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).
- 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.”