News

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.

GFKL LOWELL GROUP APPOINTS THOMAS DOLD DACH REGIONAL MANAGER

James Cornell, GFKL Lowell Group Chief Executive has today announced the appointment of Thomas Dold, previously CEO of Tesch Inkasso Group, as DACH (Germany, Austria, and Switzerland) Regional Manager with immediate effect.

The Regional Manager role is a new one for the Group and is introduced to bring the capacity and capability necessary to drive the Group’s growth.

Thomas Dold spent 13 years working at IBM in Germany and across EMEA (Europe, Middle East and Africa) before moving into the new media and technology sectors, culminating in 9 years as Managing Director of Dun & Bradstreet Deutschland GmbH. He joined the team at Tesch Inkasso Group in early 2015.

James Cornell said “I am delighted to have found in Thomas the credentials, performance track record and personal leadership style that I was looking for in a Regional Manager. I look forward to giving all necessary support to Thomas to ensure his success in role.”

 

For further information, please contact:

In the UK:     Karen Leech + 44 (0) 113 2856595   or   MediaEnquiries@lowellgroup.co.uk

In Germany:  Michaela Heitkemper +49 201 102-1198   or   pr@gfkl.com

 

Notes to Editors:

GFKL Lowell

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.

In April 2016 the Group made its first acquisition of Austrian Third Party Collections (3PC) specialist, IS Inkasso. This was followed in August and September 2016 with two further 3PC companies, German-based Apontas and Tesch.

Lowell GFKL Group completes its acquisition of the leading German third party collections company Tesch Inkasso strengthening its position in a core market

Lowell GFKL Group (“Lowell GFKL”), a European leader in credit receivables, announced today that it has completed its acquisition of Tesch Inkasso Group from Avedon Capital Partners and the other existing shareholders following prior receipt of regulatory approvals.

 

For further information, please contact:

Investor Relations contact:

Jon Trott

Telephone: + 44 7551 153 793

Email:  investors@garfunkelux.com

 

Media contacts:

UK:

Lisa Caswell       Telephone: + 44 7393 236925

Email: MediaEnquiries@lowellgroup.co.uk

Germany:

Michaela Heitkemper       Telephone : + 49 201 102 1198

Email : pr@gfkl.com

 

Notes to Editors:

About Lowell GFKL

The Lowell GFKL 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.

http://investors.garfunkelux.com

About Tesch Inkasso

Tesch Inkasso was founded in 1985 by Siegward Tesch, has around 400 colleagues and is based in Gummersbach, Germany – in proximity to the GFKL headquarters in Essen. The company was acquired in 2012 by Avedon Capital Partners, the Dutch-German mid-market PE firm. Within Third Party Collection Services (3PC), the business is a market leader in Utilities and has a strong presence in the Insurance, Financial Services, E-Commerce, Telco, Travel and Retail sectors.

Recently the business has moved into Debt Purchasing (DP) through proprietary portfolio acquisitions from its existing asset base. Avedon Capital Partners has pursued a market consolidation strategy with recent acquisitions including Transcom CMS and Mediafinanz.

www.tesch-gruppe.com

Cautionary Statement

This press release is for information purposes only and does not constitute a prospectus or any offer to sell or the solicitation of an offer to buy any security in the United States of America or in any other jurisdiction. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended.

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.

Forward Looking Statements

This press release may include “forward looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. 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 Permira, Ontario Teachers’ Pension Plan, Avedon Capital Partners,  Lowell GFKL Group, Tesch Inkasso or their respective affiliates’ intentions, beliefs or current expectations concerning, among other things, the acquisition, Permira, Ontario Teachers’ Pension Plan, Avedon Capital Partners,  Lowell GFKL Group, Tesch Inkasso or their respective affiliates’ results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates. 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 Permira, Ontario Teachers’ Pension Plan, Avedon Capital Partners, Lowell GFKL Group, Tesch Inkasso or their respective affiliates’ actual results of operations, financial condition and liquidity, and the development of the industry 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 Permira, Ontario Teachers’ Pension Plan, Avedon Capital Partners,  Lowell GFKL Group, Tesch Inkasso or their respective affiliates’ results of operations, financial condition and liquidity, and the development of the industry in which Permira, Ontario Teachers’ Pension Plan, Avedon Capital Partners,  Lowell GFKL Group, Tesch Inkasso 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. Given these risks and uncertainties, you should not rely on forward looking statements as a prediction of actual results.

 

CLOSING OF GARFUNKELUX HOLDCO 3 S.A.’S OFFERING OF SENIOR SECURED FLOATING RATE NOTES DUE 2021

Lowell GFKL Group (“Lowell GFKL”), a European leader in credit receivables management, announced today that Garfunkelux Holdco 3 S.A. (the “Issuer”) has closed the offering (the “Offering”) of €230.0 million in aggregate principal amount of senior secured floating rate notes due 2021 (the “Notes”) as part of the financing for the previously announced proposed acquisition of Tesch Inkasso Group (the “Acquisition”). The Issuer will pay interest on the outstanding principal amount of the Notes at a rate equal to three-month EURIBOR (0% floor) plus 5.50% per annum. The gross proceeds of the Offering were €228.85 million.

 

For further information, please contact:

Investor Relations enquiries:
Jon Trott
Telephone: +44 7551 153 793
Email: investors@garfunkelux.com

 

Cautionary Statement

This press release is for information purposes only and does not constitute a prospectus or any offer to sell or the solicitation of an offer to buy any security in the United States of America or in any other jurisdiction. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The Notes will be offered in a private offering exempt from the registration requirements of the Securities Act and will accordingly be offered only to (i) qualified institutional buyers pursuant to Rule 144A under the Securities Act, (ii) certain persons outside the United States in compliance with Regulation S under the Securities Act and (iii) Qualified Purchasers (as defined in Section 2(a)(51)(A) of the Investment Company Act).  No indebtedness incurred in connection with any other financing transactions will be registered under the Securities Act.

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.

Forward Looking Statements

This press release may include “forward looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. 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 GFKL or its affiliates’ intentions, beliefs or current expectations concerning, among other things, the Offering, the Acquisition, Lowell GFKL or its affiliates’ results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates. 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 GFKL or its affiliates’ actual results of operations, financial condition and liquidity, and the development of the industry 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 GFKL or its affiliates’ results of operations, financial condition and liquidity, and the development of the industry in which Lowell GFKL 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. Given these risks and uncertainties, you should not rely on forward looking statements as a prediction of actual results.

PRICING OF GARFUNKELUX HOLDCO 3 S.A.’S OFFERING OF SENIOR SECURED FLOATING RATE NOTES DUE 2021

Lowell GFKL Group (“Lowell GFKL”), a European leader in credit receivables management, announced today that Garfunkelux Holdco 3 S.A. (the “Issuer”) has priced the offering (the “Offering”) of €230.0 million in aggregate principal amount of senior secured floating rate notes due 2021 (the “Notes”) as part of the financing for the previously announced proposed acquisition of Tesch Inkasso Group (the “Acquisition”). The Issuer will pay interest on the outstanding principal amount of the Notes at a rate equal to three-month EURIBOR (0% floor) plus 5.50% per annum.

Consummation of the Acquisition is subject to receipt of certain regulatory approvals. Pending consummation of the Acquisition, the gross proceeds from the Offering will be deposited into an escrow account in the name of the Issuer, which will be pledged in favour of the trustee on behalf of the holders of Notes. The release of the escrowed proceeds will be subject to the satisfaction of certain conditions. If the Acquisition is not consummated on or prior to 20 February, 2017, the Issuer will be required to redeem the Notes at their initial issue price. Upon release from escrow, the proceeds from the Offering will be used to finance the Acquisition, repay certain outstanding indebtedness under Lowell GFKL’s revolving credit facility and pay related costs, fees and expenses, and for general corporate purposes. There can be no assurance that the Acquisition, the Offering or other financing transactions will be completed.

  

For further information, please contact:

Investor Relations enquiries:
Email: investors@garfunkelux.com

Cautionary Statement

This press release is for information purposes only and does not constitute a prospectus or any offer to sell or the solicitation of an offer to buy any security in the United States of America or in any other jurisdiction. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The Notes will be offered in a private offering exempt from the registration requirements of the Securities Act and will accordingly be offered only to (i) qualified institutional buyers pursuant to Rule 144A under the Securities Act, (ii) certain persons outside the United States in compliance with Regulation S under the Securities Act and (iii) Qualified Purchasers (as defined in Section 2(a)(51)(A) of the Investment Company Act).  No indebtedness incurred in connection with any other financing transactions will be registered under the Securities Act.

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.

Forward Looking Statements

This press release may include “forward looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. 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 GFKL or its affiliates’ intentions, beliefs or current expectations concerning, among other things, the Offering, the Acquisition, Lowell GFKL or its affiliates’ results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates. 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 GFKL or its affiliates’ actual results of operations, financial condition and liquidity, and the development of the industry 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 GFKL or its affiliates’ results of operations, financial condition and liquidity, and the development of the industry in which Lowell GFKL 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. Given these risks and uncertainties, you should not rely on forward looking statements as a prediction of actual results.