Debt buyer and collection agency Collection House reported modest increases in revenue and profit during the December half but the company is looking forward to growth in earnings from its recent New Zealand acquisition.
In January, Collection House announced a move into the New Zealand market with the acquisition of Receivables Management (NZ) Ltd.
Collection House paid $13.4 million for the company, which has around NZ$22 million of expected future recoveries over the next six years. It is expected to generate earnings before interest and tax of around A$2.7 million in 2019/20.
Collection House chief executive Anthony Rivas said in a statement yesterday: "We look forward to working with our new colleagues at RML to build on their success in New Zealand"
Collection House made a net profit of A$8.5 million for the six months to December - an increase of 3.2 per cent over the previous corresponding period. Revenue rose 4.1 per cent to $66 million.
Earnings before interest and tax for the company's biggest business, purchased debt ledgers, rose 18.1 per cent to $14.7 million. A weaker result in the collection services division pulled the overall result down.
The company outlaid $36.6 million on debt ledger acquisitions during the half, compared with $35.9 million in the previous corresponding period.
The face value of its purchased debt ledgers rose from $1.7 billion to $2.1 billion year-on-year and its arrangement book (where debtors have agreed to a repayment schedule) stands at a record $431 million.