Lowell, a European leader in credit management services, delivered another quarter of strong growth in the Q2 period, 1 April to 30 June 2017, it announced today.

The Group’s sustainable growth plan continues to be delivered through its consistent data-driven insight, portfolio diversification and consumer-centric focus.

Operationally, these results have been underpinned by Lowell’s continued commitment to people, strong governance, process improvement and extensive data capabilities.

Financial Highlights

  • 28% y-o-y increase in Cash Income to £143m1
  • 18% y-o-y increase in Cash EBITDA to £71m1
  • 26% y-o-y increase in ERC to £1.9bn2
  • 44% of acquisitions over the last 12 months from forward flow agreements
  • Maintained balance of acquisition mix across a range of sectors
  • Collections ahead of forecast

Operational Highlights

  • Full FCA authorisation achieved
  • First UK business to receive Investors in Customers (IIC) Gold award3
  • Senior management team further strengthened

Colin Storrar, Group Chief Financial Officer, said:

“By focusing on our core strategy of combining sophisticated decision science with class-leading customer service, we have again delivered strong quarterly growth across our key metrics.

“The Group’s work to expand its data capabilities, reinforce operating structures and put clients and consumers first, consistently underpins our operational strategy and provides a good platform for second half.”

To join the Q2 Bond call at 10.30am BST today, please register on the investor website: www.lowellgroup.com

1 for the three months to June 2017
2 as at 30 June 2017
3 relates to Lowell Financial Ltd

Overview

Lowell has continued to deliver growth in Q2 by remaining focused on its core strategy of combining advance decision science, customer-centric culture and practices with focused governance. The Group’s vision is to be recognised as the best in the industry.
Central to this plan has been achieving full FCA authorisation. This was delivered in June, following the work to complete the successful merger of the Lowell Group and GFKL.

Our customer-centric approach and wider investment in our people, continues to be recognised by respected independent bodies. The feedback of our own customers saw us receive Investor in Customers’ highest rating for the third year in succession, and become the first to take its newly branded “Gold” status.

Ensuring the business has the highest quality leadership which blends insight and experience is key to its sustainable success. This quarter saw the appointment of Bill Flynn as Group Counsel and UK CRO. Bill brings deep experience of the financial services regulatory environment. We also announced Laurence Hamilton had joined us to lead our strategic business development as we look to grow our book and client base further.

Delivering our financial objectives

In the second quarter, our financial performance remained focused on growing the NPL portfolio in order to continue the upward trends in Cash Income, Cash EBITDA and Estimated Remaining Collections (ERC).

NPL portfolio acquisition saw a 22% increase for the 12 months to June versus the previous year. Cash Income rose to £143m in the quarter, compared to £112m in the corresponding quarter in 2016 and ERC reached a new record level of £1.9bn.

The quarter has also seen continued growth and investment in our unrivalled decision science and data analytics. As a result, Lowell collected 105% of forecast collections, as at December 2016, for the six months to 30 June 2017; with the Group projecting the value of ERC over the next ten years at £1.9bn and with £730m projected to be collected in the next 24 months.

We continue to drive diversification in our portfolio. This provides positive benefits through enhanced customer relationships, while helping to avoid sector and regional concentration risks. The current portfolio sector mix is 39% Financial Services, 36% Retail, 20% Communications and 5% other. ‘Off market’ acquisitions, from forward flow agreements, rose to 44% of the mix – evidence of further strong client relationships.

Notes to Editors

About Lowell:

Lowell is one of Europe’s largest credit management companies with operations in the UK, Germany and Austria, and a vision to be the best in its field in Europe. Lowell combines its principled approach, international experience, deep understanding of data analytics and operational efficiency to serve every part of the credit management value chain, with expertise in debt purchasing, third party collections, business process outsourcing, credit management and e-commerce.

Previously named Lowell GFKL Group, Lowell was formed in 2015 following the merger of the UK and German market leaders: the Lowell Group and the GFKL Group. It is backed by global private equity firm Permira, and Ontario Teachers’ Pension Plan, and is headquartered in both Leeds (UK) and Essen (Germany). For more information on Lowell, please visit our investor website: www.lowellgroup.com

For further information, please contact:

Investor Relations enquiries:

Jon Trott, Head of Investor Relations
Telephone: +44 7551 153 793
Email: investors@lowellgroup.co.uk

Media enquiries:

Carol Ord, Head of Communications UK
Telephone: + 44 7814 430330
Email: media@lowellgroup.co.uk

Henrik Hannemann, Head of Communications DACH region
Telephone: +49 201 102 1172
Email: Comms@lowellgroup.de

Lowell, a European leader in credit management services, recorded a strong set of results for the period 1 January to 31 March 2017. These results show the benefits of the Group’s ongoing portfolio expansion and diversification, as well as its continued consumer focus.

Financial Highlights

  • 37% y-o-y increase in Cash Income to £148m
  • 32% y-o-y increase in Cash EBITDA to £78m
  • 23% y-o-y increase in ERC to £1.8bn
  • 44% of acquisitions over the last twelve months from forward flows
  • Portfolio investments continue to be made across diverse originating sectors

Operational Highlights

  • Collections forecast remains consistently accurate
  • Maintained Investors in Customers (IiC) Gold rating1>
  • Further improved Net Promoter Score to 431

1 relates to Lowell Financial Ltd

Colin Storrar, CFO Lowell, said:

“Lowell has again delivered strong quarterly growth across its metrics. This is a consistent performance from the now fully integrated Group which demonstrates continued good operational strategy and execution.

With our strategy focused on expansion and diversification, these results, combined with the strong foundations we have in place, enable us to view 2017 with confidence.”

To join the Q1 Bond call at 10:30 BST today, please register on the investor website:

www.lowellgroup.com

About Lowell:

Lowell is one of Europe’s largest credit management companies with operations in the UK, Germany and Austria, and a vision to be the best in its field in Europe. Lowell combines its principled approach, international experience, deep understanding of data analytics and operational efficiency to serve every part of the credit management value chain, with expertise in debt purchasing, third party collections, business process outsourcing, credit management and e-commerce. Previously named Lowell GFKL Group, Lowell was formed in 2015 following the merger of the UK and German market leaders: the Lowell Group and the GFKL Group. It is backed by global private equity firm Permira, and Ontario Teachers’ Pension Plan, and is headquartered in both Leeds (UK) and Essen (Germany). For more information on Lowell, please visit our investor website: www.lowellgroup.com

For further information, please contact:

Investor Relations enquiries:
Jon Trott, Head of Investor Relations
Telephone: +44 7551 153 793
Email: investors@lowellgroup.com

Media enquiries:
Carol Ord, Head of Communications UK
Telephone: + 44 7814 430 330
Email: media@lowellgroup.com

Henrik Hannemann, Head of Communications DACH region
Telephone: +49 201 102 1172
Email: Comms@lowellgroup.de

Lowell GFKL Group, a European leader in credit management services, recorded strong results for its full year ended 31 December 2016, with a 20% increase in Group Cash EBITDA1 to £254m showing the continuing benefits of the combined business.

Publishing the results today it has also announced that, following the successful merger of the Lowell Group and GFKL, it will rebrand under a unified identity: Lowell.

Financial Highlights

  • Group Cash EBITDA1 up 20% to £254m
    • Growth driven by:
      • 23% increase in Non-Performing Loan (NPL) cash collections
      • 18% increase in 3rd Party Collections (3PC) income
  • 23% year-on-year increase to £306m in portfolio acquisitions
    • 45% of acquisitions from Financial Services clients
    • 32% of acquisitions from Retail clients
    • 18% of acquisitions from Communications clients
  • 29% year-on-year increase to £10.1bn in 3PC Assets under Management (AuM)
  • 120 month gross Estimated Remaining Collections (ERC) of £1.8bn
    • 30% year-on-year increase
    • 39% of 120m ERC to crystalise as cash collections in the first two years
  • Completion of a further bond issuance related to the acquisition of Tesch

Operational Highlights

  • A series of complementary and accretive acquisitions during the year
    • Tesch (September 2016), consolidating our market leadership position in Germany
    • IS Inkasso (May 2016), expanding our geographical reach through establishing a leadership position in Austria
  • Lowell Financial retains 3 Star Exceptional rating with Investors in Customers
  • Continuing focus on consumer experience remains at the forefront of all activities
  • Ongoing compliance within the regulatory environments to deliver best practice across the Group
  • Post year end: unveiling of the new Group shared brand identity and name; providing a clear vision and strategy for the future

Outlook

Lowell has seen the momentum from 2016 continue into the new year with positive trading in its first quarter. The combined business has the fundamentals in place to continue to grow its platforms through 2017 with a clear focus on value creation.

James Cornell, CEO Lowell, said:

“This is a very good set of results for Lowell and demonstrates the strength of our combined business. 2016 was an important year in our growth with a number of strategic acquisitions across Europe, and the completion of an additional bond issuance.

Having successfully merged our businesses we have a clear vision and strategy for the Group. Combined, we exist to improve the financial well-being of clients and consumers with our principled approach and pioneering consumer insight, offering a positive, forward-looking message and a distinctive identity in the sector. Our new brand reflects this. Lowell has proven equity and existing strong positive associations; it is familiar and respected. The new brand will provide a shared identity for clients, consumers, and colleagues alike; one I believe shows our positive direction as a business.

We look to the rest of the year and beyond with confidence.”

 

 

1Cash EBITDA for the three months to 31 December 2015 and on a last 12 months basis to 31 December 2015 is defined as both Lowell’s and GFKL’s Adjusted EBITDA, each as defined in the Offering Memorandum dated 14 October 2015. Cash EBITDA for the three months to 31 December 2016 and on a last 12 months basis post 31 December 2015 is defined as collections on owned portfolios plus other turnover, less collection activity costs and other expenses (which together equals servicing costs) and before exceptional items, depreciation and amortisation.

LOWELL GFKL GROUP ANNOUNCES IMPRESSIVE THIRD QUARTER RESULTS

Lowell GFKL Group, a European leader in credit receivables management, today announces impressive results for its third quarter ended 30 September 2016.

Financial Highlights

  • Group Cash EBITDA* of £69m for the three months to September 2016 – an increase of 34% versus the three months to September 2015
  • 120 month gross Estimated Remaining Collections (ERC) of £1.7bn, an increase
    of  20% from September 2015 (up £274m) and 22% higher versus December 2015
  • Non-Performing Loan (NPL) portfolio acquisitions of £238m in the last 12 months
    to September 2016, consistent with the 12 months to September 2015
  • Solid pipeline of NPL portfolio acquisitions in place for Q4 giving visibility
    of expected purchases for the full year in excess of £250m

Operational Highlights

  • Closed the acquisition of Tesch Inkasso at the end of September 2016
  • Raised €230m to fund the Tesch Inkasso transaction and provide further investment capital
  • Integration of all businesses is progressing well
  • Focus on value creation remains paramount:
    • Sharing best practice to increase competitiveness
    • Building the strongest platforms to secure local market leadership
    • Maintaining a disciplined approach to pricing and investment
  • Compliance with the regulatory environments and the continuing focus on customer experience remain at the forefront of all activities

Outlook

The Group continues to perform well, with on-going opportunities to deploy capital in accretive investments. We see structural drivers for market growth in both Germany and the UK and as such the outlook for the Group remains positive.

Commenting on the results, Colin Storrar CFO said:

“I’m pleased to announce the delivery of impressive results by the Lowell GFKL Group. We have seen positive momentum during the third quarter with significant growth in both Cash EBITDA and 120 month ERC year on year. In light of our 2016 year to date performance and recent complementary acquisitions, we look to the future positively.”

 

* Cash EBITDA for the three months to 30 September 2015 and on a last 12 months basis to 31 December 2015 is defined as both Lowell’s and GFKL’s Adjusted EBITDA, each as defined in the Offering Memorandum dated 14 October 2015. Cash EBITDA for the three months to 30 September 2016 and on a last 12 months basis post 31 December 2015 is defined as collections on owned portfolios plus other turnover, less collection activity costs and other expenses (which together equals servicing costs) and before exceptional items, depreciation and amortisation.

 

For further information, please contact:

Investor Relations enquiries:                    

Jon Trott, Head of Investor Relations

Telephone: +44 7551 153 793

Email: investors@garfunkelux.com

 

Media enquiries:

UK

Lisa Caswell

Telephone: + 44 7393 236 925

Email: MediaEnquiries@lowellgroup.co.uk

Germany

Michaela Heitkemper

Telephone: + 49 201 102 1198

Email: pr@gfkl.com

 

About Lowell GFKL Group:

The Lowell GFKL Group was created in October 2015 following the merger of the UK and German market leaders, the Lowell Group and the GFKL Group. This union created one of the largest credit management companies in Europe. It benefits from the backing of global investment company Permira and Ontario Teachers’ Pension Plan. The Group’s experience, expertise and core strengths in data analytics and operational efficiency underpin its vision to be the most reputable and trusted partner in the European credit management sector. For more information on the Group, please visit our investor website:

investors.garfunkelux.com

For information on the individual companies, please visit:

www.lowellgroup.co.uk

www.gfkl.com

Non-IFRS financial measures

We have included certain non-IFRS financial measures in this trading update, including Estimated Remaining Collections (“ERC”) and Cash EBITDA.

We present ERC because it represents our expected gross cash proceeds of the purchased debt portfolios recorded on our balance sheet (the “Purchased Assets”) over the 84-month, 120-month and 180-month periods. ERC is calculated as of a point in time assuming no additional purchases are made. ERC is a metric that is also often used by other companies in our industry. We present ERC because it represents our best estimate of the undiscounted cash value of our Purchased Assets at any point in time, which is an important supplemental measure for our board of directors and management to assess our performance, and underscores the cash generation capacity of the assets backing our business. In addition, the instruments governing our indebtedness use ERC to measure our compliance with certain covenants and, in certain circumstances, our ability to incur indebtedness. ERC is a projection, calculated by our proprietary analytical models, which utilise historical portfolio collection performance data and assumptions about future collection rates, and we cannot guarantee that we will achieve such collections. ERC,  as computed by us, may not be comparable to similar metrics used by other companies in our industry.

We present Cash EBITDA because we believe it may enhance an investor’s understanding of our profitability and cash flow generation that could be used to service or pay down debt, pay income taxes, purchase new debt portfolios and for other uses, and because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies generally. In addition to ERC, our board of directors and management also use Cash EBITDA to assess our performance. Cash EBITDA is not a measure calculated in accordance with IFRS and our use of the term Cash EBITDA may vary from others in our industry. For a reconciliation of Cash EBITDA to operating profit, see the “Reconciling the Q3 Interim Numbers to this Presentation” page within the Investor Presentation document available on the investor website.

ERC and Cash EBITDA and all the other non-IFRS measures presented have important limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under IFRS.

LOWELL GFKL GROUP ANNOUNCES IMPRESSIVE TRADING PERFORMANCE DURING SECOND QUARTER 2016

Lowell GFKL Group, a European leader in credit receivables management, today announces impressive results for its second quarter ended 30 June 2016.
Financial Highlights

  • Q2 cash EBITDA* increased by 19% year on year to £60m
  • NPL portfolio acquisitions up 27% to £247m in the last 12 months – well diversified across originating verticals
  • 120 month gross Estimated Remaining Collections (ERC) at a record £1.5bn, up 20% from June 2015 and up 11% since Q4 2015
  • In excess of £175m of portfolio acquisitions already closed and contractually committed for 2016
  • Long-term forward flow agreements signed in H1 give visibility of in excess of £320m spend out to FY-21
  • Pricing and collections performance in line with underwriting and model assumptions

*Cash EBITDA as quoted is defined as Garfunkelux Holdco 2 S.A.’s operating profit excluding exceptional items, depreciation and amortization, and adjusted for acquired debt portfolio write ups and amortization amounts as reflected in the unaudited consolidated statement of financial position for Garfunkelux Holdco 2 S.A.

Operational Highlights

  • Acquisition of IS Inkasso Service successfully completed in May
  • Integration of Lowell, GFKL and IS Inkasso Service continues to make good progress
  • Focus on value creation remains paramount:
  • o Sharing best practice to increase competitiveness
  • o Building a strong platform for future Pan-European expansion
  • o Maintaining a disciplined approach to pricing and investment
  • Extension of our value proposition to clients continues through the development of our one stop shop offering
  • Compliance with the regulatory environment and the customer experience remain at the forefront of all activities

Outlook

The outlook for the Group remains positive and the Group is well placed to benefit from the structural drivers of growth in the UK, German and Austrian consumer credit markets.

Commenting on the results, Colin Storrar CFO said:
“I am delighted to announce impressive results for the Group this quarter. Cash EBITDA performance in the quarter is particularly pleasing, as is the step change in medium-term, forward flow acquisition visibility. The combination of our H1 trading, along with the future NPL acquisitions we’ve secured to date, means we look to the second half of 2016 and beyond with optimism.”

 

 

 

For further information, please contact:
Investor Relations enquiries:
Jon Trott, Head of Investor Relations
Telephone: +44 7551 153 793
Email: investors@garfunkelux.com

Media enquiries:
UK:
Lisa Caswell
Telephone: + 44 7393 236 925
Email: MediaEnquiries@lowellgroup.co.uk

Germany:
Michaela Heitkemper
Telephone: + 49 201 102-1198
Email: pr@gfkl.com

About GFKL Lowell Group:
The GFKL Lowell Group was created in October 2015 following the merger of German and UK market leaders GFKL and the Lowell Group. This union created one of the largest credit management companies in Europe. It benefits from the backing of global investment company Permira Funds and Ontario Teachers’ Pension Plan (OTPP). The Group’s experience, expertise and core strengths in data analytics and operational efficiency underpin its vision to be the most reputable and trusted partner in the European credit management sector. For more information on the Group, please visit our investor website: investors.garfunkelux.com.
For information on the individual companies, please visit:
www.gfkl.com
www.lowellgroup.co.uk

Non- IFRS financial measures
We have included certain non-IFRS financial measures in this trading update, including estimated remaining collections (“ERC”) and Cash EBITDA.
We present ERC because it represents our expected gross cash proceeds of the purchased debt portfolios recorded on our balance sheet (the “Purchased Assets”) over the 84-month, 120-month and 180-month periods. ERC is calculated as of a point in time assuming no additional purchases are made. ERC is a metric that is also often used by other companies in our industry. We present ERC because it represents our best estimate of the undiscounted cash value of our Purchased Assets at any point in time, which is an important supplemental measure for our board of directors and management to assess our performance, and underscores the cash generation capacity of the assets backing our business. In addition, the instruments governing our indebtedness use ERC to measure our compliance with certain covenants and, in certain circumstances, our ability to incur indebtedness.

ERC is a projection, calculated by our proprietary analytical models, which utilise historical portfolio collection performance data and assumptions about future collection rates, and we cannot guarantee that we will achieve such collections. ERC, as computed by us, may not be comparable to similar metrics used by other companies in our industry.

We present Cash EBITDA because we believe it may enhance an investor’s understanding of our profitability and cash flow generation that could be used to service or pay down debt, pay income taxes, purchase new debt portfolios and for other uses, and because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies generally. In addition to ERC, our board of directors and management also use Cash EBITDA to assess our performance. Cash EBITDA is not a measure calculated in accordance with IFRS and our use of the term Cash EBITDA may vary from others in our industry. For a reconciliation of Cash EBITDA to operating profit, see the “Reconciling the Q2 Interim Numbers to this Presentation” page within the Investor Presentation document.

ERC and Cash EBITDA and all the other non-IFRS measures presented have important limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under IFRS.