Baycorp predicts growth

Credit-checking company Baycorp Advantage expects earnings will increase by as much as 20 per cent this year despite the transtasman economic slowdown.

The company, which this year sold its debt-collection business for A$96.5 million, yesterday reported a net profit excluding one-offs of A$46.1 million ($54.97 million).

Earnings before interest and tax (ebit) were up 17 per cent to A$58.8 million, or A$48 million excluding those from discontinued operations such as debt collections.

Managing director Andrew Want said the group expected to achieve earnings from continuing operations of A$53 million to A$58 million this year, up by as much as 20 per cent, in spite of softening economies in Australia and New Zealand.

The unfavourable conditions were particularly evident in New Zealand, where the company makes about 25 per cent of its earnings, and where "the brakes really have come on pretty hard and fast".

Want said the result for the year was underpinned by a 2 per cent earnings growth in the company's Information Services and Solutions division, which includes the credit bureau businesses.

Its Solutions Group, which provides credit and marketing analytics and data-driven marketing services, increased earnings 75 per cent.

Baycorp kept its operating costs fairly stable at 45 per cent of sales and expects that to fall to to 42 per cent in the 2007 year.

The company declared a final dividend of 8c a share, bringing its total dividend for the year to 14c. With a 50c-a-share capital return and an on-market share buyback, that took the company's returns to shareholders for the year to A$157 million.

Baycorp intends to return a further A$79 million to shareholders by way of a 35c-a-share capital return this year.