- Insolvency agency Credit Intelligence (CI1) expects to double its revenue and more than quadruple its profit by the end of FY20, despite the economic pressure of COVID-19
- The credit company confirmed its guidance this morning and announced a special dividend for shareholders
- CI1 will pay out $0.0005 for every share on offer
- Credit Intelligence also says its Hong Kong branch remains open for business, even amid the ongoing pandemic and earlier civil unrest
- However, its Singaporean operations will be forced to shut up shop as further COVID-19 restrictions see non-essential traders close
- On the back of the news, CI1 shares are up 2.94 per cent to trade for 3.5 cents per share
Insolvency agency Credit Intelligence (CI1) expects to double its revenue and more than quadruple its profit by the end of FY20, despite the economic pressure of COVID-19.
By the end of June, Credit Intelligence forecasts it will net $12 million in revenue (twice the $6 million brought in last financial year). It’s also predicted to deliver approximately $2.6 million in profit after tax, a 420 per cent increase on the previous year’s $0.5 million.
The credit company released the update on Monday morning, which confirmed its previous financial guidance and announced a special dividend for its shareholders.
Special dividend from “surplus earnings”
CI1 will pay out $0.0005 for every share on offer under the new scheme.
“This special dividend reflects CI1’s strong ongoing financial performance in Hong Kong and close to target earnings in Singapore,” said Credit Intelligence Managing Director and CEO Jimmie Wong.
“[It’s] an appropriate share of surplus earnings and will be appreciated by many of our shareholders at this difficult time,” Jimmie continued.
Operations in Hong Kong
In the same market announcement, Credit Intelligence also touched on operations at its Hong Kong branch.
The debt restructurer hasn’t had to close during the COVID-19 pandemic, with all staff still working on site. To mitigate any risks, however, social distancing and protective equipment are in play.
In fact, the company believes the earlier civil unrest in Hong Kong, coupled with the ongoing pandemic, will help grow its insolvency business.
For now, however, this growth remains on hold; all of Hong Kong’s law courts are closed until the end of April, and won’t be able to issue any new cases until hearings resume.
As a result, Credit’s Hong Kong operations have been unable to provide concrete earnings guidance. Many of its figures are determined by the insolvency cases it has under management.
Singapore lenders to shut
Contrary to the news in Hong Kong, Credit Intelligence’s Singaporean lenders will now have to shut down as stricter COVID-19 regulations come into play.
Last Friday, the Singaporean Government further restricted social gatherings and business operations, ensuring only core companies like supermarkets and pharmacies remain open.
The company’s subsidiary, licensed money lender Hup Hoe Credit, is considered a non-essential business. As a result, Hup Hoe won’t be able to lend to customers from April 7.
At present, these restrictions will stay in place until May 4.
Notwithstanding, the lender still expects to meet its profit guarantee up until September 30. Profit generated after-tax by Hupe Hoe in February also beat CI1’s expectations.
On the back of the news, CI1 shares are up 2.94 per cent to trade for 3.5 cents per share at 12:33 pm AEST.