Collection House upgrades earnings

The receivables management company Collection House will report a substantial increase in earnings for the December half. In a statement to the Australian Stock Exchange yesterday, the company said net profit would be between $5.3 and $5.5 million, compared to $3.4 million in the previous corresponding period.

Earlier guidance was for a 30 per cent increase in net profit but now the company is on track to report a 55 per cent increase.

In a statement, Collection House chief executive Tony Aveling said the group had been conservative in its approach to buying debt portfolios because of concerns about rising unemployment.

As a result, revenue for the half, expected to be between $52 and $53 million, will be slightly lower than the previous corresponding period.

Aveling said the lift in earnings came from a reduction in debt and a "tight rein on expenses".

The company recently secured an increase in its bank facility and has available funding of $22 million to buy debt.

Aveling said "collectability" was improving in line with a better job market and rising consumer confidence.