Arrow Global Group PLC (the “Company”, and together with its subsidiaries the “Group”), a leading European investor and asset manager in non-performing and non-core assets, announces its results for the period ended 30 June 2018.
Strong Group operating and financial performance
Continued strong growth and returns – core collections up 15.2% and adjusted EBITDA up 16.8%
Underlying profit after tax up by 10.0% to £28.4 million
Profit after tax up by £4.8 million to £8.5 million
Underlying LTM ROE of 33.5% and an interim dividend up by 25%
Strong investment underwriting performance at 103% of original forecast
Successful build out of a pan-European platform providing a good runway for organic growth
29% growth in assets under management to £49.3 billion
‘One Arrow’ investment programme on track to complete by year end
Investment Business (IB)
Record portfolio acquisitions of £145.1 million, up from £125.1 million in H1 2017 – on track to deliver £230 million to £240 million of portfolio purchases
Returns net of lifetime collection activity costs remain in line with mid-teens 10-year IRR target; 16% IRR achieved on H1 2018 purchases (FY 2017: 15%)
Non-UK portfolio investments now represent more than 50% of ERC
Asset Management and Servicing Business (AMS)
AMS Business constitutes 32.2% of gross segmental income at a 19% EBITDA margin
Announced acquisition of Norfin adds an additional €1.5 billion of assets under management; highly accretive to AMS margins
Strong balance sheet discipline
Fully refinanced balance sheet – WACD of 3.9% and no bond maturities until 2024; strong liquidity with £178.0 million cash headroom to fund organic growth
Commitment to prudent balance sheet management maintained
Remain within guided leverage range of 3.5 to 4.0 times secured net debt to adjusted EBITDA – committed to reducing the leverage ratio by year end and further into 2019
Commenting on today’s results, Lee Rochford, Group chief executive officer of Arrow Global, said: “Momentum at Arrow remains strong. Our broad sourcing capabilities and operating platform have enabled the Investment Business to continue to achieve consistent returns, with unlevered net IRRs in the mid-teens across a range of asset types. When combined with our capital-light asset management and servicing income, financial performance continues to be highly value accretive.
Since our IPO in 2013, we have grown significantly, establishing a pan-European footprint with market-leading positions across six key geographies. We believe we now have the optimal platform to position us well to generate strong earnings, cash flow and de-leveraging as we realise the full benefit of this footprint and the investments we have made to enhance efficiency.
Trading continues to be strong and we remain on track to finish the year in line with market expectations.”