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COLLECTION HOUSE LIMITED (CLH)

COLLECTION HOUSE LIMITED (CLH)

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General Information
Company Name: Collection House Limited
Stock Code: CLH
Website: www.collectionhouse.com.au
GICS Sub-Industry: Diversified Commercial & Professional Services
Market Cap ($M): 88
Equiv. Shares (M): 108

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 0.810 $ 0.810 $ 0.810 $ 0.810 $ 0.820 1,234 $ -0.010  -1.220 %

Current Broker Consensus Recommendation more
Recommendation: Buy
Recommendation Date: 24th Feb 2012
12 Month Target Price (average): $0.94
Brokers Surveyed: 1

Company Overview

Business Description:
Collection House Limited (CLH) is an Australian receivable management provider, operating in Australia and New Zealand. CLH’s core businesses include: Debt Purchasing; Commission Collections; Receivable Management; and Specialist Services. In 2010, CLH and its two subsidiaries, Lion Finance Pty. Ltd. (Lion Finance) and Midstate Credit Management Services Pty. Ltd. (Midstate), have obtained Australian Credit Licenses under the National Consumer Credit Protection Act and the National Credit Code.

Strategy Analysis:
CLH's strategy for growth includes acquiring a greater share of the debt collection outsourcing, ledger purchasing and credit reporting markets. Management has identified an increasing emphasis by clients on the protection of their brand. CLH is addressing this through increased focus on business conduct and adhering to ethical and compliant debt collection. Collection House had identified purchased debt as the key growth area in debt collection and is the biggest buyer of impaired debt in Australia and New Zealand.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2011  A 10.1 10.3 13.2 7.0 6.1 8.4 100.0
2010  A 8.9 9.1 23.0 7.6 5.8 8.4 100.0
2009  A 7.2 7.4 -49.3 6.3 4.9 10.6 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2009 A 2010 F 2011 F 2009 A 2010 F 2011 F 2009 A 2010 F 2011 F
Brambles (BXB) $9,952 M -0.1010 0.1983 0.2142 20.0358 16.7206 13.7705 0.0387 0.0402 0.0446
Collection House (CLH) $89 M 0.1318 -- -- 7.9612 -- -- 0.0744 -- --
Downer EDI (DOW) $1,468 M 0.1845 -0.4179 0.1825 5.2350 8.9929 7.6051 0.0000 0.0058 0.0407
Mineral Resources (MIN) $1,791 M 0.2929 0.0916 0.3307 11.2023 10.2627 7.7125 0.0433 0.0488 0.0648
Transfield Services (TSE) $1,040 M -0.0759 -0.1702 0.4191 9.6409 11.6183 8.1871 0.0714 0.0578 0.0700

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
CLH 0.57 7.86 0.82 -- 0.73
Market 1.12 11.1 0.96 2.31 2.55
Sector 0.67 9.99 1.03 0.83 0.51

Directors
Name Position Start Date
Mr Anthony (Tony) Robin Aveling -- 25 May 2000
Mr Matthew Thomas Chief Executive Officer,Managing Director 31 July 2010
Mr Dennis George Punches Deputy Chairman 17 July 1998
Mr David Paul Liddy Non-Executive Chairman,Non-Executive Director 27 March 2012
Mr Kerry John Daly Non-Executive Director 30 October 2009
Mr Anthony (Tony) Francis Coutts Non-Executive Director 17 September 1998
Mr David Michael Gray Non-Executive Director 28 June 2011
Mr Barrie Adams Non-Executive Director 03 December 2002

Management
Name Position
Adrian Ralston Chief Financial Officer
Michael Watkins Company Secretary
Kylie Lynam General Manager - Human Resources and Corporate Services

Substantial Shareholders
Holding Name
11,765,538 (12.09%) J M Pearce
9,997,798 (10.27%) Trans Tasman Collections Investments Pty Ltd
6,067,827 (6.23%) Lev Mizikovsky and Ankla Pty Ltd
19,101,266 (19.62%) DENNIS GEORGE PUNCHES as trustee for the DG Punches Revocable Trust
5,178,054 (5.32%) HSBC Custody Nominees (Australia) Limited

Calendar of Events
Date Event
21 February 2013 Report (Interim)
21 September 2012 Report (Annual)
23 August 2012 Report (Prelim)
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