THE Credit Corp Group (CCG) has revised downwards its profit target to between A$10 million (K26.5 million) and A$12 million (K31.8 billion) and its pre-tax revenue forecast to between A$83 million and A$87 million.
The move, carried out by the board of directors, was made after a substantial portion of the company’s recent debt purchases failed to yield forecast revenues.
In a statement, CCG said it was initiating to review its operations to address the issue.
The company disclosed an expected first-half earnings of A$6 million to A$6.2 million to be finalised and reported on the Australian Stock Exchange on Thursday.
CCG told stockholders at a recent annual general meeting (AGM) that steps had been taken to deal with the issues identified at that time, particularly focusing on improving productivity.
However, it said that these steps were not expected to result in targeted improvement at the rate anticipated.
The company noted the poor performance of recent debt purchases which was an excessive focus on short-term revenue performance that had compromised the company’s ability to derive anticipated revenues from purchases made in previous years.
It also said that large-scale recruitment as part of the company’s growth focus resulted in lower average productivity and that there was reduction in volume of new ledger acquisitions.
The company also disclosed that it incurred substantial costs in building a corporate platform consistent with its historical growth objectives.
CCG said there would be a detailed assessment of the board’s and management’s effectiveness and corporate costs that would see the slashing of non-essential overheads.