The Motley Fool

Why the Credit Corp share price rocketed 13% higher today

The best performer on the S&P/ASX 200 index on Friday was the Credit Corp Group Limited (ASX: CCP) share price.

After returning from its trading halt the debt collector and receivables company’s shares rocketed 13% higher to $27.27.

Why did the Credit Corp share price rocket higher?

This afternoon Credit Corp announced that it has acquired Baycorp Holdings and its associated entities from Nasdaq-listed Encore Capital Group for a total net consideration of approximately A$65 million.

Baycorp is a large and well-established debt purchasing and debt collection operator across Australia and New Zealand. Its assets comprise a sizeable purchased debt ledger (PDL) book, a PDL collection platform, and agency collection businesses in Australia and New Zealand.

Management advised that some integration of the acquired businesses will be required in to order to deliver pro-forma returns.

The PDL collection platform will be quickly merged with Credit Corp’s existing Australian and New Zealand debt buying business. Whereas the New Zealand agency business will be preserved and enhanced, and the Australian agency operation will be progressively restructured to ensure that it operates sustainably.

Credit Corp’s CEO, Thomas Beregi, believes the acquisition offers an attractive secondary PDL book acquisition and the opportunity to create a large and successful agency business.

He said: “We expect to achieve our targeted investment return on the PDL component of the transaction and see opportunity to scale up our existing agency activities.”

In addition to this, the company updated the market on its guidance for FY 2020.

According to the release, this acquisition has given its full year outlook a major boost as it “will produce earnings growth in the core Australian and New Zealand debt buying business to complement strong growth from the company’s US debt buying and consumer lending segments.”

In light of this, it has revised its net profit after tax growth guidance for FY 2020 to be in the range of 15% to 18%. This compares to its prior guidance of 7% to 10% annual growth.

Also rising strongly on Friday were the Star Entertainment Group Ltd (ASX: SGR) share price and the Super Retail Group Ltd (ASX: SUL) share price on the back of solid full year results releases.

Missed these gains? Then don't miss out on these top shares which have been tipped as market beaters.

Our Top 3 Blue Chip Shares for 2019 – NOW AVAILABLE!

You’re invited! For a limited time, The Motley Fool Australia is giving away an urgent new investment report detailing our 3 TOP BLUE CHIP SHARES to own in 2019.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping 6.5% grossed-up dividend! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!


Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Super Retail Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.