Having worked in the debt management business for a significant...

Having worked in the debt management business for a significant amount of time and having reviewed this business i feel i can give a little insight to the reasons for the fall and the current status of the company.

With a significant amount of acquisition over the last few years the company grew significantly not only in SP value but in head count. Most of this headcount growth was inexperienced staff managing newly acquired portfolios of initially highly recoverable debt.

After taking the easy recoveries off the acquisition recovery of the balance of a portfolio requires a high level of skill in skip tracing, negotiation and litigation. These skills take a significant amount of time to learn and require high levels of training.

This leads to the question, now that the companies new acquisitions have essentially dried up. Who's doing the training? Most of this companies staff are skilled for early stage recoveries.

Skips will make up probably 2/3 of their current portfolio and as such will require significant volumes of staff with this skill at a fairly high level. Not something thats going to happen with 400 staff in a 3-6 month period.

I would suggest they are still overstaffed in the operational area of their business while the staffing cuts have been made to support areas. The skilled staff in training roles is limited as they will be working on generation of revenue rather than upskilling other employees.

CCP can make a solid recovery from this position but to do so they would need to complete a more realistic review of their operation rather than eliminating support staff saleries from their costs.

Further buyer sentiment has been significantly eroded by the companies performance over the last 12 months, which in reality is their performance over the last 2-3 years in terms of acquisitions and business model development.

Probably safest to hold if you have stock, or sit back and wait to see their performance in 6 months before making a move into this one.