Credit Intelligence eyes 420% rise in FY 2020 profit, declares special dividend

Credit Intelligence (ASX: CI1) is forecasting a 420% increase in its full year 2020 profit compared to FY 2019, with the company also declaring a special dividend of $0.0005 per share.

Focused on providing personal insolvency management services and credit to people and small and medium enterprises, Credit Intelligence said there have been little impact to its operations from COVID-19.

Credit Intelligence managing director Jimmie Wong said the special dividend reflected the company’s “strong ongoing financial performance” in Hong Kong and its close to target earnings in Singapore.

“This special cash dividend is an appropriate share of surplus earnings and will be appreciated by many of our shareholders at this difficult time,” he added.

For FY 2020 ending June, Credit Intelligence anticipates revenue of $12 million – up from $6 million in FY 2019.

Meanwhile, profit after tax is forecast at $2.6 million – a 420% rise on the previous corresponding’s period’s $500,000.

Underpinning this is the company’s operations in Hong Kong. Credit Intelligence said earlier civil unrest in the country, combined with COVID-19, will result in further growth of its personal insolvency management services.

When court sittings resume, Credit Intelligence expects an “accelerated rate” of case appointments.

At its Singapore office, despite government restrictions, Credit Intelligence anticipates it will meet its profit guarantee for the 12 months to end of September 2020.

Credit Intelligence operations

In Hong Kong, Credit Intelligence’s main business includes providing bankruptcy admission services and individual voluntary arrangement proposal consultancy and implementation services.

The company acts for all Hong Kong’s leading banks and financial institutions and secures regular referrals from these banks and institutions to assist with defaulting personal clients.

Last year, Credit Intelligence expanded into Singapore by acquiring 60% of two profitable finance companies – ICS Funding and Hup Hoe Credit.

In addition to operations in Singapore and Hong Kong, Mr Wong previously told Small Caps the company was looking to take advantage of Australia’s current economic climate.

Mr Wong added the company’s operating model is designed to perform better under adverse economic conditions.