In late morning trade on Thursday the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. At the time of writing, the benchmark index is up 1% to 6,122.8 points.

Four shares that are climbing more than most today are listed below. Here’s why they are charging higher:

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is up 3% to $13.31 following the release of its annual general meeting update. Although the company acknowledges that the outlook is uncertain for the travel industry, it believes it should be able weather the storm until conditions improve. Management also highlighted its cost cutting success. This has resulted in a very lean cost base, which could lead to breakeven at 40% of pre-COVID total transaction volume.

Goodman Group (ASX: GMG)

The Goodman share price has risen 3% to $19.46 following its first quarter update. Management notes that the current global environment has reinforced the consumer need for convenience and heightened the use of technology. This has continued to accelerate the adoption of physical infrastructure necessary to support e-commerce, including warehouse and data centre space. As a result, it delivered first quarter like-for-like net property income growth of 2.9% across its managed partnerships.

Inghams Group Ltd (ASX: ING)

The Inghams share price has surged 13% higher to $3.22. Investors have been buying the poultry company’s shares after the release of its first quarter update. According to the release, poultry volumes sold in the first quarter of FY 2021 increased by 6.2% to 110.9 kilotons compared to the prior corresponding period. This growth was driven by strong demand in Australia and New Zealand.

Scentre Group (ASX: SCG)

The Scentre share price is up 1.5% to $2.37 following the release of its third quarter update. According to the release, the shopping centre operator’s portfolio occupancy was 98.4% at the end of September 2020. Scentre also revealed that it has reached agreements regarding COVID arrangements with a total of 3,187 retailers, representing 89% of the 3,600 retail brands in its portfolio.

More reading

• The Flight Centre (ASX:FLT) share price is soaring after AGM
• Is the Scentre Group (ASX:SCG) share price set to recover after this update?
• Inghams (ASX:ING) share price on watch after Q1 business update
• 5 things to watch on the ASX 200 on Thursday
• Travel shares are flying higher today. Here’s why.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Esports Mogul Ltd (ASX: ESH) share price is shooting higher today as the company announced “world class player experience” for its users on two popular mobile games.

Shares in the company have seen a strong couple of weeks with the Esports Mogul share price rising by 77% since the start of October. Today, the e-sport matchmaker’s shares are trading higher again. The Esports Mogul share price shot up 9.52% to 2.3 cents in early trade and has since retreated, trading up 4.76% at 2.2 cents at the time of writing.

What Esports Mogul does

Esports Mogul is an ASX listed e-sports business that brings together players, game developers and tournament organisers. Its primary operations have traditionally been in Australia and Southeast Asia. However thanks to recent partnerships, the company is expanding into North America.

Mogul offers its clients an advanced e-sports tournament and matchmaking platform. Mogul.gg is the only platform with full automation for a range of major e-sports titles. The company generates revenue by partnering with brands and creating unique sponsorship-driven e-sports experiences for players at no cost to the end user.

Popular mobile games integrated

Esports Mogul announced today it had deeply integrated two of the world’s “most popular” mobile e-sports titles into its online tournament platform.

The games – Clash Royale and Brawl Stars – are both free-to-play multiplayer games. Clash Royale was released in March 2016 and had amassed $1 billion in revenue in less than one year after release. Brawl Stars was released in December 2018.

Furthermore, Esports Mogul has been granted access to a set of application programming interfaces (APIs) that will improve player experience on its platform. These developments will aid streamers developing better content.

Commenting on the announcement, Esports Mogul CEO Michael Rubinelli said:

I’m very excited about the deep integration of Clash Royale and Brawl Stars into the mogul.gg platform. This serves as another proofpoint for us further demonstrating our level of customer obsession and player focus.

More reading

• Why the Esports Mogul (ASX:ESH) share price is down today
• Why the Emerge Gaming Ltd (ASX:EM1) share price jumped 12% today
• The Esports Mogul (ASX:ESH) share price has surged up 57%. Here’s why

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Qantas Airways Limited (ASX: QAN) hasn’t mucked around putting on a massive volume of flights for the New South Wales-Victoria border reopening.

On Wednesday, the NSW government announced the border with its southern neighbour would be reopened on 23 November. From that date, travellers between the states no longer need to quarantine.

After ASX trading closed yesterday, the airline revealed how it would take advantage.

As soon as the border opens, Qantas and its budget brand, Jetstar, will operate 272 flights each week between the states, equating to 48,000 seats. A further 10 flights will be added on 7 December.

The new flights will ferry passengers between Melbourne, Sydney, Ballina, Mildura, Newcastle and Bendigo.

Currently, with COVID-19 border closures in place, Sydney-Melbourne is the only route operating between Australia’s most populous states — with only 10 flights per week.

Before the pandemic, the Sydney-Melbourne route was the second most popular flight path in the world, with only Seoul-Jeju busier.

Qantas domestic and international chief, Andrew David, said the border opening was “fantastic news”.

“November 23 will be a day many people will now be looking forward to. It’s exciting for the family and friends who can finally be reunited after months apart,” he said.

“It’s also great for businesses, and great for getting more of our planes in the air and more of our people back to work.”

Airline	Route	Weekly return flights from 23 Nov	Lead-in one-way fare
Qantas	Melbourne-Sydney	75	From $199
Jetstar	Melbourne-Sydney	42	From $75
Jetstar	Melbourne-Ballina	5	From $97
Qantas	Mildura-Sydney	4	From $229
Jetstar	Melbourne-Newcastle	10	From $64
Qantas	Bendigo-Sydney	5 (from 7 Dec)	From $199

Flying is back, but still not to pre-COVID levels

The restored level of 282 flights is still nowhere near the airline’s pre-coronavirus levels. 

“On a busy day, Qantas and Jetstar would operate more than 100 flights per day between New South Wales and Victoria,” said David.

“During the lockdown, our schedule reduced to as low as one flight a day.”

The Qantas share price had already rocketed 2.24% upwards on Wednesday after the border opening was announced, to hit $4.57.

David praised the NSW government for reopening to Victoria, while criticising the insular attitude of some other states.

“New South Wales has led the way in taking a sensible, risk-based approach to borders that’s supported by what is probably one of the best contact tracing programs in the world,” he said.

“Queensland and Western Australia are unfortunately taking a different approach, which doesn’t seem based on a realistic assessment of risk.”

More reading

• 4 top ASX share picks to buy
• Travel shares are flying higher today. Here’s why.
• Are ASX retail investors ‘dumb money’?
• Why these 7 ASX 200 shares received broker upgrades this week
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Tony Yoo owns shares of Qantas Airways Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Shares in Flight Centre Travel Group Ltd (ASX: FLT) took flight in early trade today after the travel company’s annual general meeting (AGM). The share price went up more than 5% after management conveyed its beaten-down results from FY20 and the strategy going forward.

Highlights from today’s AGM

• In FY20, the company has delivered an underlying loss before tax of $510 million before one-off items, including COVID-19 induced expenses of $339 million. On a statutory basis, Flight Centre delivered a loss of $849 million before tax
• Management highlighted its swift action to stabilise the ship by cutting costs – which has resulted in a very lean cost base – one that could ensure breakeven at 40% of pre-COVID total transaction volume (TTV) 
• $1 billion of available liquidity, due to the $700 million injected by shareholders in April and May
• Management highlighted that before February when the pandemic hit, the company was doing great with underlying profit before tax in the order of $150 million
• Company to focus on the corporate travel unit as it is more profitable than the leisure unit due to its structurally lower cost base
• No guidance will be provided for FY21 due to uncertainty

Strategy going forward

Although the outlook is very much uncertain for the travel industry, Flight Centre will focus on its corporate travel unit as it believes that segment will recover first, ahead of the leisure unit. 

With the cost base slashed significantly, the company says it should be able weather the storm until conditions improve. It will also be able to focus on its strategic investments including Ignite (now 100% owned) and tech businesses TP Connects and WhereTo.

The company also noted that the JobKeeper program it received in Australia and similar schemes in other countries had provided much-needed financial support. In Australia and Canada, these support programs now extend through to the 2021 calendar year. The company said it was likely that further extensions would be required to support struggling travel, aviation and tourism sector businesses and to save jobs.

How the Flight Centre share price has done this year

Although the Flight Centre share price has partially recovered from its lows in March, it has taken a beating this year and is down by 65% YTD.  The share price is currently trading at $13.48 up 4.25%. Its market cap stands at $2.6 billion.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Travel shares are flying higher today. Here’s why.
• Zip and Credit Clear were among the most traded shares on the ASX last week
• These are the 10 most shorted shares on the ASX
• These were the worst performing shares on the ASX 200 in October

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is trading lower on Thursday morning after brokers responded to yesterday’s annual general meeting update.

At the time of writing, the pizza chain operator’s shares are down 1.5% to $85.61.

What was in Domino’s update?

Yesterday Domino’s released a trading update at its annual general meeting which revealed that its same store sales were up 8.4% during the first 17 weeks of FY 2021.

Management didn’t provide any details in relation to where its growth was coming from exactly. However, it did note that all regions have delivered same store sales growth above its 6% medium term target.

Another positive from the update was that management revealed that Franchisee profitability is at record levels across multiple countries. It feels this underpins the health of its store network and expects it to be supportive of future demand for store growth.

Speaking of which, so far in FY 2021, Domino’s has opened 74 new stores. This comprises 38 in Japan, 6 in Australia-New Zealand, and 30 in Europe.

Finally, the company has reiterated its medium term (3 to 5 years) target of same store sales growth of 3% to 6% per annum and organic new store growth of 7% to 9%.

What did brokers think of the result?

According to a note out of UBS, Domino’s delivered an update in line with its expectations. However, it notes that its same store sales growth has slowed over the last 7 weeks.

In light of this and its belief that its shares are expensive, it has retained its sell rating and lifted its price target slightly to $72.00.

Elsewhere, analysts at Goldman Sachs have retained their neutral rating and $83.90 price target on the company’s shares.

While it is currently tracking ahead of its expectations, it isn’t enough for a change of rating just yet due to valuation reasons.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 best performing large caps in 2020
• How to turn $20,000 into $350,000 in 10 years with ASX shares
• Top brokers name 3 ASX shares to sell today
• Why Domino’s, Oil Search, Resolute, & Zip shares are dropping lower

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Scentre Group (ASX: SCG) share price currently trades at more than a 40% discount to its pre-COVID levels. Lockdown measures took a serious toll on retail real estate investment trusts (REITs) like Scentre and Vicinity Centres (ASX: VCX) with factors such as rental disputes and the need to take on more debt weighing heavily on share prices. Could the Scentre Group’s Q3 operational update provide investors with the confidence that retail REITs are getting back on track? 

Scentre Group operational update 

Scentre Group today announced that all 42 Westfield Living Centres continue to remain open and trading with the highest level of health and safety standards implemented. 92% of its retailers’ stores are now open and trading (including in Victoria), with more stores in Victoria expected to reopen over the coming weeks. Customer visits during the September 2020 quarter were 90% of the same time last year across the portfolio (excluding Victoria).

The company’s portfolio occupancy was 98.4% at the end of September 2020. The group has reached agreements regarding COVID arrangements with a total of 3,187 retailers, representing 89% of the 3,600 retail brands in its portfolio. 

Scentre Group has experienced a rapid improvement in its gross rent cash collections for the quarter. Monthly gross rental billings hit a trough back in April and May, falling as much as 28% and 35% respectively. For the September quarter, monthly gross rental billings averaged 85% or $542 million, while October currently sits at 96% or $203 million. 

In terms of retailer in-store sales growth, comparable like-for-like specialty in-store sales (excluding Victoria) were down 1.9% for the September quarter while comparable majors in-store sales were up 1.0%. 

Scentre Group share price higher on update 

At the time of writing, the Scentre Group share price is today trading 2.15% higher at $2.38 following the company’s operational update. Investors are clearly encouraged by seeing the company’s operational metrics recover closer to their pre-COVID levels. Scentre also announced that it has the intention, subject to unforeseen circumstances, to pay a dividend in early 2021 from surplus net operating cash flows received in 2020.

More reading

• Summer is coming, and none too soon for ASX retail landlords
• Why REITs led the pack on the ASX today
• ASX property shares buoyed by latest market data
• The Mosaic (ASX:MOZ) share price comes alive, up 5%
• These beaten-up shares are about to pick up: Moody’s

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Estia Health Ltd (ASX: EHE) share price has dropped lower on Thursday following the release of its first quarter update.

In morning trade the aged care operator’s shares are down over 1% to $1.34.

What happened in the first quarter?

According to the release, the occupancy level of the company’s homes (excluding Victoria) averaged 93.7% during the first quarter and stood at 93.2% on 31 October. Whereas in Victoria, Estia Health’s average occupancy during the quarter was 86.8% and its spot occupancy was 83.2% at 31 October 2020.

This meant that total occupancy averaged 91.3% in the first quarter and stood at 89.7% at 31 October 2020.

In light of this, the company recorded total first quarter revenue of $158.9 million. This includes $0.8 million of temporary funding and $10.9 million of imputed DAP revenue on RAD balances in accordance with AASB 16.

Management explained: “Revenues were impacted by the decline in occupancy experienced in Victoria. In addition, the Group took the decision to cease resident billings at a number of homes during COVID-19 outbreaks in Victoria, and ceased Additional Services billings at all homes in Victoria for 3 months as a result of limitations on the ability to deliver those services during the State-wide lockdown. All homes in Victoria are now billing residents as normal.”

Another negative was that Estia Health experienced a jump in its costs because of the pandemic.

It incurred incremental employee costs due to the impact of COVID-19 of approximately $6 million for the quarter. This comprises $4.4 million in Victoria and $1.6 million in other states.

The majority of the costs were incurred in managing the outbreaks in metropolitan Melbourne at the height of the second wave in its homes at Ardeer, Heidelberg West, Keysborough, and Keilor Downs.

Estia Health has also incurred and continues to incur costs associated with additional Resident Liaison Officers and Infection Prevention Control supervision and training at all homes.

Outlook.

Due to the uncertainty caused by the pandemic, management has been unable to provide guidance at this stage.

It commented: “The scale and duration of the COVID-19 pandemic remain extremely uncertain and the Group is not able to quantify with any degree of certainty at this stage the expected future financial impact of the enduring pandemic, including the impact on revenues, costs or funding support from the Government by way of increased subsidies or grants.”

More reading

• Why BHP, Estia Health, Newcrest, & Starpharma shares are dropping lower

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The National Australia Bank Ltd (ASX: NAB) share price is pushing higher this morning following the release of its full year results.

At the time of writing the banking giant’s shares are up 1% to $18.87.

How did NAB perform in FY 2020?

For the 12 months ended 30 September, NAB reported a 36.6% decline in cash earnings to $3,710 million.

This decline was partly driven by a number of previously announced notable items. Excluding these items, the bank’s cash earnings would have been down 25.9% to $4,733 million in FY 2020.

NAB reported a 1 basis point reduction in its net interest margin (NIM) to 1.77% for the year due to its Markets & Treasury businesses, which felt the impact of holding higher liquid assets. Excluding this, its net interest margin was flat, with the benefits of home loan repricing and lower wholesale funding costs offset by impacts of the low interest rate environment and competitive pressures.

The bank experienced an increase in its expenses in FY 2020. They rose 10.7% including notable items and 2% excluding them. The latter reflects costs associated with the implementation of its strategy refresh, combined with higher technology-related costs, salary increases, and COVID-19 related costs. Management advised that this was partly offset by productivity benefits, lower performance-based compensation, and reduced travel and entertainment costs.

At the end of the financial year, NAB’s group common equity tier 1 (CET1) ratio stood at 11.47%, up 109 basis points from September 2019.

Thanks to this strong balance sheet, the bank was able to declare a final dividend of 30 cents per share. This brings its full year dividend to 60 cents per share, representing a 64% reduction compared with FY 2019. Management advised that this reduction reflects the uncertain outlook for COVID-19 impacts and APRA’s revised dividend guidance, balanced with consideration of its strong capital position.

NAB CEO, Ross McEwan, commented on its result, stating: “Stronger provisions are the right thing to do but have impacted FY20 cash earnings, which are down 25.9% compared with FY19 (ex large notable items). In addition, low interest rates and lower fee income contributed to a decline in revenue. While we are acutely aware of the need for disciplined cost management, costs rose in FY20 as we adjusted to the COVID19 environment and started implementing our strategy refresh announced in April.”

Outlook.

Mr McEwan appears positive on the bank’s future thanks to the progress it is making with its strategy.

He explained: “We are progressing well with our strategy refresh which is creating a simpler, more accountable business, committed to execution. We have embedded a new organisational structure with end-to-end accountability. We are clear about our priorities, and we are focusing on our customers and colleagues to drive sustainable performance over time.”

The chief executive also spoke about the economic outlook. NAB is expecting a gradual economic recovery for Australia.

“Economic activity in Australia has been materially impacted by COVID-19, with GDP falling 7.0% in the June quarter 2020 and forecast to decline 4.7% over the year to December 2020. Recovery is likely to be gradual, supported by stimulatory fiscal and monetary policy combined with expected relaxation of Victorian restrictions and a more complete reopening of state borders,” he said.

“This sees forecast GDP growth of 4.6% over 2021 and 2.9% over 2022, albeit the outlook for the business sector remains highly uncertain and the pace of recovery is likely to be uneven across industries,” he added.

As for NAB, the bank is aiming to improve the resilience of its business and build momentum for recovery from the COVID crisis. And while this will lead to an increase in expenses by 0% to 2% in FY 2021, management believes it is worth the investment.

It commented: “Over time, the successful delivery of our refreshed strategy is expected to result in stronger, safer growth in our chosen businesses, more engaged colleagues and more satisfied customers, a more efficient organisation with absolute costs (excluding large notable items) targeted to be lower over three to five years, and improved, more sustainable shareholder returns.”

More reading

• 5 things to watch on the ASX 200 on Thursday
• ASX 200 finished 2% higher on Tuesday
• Here’s how much Westpac’s (ASX:WBC) new dividend is worth
• Glory days of ASX bank shares are gone: fundie
• What to expect from the NAB (ASX:NAB) FY 2020 result

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Inghams Group Ltd (ASX: ING) share price will be on watch today following the company’s release of a business update.

Let’s take a look and see how the poultry producer tracked for the start of the new financial year.

Business update

For the quarter ending 30 September, Inghams reported a strong return in poultry sales volumes, nearing pre COVID-19 levels.

Core poultry volumes sold in the first quarter of FY21 increased by 6.2% to 110.9 kilotons over the prior corresponding period. The surge in momentum also reflected a 7.5% uplift on the prior three months. The growth was driven in both Australia and New Zealand, despite COVID-19 restrictions in Victoria which saw the Inghams Thomastown plant shutdown.

During the quarter, Inghams continued to reduce poultry production levels due to the pandemic. The company is initiating further cuts in inventory levels by the end of FY21. This will be supported by the additional demand over the Christmas holiday period. So far, total poultry inventory has reduced by $16 million in the first 17 weeks of FY21.

Inghams noticed a slight increase in feed costs, however it said that crop harvest for late 2020 is appearing favourable. Moreover, feed prices are expected to be significantly lower in the second half of FY21, resulting in cost efficiency by Q4.

COVID-19 response

Stage 4 lockdowns in Victoria throughout August and September, and level 2 restrictions in New Zealand impacted Inghams’ facilities. In response, the company managed to navigate around the constraints imposed through operating on a reduced workforce. Customer demand was met while maintaining full operations across all its plants.

Commenting on the impact, Inghams CEO, Mr Jim Leighton, said:

While navigating continued complexity associated with the COVID-19 pandemic in the first quarter of the financial year, we have maintained an unwavering commitment to the safety and employment of our people, while fulfilling our role as an essential service provider to the people of Australia and New Zealand.

The speed and scale of our response, particularly in the second-waves impacting Victoria and Auckland, was made possible by the enormous efforts of our people who worked together to keep the business running to ensure customer demand was met.

Dividend policy review

Management advised that it has reviewed the current dividend policy following the adoption of the new leases on its balance sheet.

The revised dividend policy is expected to have a pay-out ratio of between 60% and 80% of underlying net profit after tax. The increase in the top end of the dividend range is said to provide the board flexibility to determine dividends going forward.

From FY21, Inghams will begin to report its underlying results inclusive of the impact of its leases. It is anticipated that the company will pay an FY21 interim dividend to shareholders in April 2021.

Inghams Chair, Mr Peter Bush, spoke about the new change. He said:

We were pleased to provide shareholders with a fully franked dividend of 14 cents per share in relation to the 2020 financial year, reflecting a payout ratio of 66 per cent of Underlying NPAT pre AASB 16, within our prior target payout range of 60 to 70 per cent. This was particularly important in light of the challenges that many people have faced throughout the COVID-19 pandemic.

About the Inghams share price

The Inghams share price has had a volatile year. Whilst quickly recovering from the March crash, the company’s shares have been on a wild ride since then. The Inghams share price came close to its pre-pandemic highs in July and August this year before commencing another downward trend. Having closed yesterday’s session at $2.85, the Inghams share price is currently 16.67% lower in year-to-date trading.

More reading

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• These are the 10 most shorted shares on the ASX

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Credit Corp Group Limited (ASX: CCP) share price could be one to watch on Thursday following a positive AGM and FY21 performance update. 

About Credit Corp 

Credit Corp is Australia’s largest provider of financial services to the credit impaired consumer segment. It purchases past-due consumer and small business debts from major banks, finance companies, telecommunication companies and utility providers in Australia, New Zealand and the US. It works with customers by adopting a flexible approach to affordable repayment plans and solutions. 

Upbeat AGM and performance update 

Credit Corp’s AGM highlights solid debt buying operational metrics with a strong first quarter. It cites that Australia and New Zealand is tracking to guidance expectation with a step-down in October in-line with reductions in government and private sector support. While the US business is ahead of expectation despite expiry of key support measures such as federal unemployment supplements in July. Its ANZ and US debt buying business delivered a 4% and 34% increase in collections to $100 million and $36 million respectively. 

The business has experienced an improvement in demand and applicant quality in recent months. Application volumes are increasing due to superannuation withdrawal and other support being wound back. New customer approval rates are now at 67% of pre-COVID-19 levels compared with 41% in June. Its gross loan book is stabilising in October 2020 rather than December 2020 as expected. 

Solid start to FY21 

ANZ debt buying has had a strong quarter of collections with a 51% increase in purchasing pipeline. The company sees debt purchasing to rebuild as credit issuers return to market. 

In the US, collections are slightly ahead of expectations despite the expiry of key support measures. There was limited movement in its purchasing pipeline in the US due to absence of further price declines. 

Its consumer lending business is also experiencing volumes ahead of schedule and a stabilising loan book balance. The company sees demand to rebuild as support is withdrawn from Q1. 

The solid start to FY21 has given the business confidence to reaffirm its previous FY21 guidance. This includes NPAT between $60 million to $75 million and a dividend between 45 cents to 55 cents. This compares to the $15.5 million after accounting for the impairment of purchased debt ledger assets and  additional provisioning arising from the impact of COVID-19 in FY20. NPAT before these adjustments were $79.6 million.  

Foolish takeaway

Credit Corp highlighted an ambitious long-term growth target of a Return on Equity (ROE) of 16% to 18% in its AGM presentation. The Credit Corp share price is up more than 200% from its March sell-off lows, however still 50% below its pre-COVID-19 levels. 

More reading

• ASX 200 finished 2% higher on Tuesday
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• Why the Credit Corp (ASX:CCP) share price could soar in 2021

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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