ASX:CLH

Stock Analysis Report

Executive Summary

Collection House Limited provides debt collection services in Australia and New Zealand.

Rewards

Trading at 62.5% below its fair value

Revenue is forecast to grow 4.13% per year

Earnings grew by 17.5% over the past year

Pays a high and reliable dividend of 7.59%

Risk Analysis

Earnings are forecast to decline by an average of -0.9% per year for the next 3 years



Snowflake Analysis

6 star dividend payer and undervalued.

Share Price & News

How has Collection House's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CLH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.0%

CLH

-2.4%

AU Consumer Finance

-2.0%

AU Market


1 Year Return

-18.8%

CLH

58.3%

AU Consumer Finance

16.7%

AU Market

Return vs Industry: CLH underperformed the Australian Consumer Finance industry which returned 58.3% over the past year.

Return vs Market: CLH underperformed the Australian Market which returned 16.7% over the past year.


Shareholder returns

CLHIndustryMarket
7 Day-4.0%-2.4%-2.0%
30 Day-10.7%-6.5%-0.7%
90 Day-10.4%-5.2%0.4%
1 Year-13.5%-18.8%63.2%58.3%22.5%16.7%
3 Year-11.7%-26.0%42.2%27.9%35.4%16.8%
5 Year-23.2%-42.2%81.1%42.0%60.6%24.4%

Price Volatility Vs. Market

How volatile is Collection House's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Collection House undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CLH (A$1.08) is trading below our estimate of fair value (A$2.88)

Significantly Below Fair Value: CLH is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CLH is good value based on its PE Ratio (4.8x) compared to the Consumer Finance industry average (12.5x).

PE vs Market: CLH is good value based on its PE Ratio (4.8x) compared to the Australian market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: CLH's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: CLH is good value based on its PB Ratio (0.7x) compared to the AU Consumer Finance industry average (1.8x).


Next Steps

Future Growth

How is Collection House forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

-0.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CLH's earnings are forecast to decline over the next 3 years (-0.9% per year).

Earnings vs Market: CLH's earnings are forecast to decline over the next 3 years (-0.9% per year).

High Growth Earnings: CLH's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CLH's revenue (4.1% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: CLH's revenue (4.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CLH's Return on Equity is forecast to be low in 3 years time (10.6%).


Next Steps

Past Performance

How has Collection House performed over the past 5 years?

7.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CLH has high quality earnings.

Growing Profit Margin: CLH's current net profit margins (19.1%) are higher than last year (18.2%).


Past Earnings Growth Analysis

Earnings Trend: CLH's earnings have grown by 7% per year over the past 5 years.

Accelerating Growth: CLH's earnings growth over the past year (17.5%) exceeds its 5-year average (7% per year).

Earnings vs Industry: CLH earnings growth over the past year (17.5%) exceeded the Consumer Finance industry 14.2%.


Return on Equity

High ROE: CLH's Return on Equity (13.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Collection House's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: CLH has a low level of unsold assets or inventory.

Debt Coverage by Assets: CLH's debt is not covered by short term assets (assets are 0.3x debt).


Financial Institutions Analysis

Asset Level: CLH's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if CLH has a sufficient allowance for bad loans.

Low Risk Liabilities: CLH reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if CLH has an acceptable proportion of non-loan assets held.

Low Risk Deposits: CLH has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if CLH has an appropriate level of bad loans.


Next Steps

Dividend

What is Collection House's current dividend yield, its reliability and sustainability?

7.59%

Current Dividend Yield


Dividend Yield vs Market

company7.6%marketbottom25%2.4%markettop25%5.6%industryaverage3.2%forecastin3Years8.4%

Current dividend yield vs market & industry

Notable Dividend: CLH's dividend (7.59%) is higher than the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: CLH's dividend (7.59%) is in the top 25% of dividend payers in the Australian market (5.59%)


Stability and Growth of Payments

Stable Dividend: CLH's dividends per share have been stable in the past 10 years.

Growing Dividend: CLH's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (36.8%), CLH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CLH's dividends in 3 years are forecast to be well covered by earnings (45.2% payout ratio).


Next Steps

Management

What is the CEO of Collection House's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Doug McAlpine 0

0.08yrs

Tenure

AU$217,760

Compensation

Mr. Douglas P. McAlpine, also known as Doug, B.Comm, CA, is Chief Executive Officer at Collection House Limited since November 25, 2019 and had been its Chief Financial Officer since July 1, 2019 until Nov ...


Management Age and Tenure

1.8yrs

Average Tenure

Experienced Management: CLH's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

1.7yrs

Average Tenure

Experienced Board: CLH's board of directors are not considered experienced ( 1.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: CLH insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyAU$12,45005 Nov 19
Credit Suisse, Investment Banking and Securities Investments
EntityCompany
Shares10,000
Max PriceAU$1.25
SellAU$4,42205 Nov 19
Credit Suisse, Investment Banking and Securities Investments
EntityCompany
Shares3,572
Max PriceAU$1.24
SellAU$831,50331 Oct 19
Credit Suisse, Investment Banking and Securities Investments
EntityCompany
Shares663,383
Max PriceAU$1.25
BuyAU$24,43610 Sep 19
Michael Knox
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares20,000
Max PriceAU$1.22
BuyAU$48,74906 Sep 19
Leigh Berkley
EntityIndividual
Role
Chairman of the Board
Non Executive Independent Chairman
Shares41,666
Max PriceAU$1.17
BuyAU$25,20023 Apr 19
Michael Knox
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares20,000
Max PriceAU$1.26
BuyAU$12,50011 Apr 19
Michael Knox
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares10,000
Max PriceAU$1.25
BuyAU$50,89014 Mar 19
Credit Suisse, Investment Banking and Securities Investments
EntityCompany
Shares40,619
Max PriceAU$1.25
SellAU$76,77414 Mar 19
Credit Suisse, Investment Banking and Securities Investments
EntityCompany
Shares58,820
Max PriceAU$1.31

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Doug McAlpine

    Chief Executive Officer

    • Tenure: 0.08yrs
    • Compensation: AU$217.76k
  • Anand Adusumilli

    Chief Data Scientist Officer

    • Tenure: 2.4yrs
    • Compensation: AU$397.76k
  • Jonathon Idas

    Chief Legal Officer

    • Tenure: 2.3yrs
    • Compensation: AU$353.54k
  • Kevin Donaldson

    Head of Lion Finance

    • Tenure: 0yrs
  • Denica Saunders

    Chief Operating Officer

    • Tenure: 1.4yrs
    • Compensation: AU$403.81k
  • Jos Basson

    Head of CLH Lawyers

    • Tenure: 0yrs
  • Cassandra Brown

    Head of Government Services

    • Tenure: 0yrs

Board Members

  • Catherine McDowell

    Independent Non-Executive Director

    • Tenure: 1.3yrs
    • Compensation: AU$98.87k
  • Michael Knox

    Independent Non-Executive Director

    • Tenure: 2.8yrs
    • Compensation: AU$101.29k
  • Leigh Berkley

    Non Executive Independent Chairman

    • Tenure: 2.1yrs
    • Compensation: AU$213.88k
  • Sandra Birkensleigh (64yo)

    Independent Non-Executive Director

    • Tenure: 1.3yrs
    • Compensation: AU$98.87k

Company Information

Collection House Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Collection House Limited
  • Ticker: CLH
  • Exchange: ASX
  • Founded: 1992
  • Industry: Consumer Finance
  • Sector: Diversified Financials
  • Market Cap: AU$151.384m
  • Shares outstanding: 141.48m
  • Website: https://www.collectionhouse.com.au

Number of Employees


Location

  • Collection House Limited
  • 100 Skyring Terrace
  • Level 12
  • Newstead
  • Queensland
  • 4006
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CLHS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDOct 2000
CLHASX (Australian Securities Exchange)YesOrdinary SharesAUAUDOct 2000
CLHCHIA (Chi-X Australia)YesOrdinary SharesAUAUDOct 2000
LWUDB (Deutsche Boerse AG)YesOrdinary SharesDEEUROct 2000

Biography

Collection House Limited provides debt collection services in Australia and New Zealand. The company operates through two segments, Collection Services and Purchased Debt Ledgers. It offers debt collection ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/08 10:33
End of Day Share Price2019/12/06 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.