Household Wealth, Job Vacancies Data for August 2025 Bode Well for Financial and Retail Sectors

Company Overview: Bapcor Limited (ASX: BAP) is an Australia based company that supplies automotive aftermarket parts, accessories, equipment, services, and solutions. There are four segments within the company. Credit Corp Group Limited (ASX: CCP) is an Australian debt purchasing, collection, and consumer lending company with operations in Australia, the USA, and New Zealand. Established over 25 years ago, Credit Corp is dedicated to offering sustainable financial solutions, such as flexible repayment plans, to help improve customers' financial well-being.

Kalkine’s Sector Report covers the Investment Highlights, Key Financial Metrics, Risks, Outlook, Technical Analysis, Key Support and Resistance Levels, and Recommendation on the stock.

Investment Summary

Sector Overview and Supporting Drivers

Australia’s retail sector is a key driver of household consumption and economic activity, spanning food, apparel, household goods, and online commerce. The sector benefits from population growth, steady wage gains, and evolving consumer preferences that are accelerating digital and omni-channel adoption. Catalysts include interest rate cuts, improving consumer confidence, and tourism recovery, which can boost discretionary spending. However, retailers face challenges from cost pressures, supply chain disruptions, and intense competition, particularly from e-commerce platforms. Sustainability trends and technology adoption are reshaping strategies, with successful operators focusing on efficiency, customer experience, and innovation to capture long-term growth opportunities.

Australia’s financial sector is a cornerstone of the economy, encompassing banking, insurance, superannuation, and wealth management. The sector benefits from a stable regulatory framework, strong capital positions, and population growth that fuels demand for credit and financial services. Key catalysts include housing market activity, digital transformation, superannuation inflows, and potential interest rate cuts that could lift lending volumes. However, challenges persist from margin pressure, rising competition from fintechs, regulatory compliance, and cybersecurity risks. Overall, the sector remains well-positioned to support economic growth while adapting to structural shifts in technology, consumer expectations, and sustainability-focused financial practices.

Sector Catalysts

Index Performance

Investment theme and stocks under discussion (BAP, CCP)

After understanding the sector, let us now look at two companies from the retail and financial sectors listed on the ASX. The price potential of the companies under discussion have been analysed based on Price/Earnings and Price/Book Value based relative valuation methods, respectively.

1. ASX: BAP (Bapcor Limited)

(Recommendation: ‘Speculative Buy’ at AUD 3.260; Potential Upside: Low Double-Digit; MCap: AUD 1.08bn)

BAP is an Australia based company that supplies automotive aftermarket parts, accessories, equipment, services, and solutions. There are four segments within the company.

Insights & Outlook

12-month ended June 2025 Financial Period (FY25) Performance:  In FY25, BAP reported a 3% YoY revenue decline to AUD 1,976mn, while pro-forma EBITDA slipped 4.1% to AUD 247mn from AUD 257mn in FY24. The year marked a strategic reset, with initiatives to streamline operations and cut costs. BAP exited or relocated 70 sites, consolidated 23 warehouses, and added 21 new branches alongside three state distribution centres. These changes caused operational disruption, weighing on results. Pro-forma NPAT fell 8.4% YoY to AUD 80.4mn, down from AUD 87.8mn in FY24. The company has scheduled its Annual General Meeting for 23 October 2025.

Outlook: BAP’s management expects FY26 earnings to gain from the operational improvements undertaken in FY25, with growth enabling continued investment in technology and talent. NPAT is projected to be skewed toward the second half as strategic initiatives begin to deliver benefits. The company pointed to a refreshed leadership team, a defined business strategy, and a solid balance sheet as key strengths to support execution of priorities and a return to sustainable, profitable growth.

Key Risks: Supply Risk, Input Cost Inflation, Geopolitical Risks, Industry Competition, etc.

The stock has corrected ~8.17% in last one month, and over the past six months, it has declined by ~28.51%. The stock has a 52-week low and 52-week high of AUD 3.120 and AUD 5.470, respectively and is currently trading below its 52-week high-low average. BAP was last covered in a report dated ‘4 September 2025’.

2. ASX: CCP (Credit Corp Group Limited)

(Recommendation: ‘Speculative Buy’ at AUD 15.29; Potential Upside: Low Double-Digit; MCap: AUD 1.03bn)

CCP is an Australian debt purchasing, collection, and consumer lending company with operations in Australia, the USA, and New Zealand. Established over 25 years ago, Credit Corp is dedicated to offering sustainable financial solutions, such as flexible repayment plans, to help improve customers' financial well-being.

Insights & Outlook

12-month ended June 2025 Financial (FY25) Performance:  In FY25, CCP posted a 5% YoY revenue increase to AUD 545.6mn. The consumer lending segment recorded stronger earnings growth as lending volumes stabilised following years of post-COVID re-leveraging. Earnings from the US debt buying segment also improved, supported by higher collections and a 28% lift in productivity. Underlying NPAT (pre-impairment) rose 16% YoY to AUD 94.1mn, compared with AUD 81.2mn in FY24.

FY25 Guidance and Outlook: CCP forecasts continued growth in FY26, driven by a stronger US debt ledger pipeline and an expanding consumer lending portfolio. The company has guided NPAT of AUD 100–110mn, implying 12% growth at the midpoint versus FY25. Purchased debt ledger (PDL) acquisitions are expected at AUD 280–330mn, up 27% year-on-year, while gross lending volumes are projected in the AUD 350–390mn range. EPS guidance is set at 147–162 cents, also reflecting 12% growth at the midpoint.

Key Risks: Rising interest rate, weak macroeconomic conditions, decline in discretionary spending, etc.  

The stock has witnessed a decline of ~5.56% in last one month, and over the past six months, the stock is up by 10.80%. The stock has a 52-week low and 52-week high of AUD 11.275 and AUD 18.510, respectively and is currently trading above the mid-point of its 52-week high and low. CCP was last covered in a report dated ‘21 August 2025’.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is neither an Indicator nor a guarantee of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 2 October 2025. The reference data in this report has been partly sourced from REFINITIV. 

Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above. 

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice. 

Technical Indicators Defined: - 

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.