Another Australian Debt Collector Lowers Earnings Forecast

Australia’s listed debt collection sector suffered another blow yesterday after Brisbane’s Collection House lowered its earnings forecast for the second time in three months.

Blaming “lower revenue than expected”, Collection House said its net profit for the year to June 30, 2003, was expected to range from $8 million to $9 million, well down on its April prediction of $12 million to $13 million and last year’s annual profit of $18.7 million.

But newly reappointed chief executive John Pearce was confident of a “solid earnings performance in the forthcoming year”, thanks to back office savings and recent strategic savings.

Collection House’s shares slumped 13c to $1.18. This comes in the wake of the slide in the share price of listed rival Baycorp Advantage in the past six months, largely due to Baycorp’s problems with a $300 million portfolio of debts of Telstra customers.

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