Debt purchasing group Arrow Global is to develop its fund management capabilities after swallowing a 15.1% rise in costs related to IFRS 16. Despite the group’s profits before tax increasing 65.6% to £42.4m and cashflow increasing 14.7% to £174.4m, underlying profits fell 5.4% to £50.4m in the nine months ending in September.
Commenting on the results, Lee Rochford, Group Chief Executive Officer of the Company, said “Returns in the investment business remain attractive and collections and cash generation both increased strongly during what is traditionally a quieter quarter.”
“The primary focus of the Group continues to be to build out our fund management capabilities and good progress has been made following the formation of AGG Capital Management Limited announced in the Group’s interim results. Our clear objective is to build a fund management business which will drive substantial growth in AMS revenues and when combined with the cost efficiency programme, will see the Group evolve to become a more capital light, high margin business with less leverage.”
“The Group’s highly cash generative characteristics mean we continue to have the flexibility to allocate capital between investment for growth, dividends and deleveraging. We, therefore, remain confident that we can continue to grow the business, reward shareholders and finish the year within our new targeted lower leverage range of 3.0x-3.5x.”