Debt Purchaser, Arrow Global has announced its latest company results (for the three months ended 31 March 2018). Commenting on the results Lee Rochford, Group Chief Executive Officer, said “The power of our differentiated model has meant that we have had another strong start to the year.  Our sophisticated approach to capital investment and asset management, underpinned by our strong institutional client relationships and unique servicing capabilities, has meant that we have continued to purchase high volumes of portfolios at our required returns, while maintaining the growth of our capital-light asset management revenues. The market dynamics of financial institutions increasingly looking to remove NPL portfolios from their balance sheets, and the trading of those assets in both the primary and secondary markets, continues to provide us with a clear runway for growth.”

“I remain confident that we are favourably positioned to capitalise on future opportunities and we remain on track to deliver our financial targets for the year.”

Highlights include:

  • Partnership with M7, the leading pan-European specialist commercial property investor
  • Strong organic portfolio purchases, of £79.9 million surpassing Q1 2017’s record Q1 volumes (Q1 2017: £77.4 million) with broad diversification by geography and asset class
  • Revenue growth of 19.6% supported by a 11.6% increase in core collections and a 19.9% increase in capital-light Asset Management income
  • The structural backdrop for future growth remains attractive, with both primary NPL sales and an increasingly important secondary market continuing to grow strongly
  • Overall collections performance remains strong at 103% of original underwriting forecasts, demonstrating our track record of prudent investment and portfolio servicing expertise
  •  Acquisition of Europa Investimenti expected to close in H2
  • One Arrow programme on track, with cost to income benefits predicted from late 2019 onwards
  • 84-month ERC increased to £1,562.2 million (Q1 2017: £1,403.5 million)
  • 19.9% increase in capital-light Asset Management revenues to £18.9 million
  • 10.7% reduction in financing costs to £10.9 million (Q1 2017: £12.2 million) as benefits from 2017’s refinancing continue to flow through
  • Successful 2018 refinancing has significantly strengthened the balance sheet,  providing additional funding headroom, extending debt duration and underpinning our ability to invest in growth
  • Long debt duration with average facility maturity of 6.6 years as at 31 March 2018 (31 March 2017: 6.8 years)
  • Secured net debt to adjusted EBITDA of 4.0x, within guided range 
Financial Highlights 31 March
2018
31 March
2017
Change
Core collections £86.0m £77.1m 11.6%
Revenue £77.1m £64.5m 19.6%
Underlying profit after tax £11.4m £10.3m 10.3%
Underlying earnings per share 6.5p 5.9p 10.2%
Underlying return on equity 33.3% 30.8% +2.5ppts
120-month ERC £1,852.4m £1,618.3 £234.1m