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Collection House’s profit soars 21% as debt collection pays

Debt collection agency Collection House haave announced a 21 percent higher net profit for the last financial year as calls for debt collection post-GFC soar.

Collection House Debt CollectionCollection House Limited today announced a 21 percent increase in Net Profit After Tax (NPAT), an 18% annual dividend lift, and said it had negotiated an improved bank debt facility that would strengthen cash flows and fund business growth.

Collection House has also improved its forward pipeline of debts to be collected in the coming quarters, suggesting that broadly businesses are suffering from unpaid debts and being forced to call in agencies such as Collection House to recover the bad debts.

Outgoing Managing Director and Chief Executive Officer of Collection House Tony Aveling said the results reinforced Collection House’s ability to consistently improve profitability while managing changing market conditions.

“For much of the year, market prices for debt were unrealistically high, some clients delivered less quality revenue following a reduction in loan originations and resulting placement volumes, and Government economic stimulatory measures had largely ceased,” Mr Aveling said.

“To offset this, we successfully grew quality long-term revenues and lowered the risk profile of the business by building our Purchase Debt Arrangement Book by 21 percent. We exercised restraint with debt purchasing, increased our productivity, controlled costs, and also sought new revenue opportunities.”

Mr Aveling said the outlook for Collection House was very positive.

“The major contributor to increased profitability should be the strong forward flow pipeline which will allow us to drive more revenue through a relatively fixed cost base,” he said.

Activity within the debt collection sector continues to improve, with Collection House rival Credit Corp also expecting to report a considerable upswing in profitability in the upcoming year, as reported in the SMH. Businesses are encouraged to get on top of their invoices to avoid these debt collection sharks circling.

Tips for handling cash flow problems can be found in our article “Cash flow survival tips“.

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David Olsen

David Olsen

An undercover economist and a not so undercover geek. Politics, business and psychology nerd and anti-bandwagon jumper. Can be found on Twitter: <a href="http://www.twitter.com/DDsD">David Olsen - DDsD</a>

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