News

Lowell Group, a UK leader in consumer debt purchase and recovery, today announces its interim financial results for the second quarter 2013 (1 December 12 – 28 February 13).

Highlights
• Collections of £42.7 million in the quarter, up 35% compared to Q2 2012
• Portfolio purchases of £41.5 million in the quarter, up 95% compared with Q2 2012
• Adjusted EBITDA of £30.0 million in the quarter, up 34% compared with Q2 2012
• Continued strong Unlevered Net IRR on portfolios owned as at 28 February 2013 of 22.4% (35.7% after collection activity costs)
• Continued deleveraging – LTV reduced from 57% at bond issuance to 44% as at February 28, 2013
• Cash flow conversion remains consistently over 90% for all periods
• Estimated remaining collections (ERC) of £458.3 million, up 29% since February 29, 2012
• £75 million additional bond placement successfully realised on February 11, 2013

Commenting on the results, Colin Storrar, CFO, said:
“Our sustained financial strength is once again evident with continued strong growth across all our key performance metrics; strong collections performance, growing economies of scale, strong portfolio acquisitions and improving EBITDA. All of this contributes to an increasingly strong balance sheet position with improvements in our funding ratios, strong cash reserves and increasing ERC.

“Moreover, the additional £75 million bond placement, which we completed in February, puts the Group in a very strong position to take advantage of strong market opportunities and enhance its growth going forward

“Adjusted EBITDA was £30.0 million, up 34% on the same period last year, and we achieved £42.7 million of collections, up 35% on last year. It was also an excellent quarter for portfolio purchases, up 95%. With these recent acquisitions we now have some 10.8 million customer accounts with a face value of £9.8 billion.

“The result of this continued strong all round performance is that ERC, which underpins the balance sheet value of our debt portfolios, has increased 29% over the last 12 months to £458.3 million.

“I am also pleased to report that performance in March, the last full reportable month of performance, has continued in the same positive vein. We spent £8.3 million on portfolio acquisitions during the month taking our year-to-date spend on portfolios to £64.5 million, 68% higher than the figure for the same period last year. At the end of March our ERC now stands at £468.2 million, up £9.9 million on the previous month, and more than £100 million up on the previous year.

“Compliance, as ever, continues to be of paramount importance. We have initiated a series of client consultation days to share best practice and are well advanced in our preparations for regulation by the Financial Conduct Authority, which starts in April 2014. We are totally focused on the need to deliver fair customer outcomes through sustainable individual solutions and one measure of success is that default rates are reducing.

“We continue to invest in our systems to further develop our competitive advantage and during the quarter we introduced further improvements to our already market-leading in-house trace system.

“Looking to the future we have a very strong pipeline for future acquisitions and following the recent £75 million bond tap we are well-placed to take advantage of these opportunities.

“We continue to diversify into ‘un-tapped’ opportunities in new sectors and are focusing on government, utilities and insurance. We also continue to harness our skills and expertise to deliver value added services that develop our strategic relationships and facilitate further growth opportunities. To put the importance of this into context, of the £41.5 million acquisition spend during the quarter, two thirds had an element of value added services in our proposal.

“Our core markets are performing well, we are well placed to maximise opportunities to enter new sectors, and we are excited about our opportunities to develop value added services to enhance our existing client propositions.”

Lowell Group plans to publish its interim financial results for the second quarter 2013 (1 Dec 12–28 Feb 13) on the investment section of the Lowell Group website at 8.00am BST on Friday 26th April 2013. Access is by request via the following link:

/index.php/investors
TELECONFERENCE – In addition, at 11.00am BST on Friday 26th April, Lowell Group’s CEO, James Cornell, and CFO, Colin Storrar, plan to hold an audio conference presentation on the company’s performance.
To access this audio conference, participants will need to register in advance at:

http://emea.directeventreg.com/registration/21467969

They will then be allocated the conference call number, a participant user pin, conference pin and instructions on how to join the conference call.

Lowell Finance Holdings Limited (“Lowell”) today announced the pricing of £75 million aggregate principal amount of additional 10.75% senior secured notes due 2019 to be issued by its subsidiary, Lowell Group Financing plc. The notes will constitute a further issuance of the 10.75% Senior Secured Notes due 2019 issued by Lowell Group Financing plc on March 30, 2012. Lowell anticipates that the offering will close on February 11, 2013 and intends to use the proceeds from the offering to repay certain of its outstanding drawings under its revolving credit facility and for additional cash funding.

The notes are being offered in a private placement outside the United States to non-U.S. persons in reliance on Regulation S under the U.S. Securities Act.  The notes will not be registered under the U.S. Securities Act or securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or pursuant to an applicable exemption from the registration requirements of the U.S. Securities Act and any other applicable securities laws.  This press release does not constitute an offer to sell or the solicitation of an offer to buy the notes, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

This announcement does not constitute a public offering, nor an invitation to the public in connection with any offer, within the meaning of the Prospectus Directive.  The offer and sale of the notes will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus for offers of securities.  “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the any relevant member state of the European Economic Area.  “2010 PD Amending Directive” means Directive 2010/73/EU.

Forward-Looking Statements

Statements in this announcement that are not historical facts are forward-looking statements.  All forward-looking statements involve risks and uncertainties that could affect Lowell’s actual results and could cause its actual results to differ materially from those expressed in any forward looking statements made by, or on behalf of, Lowell.

 

For further information, please contact our investors’ relations:

Carol Ord

Tel: +44 (0)113 285 6570

E-mail: investors@lowellgroup.co.uk

Lowell Group, a UK leader in consumer debt purchase and recovery, today announces its interim financial results for the first quarter 2013 (1 Sept 12-30 Nov 12).

Highlights

  • Estimated remaining collections (ERC) of £442.1 million, up 31% since November 30, 2011
  • Strong Unlevered Net IRR at 24.2% (37.9% after collection activity costs)
  • Collections of £37.1 million in the quarter, up 18% compared to the three months ended November 30, 2011
  • Collections on portfolios owned at August 31, 2012 performing at 105% of ERC projections from August 31, 2012
  • Adjusted EBITDA of £26.1 million in the quarter, up 21% compared to the three months ended November 30, 2011
  • Portfolio purchases of £14.8 million in the quarter, up 43% compared to the three months ended November 30, 2011
  • Continued very strong performance in December 2012 with ERC increasing to £467.5 million and portfolio purchases to £43.5 million year to date (4 months), 30% and 72% up on prior year, respectively

Commenting on the results, James Cornell, CEO, said:

“I am pleased to report continued strong progress with significant growth across all our key performance indicators, including collections, portfolio acquisitions, adjusted EBITDA, and ERC.

“Adjusted EBITDA for the period of £26.1 million was up 21% on the corresponding period last year. We achieved quarterly collections of £37.1 million, up 18% on last year, while our portfolio purchases totalled £14.8 million – a 43% increase.

“We are achieving this growth while continuing to deliver high and resilient return on capital and cash flow generation from our asset base.

“The result of our strong all round performance is that ERC, which underpins the balance sheet value of our debt portfolios, has increased 31% over the last 12 months to £442.1 million.

“We remain focused on low balance portfolios in our core market sectors – financial services, communications and home retail credit – and on building an asset base well-diversified across numerous portfolios, sectors, clients and debt types. We continue to make calculated progress in new sectors, including utilities and government debt where we are active in emerging debt sales and trials.

“At the same time, we are maintaining our investments in the development of our systems to enhance operational efficiency, including increased use of email to reduce postage costs and the roll-out of speech analytics software to allow on-going monitoring of calls.

“Compliance continues to be of paramount importance and we have already taken steps to comply with the OFT’s revised guidance on debt collection, which was published in November 2012.

“Figures for December, which included significant portfolio purchases of £28.7 million, show the business is extending its track record of strong performance. Looking forward, prospects remain very attractive.  Since the end of November, we have seen a substantial volume of debt sale activity with opportunities presented to the company totalling over £2.2 billion of debt at face value from 17 different vendors. We are also continuing our sector diversification with the majority of December purchases in home retail credit.

“We benefit from significant visibility on our portfolio purchases for the year, as a result of the high percentage of forward flow agreements we have with clients and completed spot purchases year to date. The majority of our budgeted portfolio purchases for the year was already committed by December 2012.

“Furthermore, we have strengthened our ability to take advantage of these opportunities, and thereby enhance our ERC, by increasing our revolving credit facility from £40 million to £55 million with an uncommitted accordion option for a further £15 million. This also demonstrates the continued support of our senior lenders.”

Ends

Lowell Group, a leading debt purchase company, today announced that is has increased its existing revolving credit facility (“RCF”) from £40 million to £55 million, with the support of the company’s existing lenders Lloyds and JPMorgan. The increased credit facility is based on the same terms as the original agreement and includes an uncommitted accordion, which allows the company to increase the size of the facility by a further £15 million.

Against a backdrop of very attractive market conditions and continued strong operating performance, the increased RCF will further enhance Lowell Group’s strong liquidity position and provide additional capacity for portfolio purchases.

James Cornell, Lowell Group’s CEO, commented: “We value the continued support of our lending partners. The increase in our RCF further enhances our financial flexibility and reflects the attractiveness of the portfolio purchase opportunities we are seeing in the market. We are well placed to continue our strong track record of growth going forward.”

Lowell Group recently announced its annual results for 2011/12 which included reporting a record year for portfolio purchases representing an investment of £90.7 million, a 30% increase on the previous year. Lowell Group purchased 113 new portfolios, which saw it reach the milestone of managing 10 million customer accounts with a face value of £9.0 billion.

“The additional funding will enable us to continue our calculated progress in existing and new sectors” continued James. “We will continue our focus on building long-term strategic partnerships with key clients and maximising value-added capital deployment solutions.”

The increase in RCF builds on the successful placement of a high yield bond in March 2012 which saw the company raise £200 million. It is further evidence of the effectiveness of Lowell’s partnership with TDR Capital.

 

For further information contact: Carol Ord, Head of Communications, Lowell Group. Tel. 0113 2856570, E-mail: carol.ord@lowellgroup.co.ukMobile 07814 430330