Lowell Group’s strong financials continue through Q2 2014 

Lowell Group, a UK leader in consumer debt purchase and recovery, today announces interim financial results for the second quarter of its 2014 financial year (1 January 2014 to 31 March 2014).

The Group has maintained its strong start to the financial year with continued sustainable and predictable growth in collections and ERC, a record acquisition spend in the quarter, and the successful offering of a £115m bond. As a result, the Group is well funded and positioned in a market which continues to present strong opportunities within its core sectors. 

Highlights

  • Diversified origination strategy key to successful quarter of acquisitions – £54m
  • £113m portfolio purchases for FY14 already committed, 92 per cent of FY13 total
  • Well-funded to achieve further growth as a result of successful £115m bond offering
  • Strong results continue
    • £49m collections in Q2, £172m in last 12 months – up12 per cent on previous 12 months
    • March 2014 84 month ERC at £623m, up £155m (33 per cent) on March 2013
    • Underlying cash conversion strong with projected 49 per cent of ERC (£304m) to be collected within 24 months
    • £32m adjusted EBITDA in Q2, £117m in last 12 months – up 8 per cent on previous 12 months
  • Successfully moved to new expanded HQ and northern operations centre in Leeds

Commenting on the results, Colin Storrar, CFO said:

“Q2 has seen Lowell maintain its record of financial prudency, strong growth, high returns and predictable earnings. A highlight has been our acquisition spend, something enabled by our highly diversified origination strategy. Our spend of £54 million takes our committed year to date position to £113 million. As context, this is 92 per cent of what we spent in the entirety of last year and indicative of the strong market conditions.

“It is important to note that 95 per cent of our purchases in Q2 were with repeat clients in sectors we know well, ensuring predictability and sustainability in performance. And these are high return areas.

“Our Interlaken acquisition continues to bear fruit – many of the portfolios acquired have been secured as a result of the competitive advantages and complementary skills Interlaken brings including expertise in litigation, higher balance financial services and government debt.

“This positive picture is set to continue with strong growth opportunities across all our core sectors, financial services, communications and home retail credit. Also, there are clear signs of opportunities in utilities and government debt coming to market in the near future.

“And importantly, as a result of our recent successful £115 million bond offering, which we completed in March we remain well-placed to maximize on these opportunities.

“Turning to operational performance we have continued our strong track record. Our ERC, the amount we expect to collect over the next 84 months, has increased to £623 million, a 33 per cent increase on the figure a year ago. And significantly we expect to collect £304 million (49 per cent) of this ERC in the next 24 months, which highlights the liquidity of our business.

“At £49 million, collections in Q2 were up nine per cent on the same period last year, while collections over the last 12 months have totalled £172 million, which represents a 12 per cent year on year increase.

“In terms of EBITDA the year on year trend is a strong one showing 8 per cent growth from £108 million to £117 million.

“We continue to be extremely focused upon Governance and Compliance as we move into the world of FCA regulation. And, last but not least, it is important to mention one other event which took place in the quarter. We successfully moved our Group headquarters and northern operations centre into a new building in Leeds, whilst maintaining a seamless customer and client service. Our new building is twice as big as our previous offices, giving us plenty of headroom for future growth.”