News

 

Lowell Group today announces that it intends to launch an offering of £100 million in aggregate principal amount of senior secured notes (the “Notes”). The proceeds from the offering will be used to repay all outstanding drawings under the senior facilities, to pay certain fees and expenses relating to the offering and for general corporate purposes, to support the continued growth of the business.

The Notes will be offered only to qualified institutional buyers pursuant to Rule 144A and outside the United States pursuant to Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”), subject to prevailing market and other conditions. There is no assurance that the offering will be completed or, if completed, as to the terms on which it is completed. The Notes to be offered have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or unless pursuant to an applicable exemption from the registration requirements of the 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 would be unlawful.

This announcement does not constitute and shall not, in any circumstances, constitute a public offering nor an invitation to the public in connection with any offer within the meaning of the Directive 2010/73/EU of the Parliament and Council of November 4, 2003 as implemented by the Member States of the European Economic Area (the “Prospectus Directive”). The offer and sale of the Notes will be made pursuant to an exemption under the Prospectus Directive, as implemented in Member States of the European Economic Area, from the requirement to produce a prospectus for offers of securities.

In connection with the issuance of the Notes, one of the initial purchasers will serve as stabilizing manager and may over-allot the Notes or effect transactions with a view to supporting the market price of the Notes at a level higher than that which might otherwise prevail. However, there is no assurance that the stabilizing manager (or persons acting on behalf of the stabilizing manager) will undertake stabilization actions. Any stabilization action may begin on or after the date on which adequate public disclosure of the terms of the offer of the Notes is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date of the Notes and 60 days after the date of the allotment of the Notes. Any stabilization action or over-allotment must be conducted in accordance with all applicable laws and rules.

 

About Lowell

Lowell Group is a leader in consumer debt purchase and recovery based in the United Kingdom. It is a specialist in buying non-performing consumer debt from a wide range of major creditors, across various industries, including financial services, communications, home retail credit and utilities.

 

Forward-Looking Statements

This press release may include forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes, ‟estimates”, ‟anticipates”, “expects, ‟intends”, ‟may”, ‟will” or “should” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts and include statements regarding Lowell Group or its affiliates’ intentions, beliefs or current expectations concerning, among other things, Lowell Group or its affiliates’ results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which they operate. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Readers are cautioned that forward-looking statements are not guarantees of future performance and that Lowell Group or its affiliates’ actual results of operations, financial condition and liquidity, and the development of the industries in which they operate may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if Lowell Group or its affiliates’ results of operations, financial condition and liquidity, and the development of the industries in which they operate are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.

Lowell Group, a UK leader in consumer debt purchase and recovery, today announces interim financial results for the first quarter of its 2014 financial year (1 October 2013 to 31 December 2013).

The Group continues to report strong performance with continued collections growth, high liquidity and returns, record committed portfolio purchases and a very encouraging pipeline of opportunities for the remainder of the year.

Highlights

  • Estimated remaining collections (ERC) of £549 million, up 17% since 31 December, 2012
  • Collections of £43 million in the quarter, up 19% compared with Q4 2013
  • Adjusted EBITDA of £29 million in the quarter, up 16% compared with Q4 2013
  • Unlevered Net IRR on portfolios owned strong at 34.5% (before direct costs of collections)
  • 50% of ERC (£274 million) expected to be recovered as cash within 24 months
  • Cash asset return of 23.2% for 12 months to December 2013
  • £79 million portfolio purchases for FY14 already committed, including £60 million from forward flow arrangements with 11 key clients
  • New business trials underway with commercial and public sector clients
  • FCA preparations ahead of schedule – interim permissions applied for and granted
  • Industrialisation of IT infrastructure complete with a secure and stable cloud based solution in place

Commenting on the results, Colin Storrar, CFO, said:

“The Group continues to deliver consistently strong results based on solid fundamentals of a proven business model and effective management. Compared to the same quarter last year, our collections were up 19 per cent to £43 million, EBITDA was up 16 per cent to £29 million, and our estimated remaining collections (ERC) were up 17 per cent to £549 million, of which we expect to collect around 50 per cent – £274 million – within 24 months, offering significant cash flow visibility.

“The prospects for the rest of the year are very encouraging. Already in the first quarter of this year we have made, or are committed to, £79 million of portfolio purchases, which represents 64 per cent of our total spend last year. This figure includes £60 million from forward flow agreements with 11 different clients, which reflects the strategic depth of our client relationships. It is the largest committed portfolio purchase level ever achieved at this point in a financial year, indicative of the strength of our client relationships and wider market conditions. Our capital is being deployed in areas we know well and where we believe we can achieve high returns. 90% of these purchases were made with repeat clients and all are in our core sectors.

“Looking to the future, a strong pipeline of opportunities bodes well for the rest of the year. Strong growth is forecast in consumer credit lending across credit cards, car finance and unsecured loans. Focusing on our core markets, financial services, home retail credit and communications, and there are opportunities across the board. We believe there is a £27bn backlog of debt in financial services and anticipate that the capital de-leveraging requirements will force European institutions to sell debt. Continued growth is forecast in home retail credit and we are seeing a shift upstream for debt sales in communications as companies look to release cash for marketing. This fresher debt will give rise to increased spend opportunities.

“Also, the synergies of our acquisition of contingent collections specialist Interlaken are already reaping rewards in terms of opening up new market sector opportunities, including higher balance financial services and government debt. New business trials are underway with a number of commercial and public sector clients.

“Alongside continued strong performance and predictable growth we have maintained a strong investment in our future operational platforms and strategic direction, a highlight of which is the successful industrialised our IT infrastructure establishing a secure and stable virtual platform for growth.

“Finally, away from the figures, our preparations for FCA regulation are ahead of schedule and have progressed well. We applied for and were granted interim permissions in November 2013, while our internal cultural programme FAIR, which forms part of our preparation for FCA regulation, continues to receive positive feedback from customers and clients alike. A primary focus has been strengthening our affordability assessments during our customer calls, something which has contributed to our continued low default rate for what were previously non-performing accounts.” 

A copy of the results presentation is available via www.lowellgroup.co.uk/investor

Lowell Group plans to publish its interim financial results for the first quarter 2014 (1 Oct 1–31 Dec 13) on the investment section of the Lowell Group website on the morning of Friday 28th February 2014. Access is by request via the following link:  http://www.lowellgroup.co.uk/index.php/investors

TELECONFERENCE – In addition, at 11.00hrs GMT on Friday 28th February, 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/2806359

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 Group, a UK leader in consumer debt purchase and recovery, today announces a strong set of consolidated annual results for the period ended 30 September 2013*. The results demonstrate consistent and predictable growth, high returns and visible earnings.

*During the period Lowell Group moved its financial year end 2013 by one month from August to September 2013 to align the company’s reporting quarters with the more usual calendar quarters.

Highlights

To allow historical comparisons figures quoted are for 12 months to end Aug 2013 (with 13 month figures to end September in brackets)

  • Estimated remaining collections (ERC) up 24 per cent to £531 million at 31 August 2013 (£530 million at end of Sept)
  • Unlevered net IRR at 35.6 per cent as at end 30 September (after deducting collections activity costs)
  • Cash collections up 18 per cent at £160 million (£174 million at 13 months to end Sept)
  • Adjusted EBITDA (excluding exception items) for the year up 17 per cent to £111 million (£119 million at 13 months to end Sept)
  • Portfolio purchases up 22 per cent at £121 million (£124 million at 13 months to end Sept)
  • Sector diversification with a continued specialism in non-paying low balance accounts
  • FCA preparation progressing well with external endorsement for ‘outstanding’ customer service and positive net promoter score
  • Continued investment in the three pillars of our business, our people, practices and systems, building on an already strong and accomplished team with a number of new high calibre recruits from blue chip organisations

Commenting on the results, Colin Storrar, CFO, said:

“Today’s results add to the longevity of our successful track record, with strong growth, strong returns and ongoing liquidity all evident.

“Given we’ve moved to a September year end to align our quarterly reporting with calendar quarters, comparison to prior periods is best done by considering the 12 months to August 13. This allows for like for like comparison and the growth of our business is clearly evident in our posting of an 18 per cent increase in cash collections, a 17 per cent increase in Adjusted EBITDA with a 24 per cent increase in ERC.

“Over the year we invested a record £121 million in portfolio acquisitions taking the face value of our purchases to over £11bn. In the process we have amassed an industry leading data asset of over 12.3 million accounts and 7 million individual customers.

“Significantly, 85 per cent of our collections come from our own UK-based contact centre which we have spent 10 years refining. The size, scale and sophistication of in house activities allow us to reduce our costs, price more effectively and pinpoint our resources more accurately. It also provides transparent oversight of all our functions and points of customer engagement. We send out four million letters each month, receive and make over 100,000 calls and set up in the region of 5,000 new arrangements a day.

“Our focus on building long-term strategic relationships with clients is once again evident. 96 per cent of portfolio purchases in the year came from repeat sellers, with 32 per cent from forward flow deals.

“We also continued to deliver predictable cash flows.

“In an environment where compliance requirements are already greater than ever before we continue to seek to do the right thing for our clients and our customers. Our customer service received the strongest possible endorsement, with an outstanding rating from the UK’s leading customer experience consultancy Investor in Customers. We remain the only organisation in our industry to achieve this recognition, one which is based on robust research involving our customers and employees as well as desk research.

“Looking forward, we expect debt sale volumes to remain buoyant with financial services ‘business as usual’ disposals augmented by deleveraging-led additional spot sales. We also expect stable volumes of sales to emanate from telecoms and home retail credit as well as further volumes to begin to come from emerging markets such as insurance and utilities.”

Lowell Group, a UK leader in consumer debt purchase and contingent collections, today announces its interim financial results for the fourth quarter ending August 2013 (1 June 2013 – 31 August 2013), demonstrating a consistent track record as the Group continues to execute its strategic plan and benefits from a diversified portfolio and highly cash generative business model.

Lowell has moved its financial year end 2013 by one month from August to September 2013 to align the company’s reporting quarters with the more usual calendar quarters.

Lowell Group will issue audited year end results for the 13 months to 30 September before 28 January 2014.

 

Highlights

  • Estimated remaining collections (ERC) of £531.5 million, up 24% since 31 August, 2012
  • Unlevered Net IRR on portfolios owned of 35.9% (after deducting collection activity costs)
  • £45.5 million of capital deployed on new portfolio acquisition in the quarter; revolving credit facility remained undrawn as at 31 August 2013
  • £70 million portfolio purchases for FY14 already committed through forward flow arrangements
  • Account base surpasses 12 million, enhancing the Group’s strategic advantage further
  • Collections of £40.4 million in the quarter, up 9% compared with Q4 2012
  • Adjusted EBITDA of £28.8 million in the quarter, up 14% compared with Q4 2012
  • Interlaken integration progressing well; diversified sector expertise, litigation and economies of scale
  • Customer service independently rated as ‘outstanding’

 

Commenting on the results, Colin Storrar, CFO, said:

“Q4 has been another successful quarter with growth across all key performance metrics underpinned by our strong balance sheet position with ERC of £531 million, up 24% since last year, predicated on a new record quarter of portfolio acquisition.

“Strong operational performance, low cost collections expertise and growing economies of scale continue to support the strong cash generation of our assets, which is highlighted by the “cash asset return”. Lowell’s cash asset return is at an industry-leading level of 23.6%.

“These strong collections and positive cashflows helped us achieve the record quarter for acquisitions without the need to draw on our revolving credit facility.

“Alongside the cash generative nature of our business we continue to generate enviable returns. Our unlevered net IRR is 35.9%, meaning we’re growing the business while protecting our return as both elements of performance are consistent with our Q3 performance.

“The strategic depth of our client relationships is evident by the high percentage of portfolio purchases allocated to forward flows, in fact over £70 million is already committed to forward flow arrangements for the financial year 2014. Furthermore, our purchasing strategy has allowed us to defend our pre-eminence in the mobile and home shopping markets whilst aiding diversification by covering different industries, high and low balance, as well as paying and non-paying.

“Away from the figures, our internal cultural programme FAIR, which forms part of our preparation for FCA regulation, continues to receive positive feedback from customers and clients alike. There are many tangible deliverables within the project, but the primary focus has been strengthening our affordability assessments during our customer calls, something which has contributed to our continued low default rate at 17.9%. Earlier this month the FCA issued its second and more substantive piece of consultation on the transfer of consumer credit licence to the FCA. The paper validated much of the approach we are taking.

“Also, last month Lowell Group was awarded an ‘outstanding’ rating for customer service by Investor in Customers. We are the only provider in our industry to achieve this recognition, one which is based on robust research involving our customers and employees as well as desk research. It indicates the strong relationships we have with our customers based on our strong understanding of their circumstances and, along with our financial performance, demonstrates that our long-standing approach of working with our customers to negotiate a mutually acceptable payment plan tailored to their personal financial circumstances is not only the right thing to do for our customers, but the right thing to do for our business.

“Looking to the future, the acquisition pipeline continues to be very strong across our core sectors of Financial Services, Communications and Home Retail providing a regular flow of portfolio sales. Our acquisition of Interlaken will boost our competitive strength in the Financial Services high balance sector and we remain well-positioned to capitalise on the lower balance accounts typically associated with Communications and Home Retail.