COLLECTION HSE Collection House Limited Licensed Commercial Agent ABN 74 010 230 716 ACL 388442 Level 12 100 Skyring Terrace Newstead QLD 4006 PO Box 2247 Fortitude Valley BC QLD 4006 Telephone 61 7 3292 1000 Facsimile 61 7 3414 7525 www.collectionhouse.com.au Collection House Limited |
ASX Half Year information - 31 December 2016 |
Lodged with the ASX under Listing Rule 4.2A. |
This information should be read in conjunction with the |
30 June 2016 Annual Report |
Contents | Page |
Results for announcement to the market | 2 |
Directors' report | 3 |
Auditor's independence declaration | 6 |
Income statement | 7 |
Statement of comprehensive income | 8 |
Balance sheet | 9 |
Statement of changes in equity | 10 |
Statement of cash flows | 11 |
Notes to the financial statements | 12 |
Directors' declaration | 21 |
Independent auditor's review report to the members | 22 |
% | $'000 | |||
Revenue from continuing operations | Up | 2.3% | to | 66,040 |
Profit / (loss) from continuing activities after tax attributable to members (Appendix 4D item 2.2) | Down | (1.5%) | to | 8,189 |
Net profit / (loss) for the period attributable to members (Appendix 4D item 2.3) | Down | (1.5%) | to | 8,189 |
Dividends / distributions (Appendix 4D item 2.4) | Amount per security | Franked amount per security |
Current period | ||
Final dividend (year ended 30 June 2016 - paid 21 October 2016) | 3.9 | 3.9 |
Interim dividend (year ended 30 June 2017 - to be paid 31 March 2017) | 3.9 | 3.9 |
Previous corresponding period | ||
Final dividend (year ended 30 June 2015 - paid 16 October 2015) | 4.7 | 4.7 |
Interim dividend (year ended 30 June 2016 - paid 1 April 2016) | 3.9 | 3.9 |
Key Ratios | 2016 | 2015 |
December | December | |
Basic earnings per share (cents) | 6.1 | 6.3 |
Diluted earnings per share (cents) | 6.0 | 6.2 |
Net tangible assets per share (cents) | 109.1 | 104.5 |
Return on Equity (%) | 4.4 | 4.8 |
Refer to Directors' Report - Review of operations and financial results
Explanation of dividends (Appendix 4D item 2.6)Refer to Directors' Report - Dividends
Dividend Reinvestment Plans (Appendix 4D item 6)During the period, $1.62m was raised under the Collection House Limited (Group) Dividend Reinvestment Plan (DRP). The DRP will not be active in respect of the interim dividend for the period to 31 December 2016.
DIRECTORS' REPORTThe Directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Collection House Limited (the Company) and the entities it controlled at the end of, or during, the half-year ended 31 December 2016.
DIRECTORSThe following persons were Directors of the Group during the whole of the financial period and up to the date of this report, unless stated otherwise:
Kerry Daly Chairman (Non-Executive)
Philip Hennessy Director (Non-Executive)
Leigh Berkley Director (Non-Executive) (Appointed 1 July 2016)
Lev Mizikovsky Director (Non-Executive) (Appointed 1 July 2016, Resigned 30 January 2017)
Julie-Anne Schafer Director (Non-Executive) (Resigned 4 January 2017)
David Liddy Chairman (Non-Executive) (Resigned 4 November 2016)
David Gray Director (Non-Executive) (Retired 5 August 2016)
PRINCIPAL ACTIVITIESThe principal activities of the Group during the period were the provision of debt collection services and receivables management throughout Australasia and the purchase of debt by its special purpose subsidiary Lion Finance Pty Ltd. There were no significant changes in the nature of the activities of the Group during the period.
1H FY2017 HIGHLIGHTSProfit before tax for the half year was $12.2 million (1H16: $11.4 million)
Earnings per share (EPS) 6.1 cents (1H16: 6.3 cents)
Shareholders equity was $184.8 million (30 June 2016: $180.3 million)
Interim fully franked dividend of 3.9 cents to be paid 31 March 2017 (1H16 3.9 cents fully franked)
Sales initiatives have delivered new clients to commence from Q3, including Cash Converters, Transurban and eBay
Implementation of world class 'Interactive Intelligence' call centre technology has boosted collector productivity through greater functionality
Targeted training, including scripting, is reducing the time taken for inexperienced collectors to become productive and confident
PDL pricing competitive but rational, with $52 million in PDLs committed and full year estimate $65 million
FY2016 $0.5 million unfavourable foreign income tax adjustment taken up in December 2016 half-year results
The consolidated Net Profit After Tax (NPAT) was $8.2 million for the six months to 31 December 2016 ($8.3 million 31 December 2015). Total revenue for the Group was $66 million, an increase of 2.3% compared to 31 December 2015.
A one-off tax adjustment of $0.5 million relating to our Philippine operations contributed to a higher than anticipated tax expense in the period under review.
Total employee numbers across Australia and New Zealand now stand at 730, compared to 802 in the previous corresponding period. An additional 91 employees are based in the Philippines.
Looking ahead, the focus remains on performance and productivity enhancement and the implementation of further cost savings and sales initiatives identified since July 2016.
Key Financial Results - by Segment - Reviewed ($'000) | ||||||
Collection Services | Purchased Debt Ledgers | Consolidated | ||||
1H 2017 | 1H 2016 | 1H 2017 | 1H 2016 | 1H 2017 | 1H 2016 | |
$ '000 | $ '000 | $ '000 | $ '000 | $ '000 | $ '000 | |
Revenue | ||||||
Sales | 33,577 | 28,245 | 33,577 | 28,245 | ||
Interest income | 32,306 | 36,302 | 32,306 | 36,302 | ||
Total segment revenue | 33,577 | 28,245 | 32,306 | 36,302 | 65,883 | 64,547 |
All other segment revenue | 157 | 5 | ||||
Consolidated revenue | 33,577 | 28,245 | 32,306 | 36,302 | 66,040 | 64,552 |
Results | ||||||
Segment result | 4,960 | 4,963 | 13,013 | 12,119 | 17,973 | 17,082 |
Interest expense & borrowing costs | (2,865) | (3,089) | ||||
All other segment expenses | (2,923) | (2,610) | ||||
Profit before income tax | 12,185 | 11,383 | ||||
Income tax expense | (3,996) | (3,068) | ||||
Profit for the half-year | 8,189 | 8,315 | ||||
Collection Services exhibited strong revenue growth in 1H17, up 19% to $33 million on pcp. This was driven by productivity improvements gained through enhanced processes and the introduction of the new contact centre technology; resulting in improved performance on behalf of our clients and a subsequent increase in the volume of accounts being referred.
Additionally, client panel performance improved overall, realising increased account placements in our client allocations. The newly established dedicated sales force has successfully contracted three public companies at the end of 1H17, including Transurban, Cash Converters and eBay.
One-off costs incurred in the half-year to generate productivity and efficiency gains have temporarily crimped operating margins; however this has enabled the elimination of duplicated roles, streamlined collector's workflow and enhanced functionality by the application of voice analytics and real-time call monitoring.
Purchased Debt Ledgers (PDL)PDL collections were down 11.9% to $52.3 million. In response to this, a revised PDL operating model is progressively being implemented, including a re-engineering of processes, roles and training, resulting in modified collector behaviour that is more appropriately aligned with the interests of the company. Similarly, an end-to-end review of PDL legal processes means that we now take a "firmer but fair" position with customers who refuse to meet their obligations, generating an increase in the pool of actionable accounts.
Although PDL investments of $52.1 million were committed for the year to 30 June 2017, cash settlements of only $26.1 million have been effected during the period to 31 December 2016. This has resulted in a 'lag' in collections in the half-year, implying a slightly higher amount of collections in the second half of FY17.
44,000 accounts with face value of $319 million are under active repayment arrangements as at 31 December 2016.
DIVIDENDSThe directors recommended payment of an interim fully franked dividend of 3.9 cents per fully paid ordinary share (2016 interim - 3.9 cents fully franked) to be paid on 31 March 2017.
EARNINGS PER SHAREBasic earnings per share for the financial half year were 6.1 cents (2015 - 6.3 cents): a decrease of 3.5%.
Collection House Limited published this content on 21 February 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 09 March 2017 11:15:11 UTC.
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