One year ago today, Encore Capital Group’s (ECPG) share price was $US42.71. Yesterday it closed at $16.60, a fall of 61%. On 31 December, less than 3 weeks ago it was $29.08. The chart tells me it’s going to go lower.
In the latest quarter (Sept 2015), ECPG made a loss of £11.0m, or 43 cents a share. I’m picking it to make a loss of around $15.0m in Q4; this is a guesstimate that could wildly out.
What is clearer is ECPG’s debt burden; it’s not only enormous, it’s growing:
As at 31 December 2013 they had debts/borrowings of $1.85b
As at 31 December 2014 they had debts of $2.77b (an annual increase of $923m)
My estimate for 31 December 2015 is that they will have debts $3.23b (increase of $457m)
They are paying about 6.1% interest on their debt. Interest expense:
2013 year - $73m
2014 year - $167m
2015 guesstimate - $197m
ECPG’s debt to equity ratio is pretty close to 500%
In comparison CCP looks like a picture of health:
Profits growing at 10% pa
Pays a 4.5% dividend return
Borrowings (31 June 2015) = $AUD49.0m
Interest expense (2014/15) = $AUD1.3m
Interest rate = approx 4%
Debt to equity ratio = 36%
Comments please
K
CCP Price at posting:
$9.92 Sentiment: Buy Disclosure: Held
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