Collection House Profit Drops Despite Recent Turnaround

Australian debt purchaser and collector Collection House, Ltd. announced results for its fiscal year 2007, marked by a decrease in profit and debt purchasing activity for the year, but a surge in performance in the second half.

Brisbane, Australia-based Collection House said that net profits fell 37 percent to $3.1 million (USD) for its fiscal 2007 year ending June 30, from $5 million in the previous fiscal year. Revenues increased 9 percent to $85.7 million.

The company said that $2.5 million of its after tax profits came in the second half of the fiscal year, a 370 percent increase in profits from the first half.

Collection House said in a press release that revenues and profits were down in the first half due to “a relatively low level of debt purchases,” but that it had stepped up its debt purchasing and collection business in the second half.

"[Debt portfolio] purchases over the past year totaled $23.7 million, but of this $10.6 million occurred in June, which was too late to have any significant impact on revenues. Given new forward flow contracts already in place, purchases should total at least $44.2 million in the year ahead," said Tony Aveling, managing director and CEO, in the release.

Collection House, publicly traded on the Australian Securities Exchange under the symbol CLH, saw its stock price dive in 2006 following accounting changes and poor results. Shares traded as high as $2.10 (Australian Dollars) in 2004. It was trading at $0.805 Wednesday.