Credit Corp Group Limited
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CCP Details
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Beaten the estimates: Credit Corp Group Limited (ASX: CCP) stock rose 13.1% on August 02, 2016 after the company reported a solid FY 2016 results. CCP has reported 19% growth in revenue due to a strong increase in PDL collections, combined with significant growth in the loan book. Moreover, CCP has delivered a 20% rise in NPAT to $45.9 million beating the guidance of NPAT earlier estimated in the range of $44 - $45m. This increase was mainly due to the growth from core domestic debt buying and significantly higher earnings from the consumer lending business. The earnings per share grew 19% to 98.4 cents beating the estimate of 95 - 97 cents. CCP has done an investment of $287.0 million in FY 16 to sustain growth. Additionally, CCP has given positive outlook for all the businesses and issued NPAT growth guidance of 13 to 18%. On the other hand, CCP stock has already risen 18.52% (as on July 29, 2016) in the last six months.
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Recommendation: We believe that the stock is “Expensive” at the current price of $15.05 –, and would review the stock at a later date.
FY 16 Financial Performance (source: Company Reports)
GWA Group Ltd
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GWA Details
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Incurring restructuring costs: GWA Group Ltd (ASX: GWA) stock rose 3.3% on August 02, 2016. Recently, Tim Salt, the Chief Executive Officer of the Group has taken the additional role of Managing Director, effective from July 01, 2016. Meanwhile, the group’s dispute with Carrier Air Conditioning, Carrier Corporation and Others related to Brivis Climate Systems has been resolved and an immediate net payment of $2.8 million to GWA has been agreed upon. This payment would be reflected as part of discontinued operations in GWA’s FY16 accounts. On the other hand, GWA already reported restructuring expenses of $37 million during the first half of 2016 and the stock fell over 9.4% in the last three months given the challenging housing condition in Australia (as on August 01, 2016).
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Recommendation: We give an “Expensive” recommendation on the stock at the current price of $2.20–
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