Profit 2018 Collection House: amid pressure fears of negotiations, debt-laden folks try online deals

DEBT chasing agency Collection House says almost 1/5th of people owing money are trying new online repayment site before phoning, potentially to avoid negotiating pressure.

Anthony Rivas, CEO of debt-chasing agency Collection House.

• Boardroom execution at Collection House

DEBT chasing agency Collection House has seen almost one-fifth of people who owe money trying a new online repayment site before phoning, potentially to avoid negotiation pressure.

People going online were also paying large instalments than expected, Brisbane-based Collection House said on Wednesday.

The comments came as Collection House saw profits rise from $17.4 million to $26.1 million, although the result was boosted by complex debt deals that initially speed up revenue flows. Dividends remained flat, with a final payout of 3.9c.

During the year, Collection House brought in a new online portal for people to work out repayments plans or dispute debts. Collection House chief executive Anthony Rivas said about 20 per cent people were going to the portal without having spoken on the phone to Collection House staff.

Chairman Leigh Berkley said the level of instalment plans made online were surprising, with people “actually paying us more this way”.

“There is a difference between us being on the phone negotiating with them, and then (the person) just sitting there, genuinely going through their own situation, no pressure” online, Mr Berkley said.

Collection House reaps back debts on behalf of institutions such as banks, or buys blocks of debts of companies and regathers the remains for itself.

Its latest profit saw Collection House increasingly reap in revenues from offloading blocks of debts itself or engaging in complex call option deals, an agreement for the holder to buy an asset at a certain price.

The tactics have proved controversial in the market and almost $15.7 million in revenue came via this avenue. Overall revenues rose from $133.4 million to $143.9 million.

Mr Rivas said Collection House would bring in “gamification” tools for staff — the idea being to encourage them to boost productivity and compliance — using computer avatars, performance measures and prizes. It includes trivia training questions and rewards range from lollies to movie tickets.

The results show auditors KPMG detailed an explanation of accounting for software assets — a key question that major shareholder Lev Mizikovsky raised doubts about last year.

Collection House said the division which chases debt for the company itself had flat revenues, excluding one major debt deal. But earnings margins rose from 41 per cent to 42 per cent, despite being more aggressive in accounting for amortisation, Collection House said.

“We are actually leaner and meaner,” said Mr Rivas, whose remuneration lifted slightly to $1.256 million. Collection House has roughly 770 staff, including 70 in the Philippines.

The division that reaps debt on behalf of other institutions saw raw earnings stay flat at $12.9 million, although the company argued business picked up in the second half.

Shares in Collection House closed up 1c at $1.49.