $70 million
- EPS: Guidance maintained at 144 – 146 cents per share
Management said the increased investment in FY19 is in the US and Consumer Lending segments as it builds capacity for further growth. This was highlighted by the following:
- Operational capacity will grow substantially in the US over the balance of the year and in early FY20.
- Increasing productive and financial capacity positions Credit Corp to further invest as opportunities arise across all segments.
What else did Credit Corp say in its update?
The company announced a fully-underwritten Institutional Placement to raise approximately $100 million and a non-underwritten Share Purchase Plan to retail shareholders in Australia and New Zealand which aims to raise $10 million.
Proceeds from the equity raise will enhance the strategic position of the company, accelerate the execution of its strategic expansion initiatives and provide the company with additional balance sheet flexibility.
Is Credit Corp in the buy basket?
The Credit Corp share price is up 18.4% so far this year as it has retraced the significant losses recorded in 2H 2018 as it fell 22% from August onwards to close the year at $18.76 per share.
In terms of the Financials sector, it's probably an option worth considering given the turbulence that the banks and insurers continue to see in the wake of the Royal Commission and potential change of Federal Government following the May election.
For those who are looking for more growth than cash flow, I'd suggest checking out this top-rated stock in a booming industry could give you the edge as a growth investor.
