- Debt collector Credit Corp (CCP) has joined the list of companies scrapping their earnings guidance today
- The company said spreading COVID-19 pandemic could impact customers’ economic conditions and their ability to make repayments
- As such, Credit Corp said its earnings for 2020 are too uncertain to predict
- Nevertheless, the company said it has felt no material impacts to its own operations from the coronavirus just yet
- Shares in Credit Corp are trading slightly lower at lunchtime, currently 0.4 per cent down and worth just over $10 each.
Debt collector Credit Corp (CCP) is following the footsteps of many other ASX 200-listers today by completely withdrawing its 2020 earnings and investment guidance.
Credit Corp was expecting to pull in between $81 million and $83 million in net profit after tax for the 2020 financial year, but this figure is no longer certain.
Companies operating in the financials sector have taken some major collateral damage from the COVID-19 as central banks around the globe slash interest rates.
While lowered interest is expected to stimulate the economy, bankers and investment companies prefer interest rates to be high. As a debt buyer, Credit Corp is no exception.
Shares in the company have lost almost three-quarters of their value over the past month. On February 20, shares sat pretty at an all-time high of $37.83 each. Today, they are worth just $10.
Nevertheless, despite the poor share price performance, Credit Corp said it has felt “no material impacts” in operating results from the coronavirus pandemic over the past month and it’s been business as usual despite the spreading virus.
However, Credit Corp admitted to shareholders that the near-term future looks shaky.
The company said the potential exists for increased restrictions in the availability of its workforce. Moreover, the economic conditions of its customers are a major concern; should customers’ economic situation deteriorate too harshly, they will no longer be able to make repayments, directly impacting Credit Corp’s cash flow.
As such, the company said the severity of these potential impacts is uncertain, so the company’s guidance has been scrapped.
Credit Corp shares quickly fell into the red within the first half-hour of trade, but a comeback in the financial sector today has pushed the company back towards green territory. At 12:04 pm AEDT, shares in Credit Corp are marginally lower by 0.4 per cent, currently worth $10.07 each.