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.
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.”