Australian Debt Collector Sees Good Times In The Bad Times

Difficult economic conditions often spell good news for the debt collecting industry, Collection House Ltd chairman Dennis Punches said today.

Speaking at the first annual general meeting of the accounts receivable business, Mr Punches said Collection House had strength in the balance sheet to achieve a momentum that would last for years.

Mr Punches, the former chairman of the US debt collector Payco American Corp for 26 years, told shareholders debt collecting agencies could grow during economic downturns.

"I have lived through three major hiccups in the US/global economy - I don't like the word recession," Mr Punches said.

"During these events my previous company had its greatest period of growth.

"The peaks and valleys of our economic cycle are very necessary ingredients for our existence."

He said a company such as Collection House acted as a catalyst in the life cycle of a credit economy.

"Manufacturers, retailers and consumers all must function evenly in a perfect economy but if they don't, and they rarely have, they get out of sync," Mr Punches said.

"One can't pay the other in a timely manner, everybody gets worried and confused."

That was where Collection House came in, acting as a catalyst which either sped up or slowed down the reaction without becoming a part of it, Mr Punches said.

The Brisbane-based company reported a net profit of $A9.3 million ($US4.59 million), 12 per cent above the prospectus forecast of $A8.3 million ($US4.1 million), from an operating income of $A56 million ($US27.64 million).

When it floated last October 4, it raised $A29.7 million ($US14.66 million) though the public issue price of $1.

Collection House shares were steady at $4.25 today.