Credit Intelligence posts 384% increase in full-year net profit

Credit Intelligence CI1 ASX financial revenue 2020
Credit Intelligence has declared a $0.0005 per share dividend on the back of revenue and profit growth.

Financial services provider Credit Intelligence (ASX: CI1) has reported significant jumps in revenue and profits for the 12 months ended 30 June and also declared a dividend of $0.0005 per share.

The company today released its preliminary final report for the year, announcing a 125% increase in revenue to $13.6 million while net profit jumped 384% to $2.54 million.

The revenue result compares to $6.05 million reported in the 2019 financial year and includes a 22% increase in revenue from the group’s Hong Kong business.

Expenditure rose over the year from $5.3 million to $9.4 million but these increases were mainly attributable to the operating costs of two new Singapore businesses that were consolidated into the group – ICS Funding and Hup Hoe Credit.

A one-off consultancy fee of almost $195,000 was also attributable to the acquisition of Hup Hoe Credit and equity fundraising.

The group had about $3.06 million cash on hand at the end of June with a portion earmarked for its planned expansion into Australia and Singapore.

Acquisitions adding to financial performance

With existing bases in Hong Kong and Singapore, the lender recently entered the Australian credit market with the completed 60% acquisition of Sydney-based debt restructuring firm Chapter Two.

Given the transaction was completed on 1 July, no results from Chapter Two are included in these full year results which ended 30 June 2020.

However, the results did reflect the 61% acquisition of Singaporean credit financier Hup Hoe Credit which occurred in late 2019 (within the FY20 financial year), as well as full year results from ICS which was acquired on 28 June 2019.

COVID-19 impact

Credit Intelligence confirmed COVID-19 had little impact (with just a temporary suspension of operations in Singapore) and the pandemic’s ensuing economic downturn has been considered more a benefit than a burden to the business.

“COVID-19 will have limited impact on the Hong Kong operations and will potentially increase business in the years to come,” the company forecast.

It also said its core business of bankruptcy administration and individual voluntary arrangement “continues to trade well in the current social and political unrest in Hong Kong”.

The company added that its acquisition of Chapter Two “could bring up business opportunities” in Australia as well as provide positive results in the next financial year.

It said it remains committed to expanding its operations in Australia in credit funding – including a “larger loan and mortgage business” – as well as a “substantial” credit management business in Hong Kong.

Dividend declared

Credit Intelligence directors have declared an unfranked dividend of $0.0005 per share, to be paid on 20 November 2020.

The dividend is funded from the retained earnings of the group’s operating subsidiary in Hong Kong.

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