Arrow Global Group PLC (the “Company”, and together with its subsidiaries the “Group”), a leading European investor and asset manager in secured and unsecured defaulted and non-core loan portfolios and real estate, announces its results for the three months ended 31 March 2019.
- Organic portfolio purchases of £56.4 million (Q1 2018: £79.9 million)
- Core collections increased 22.7% to £105.5 million (Q1 2018: £86.0 million)
- Third-party AMS income increased 21.7% to £23.0m (Q1 2018: 18.9 million)
- Free cashflow grew 32.0% to £57.8 million (Q1 2018: £43.8 million)
- Significant reduction in leverage ratio to 3.4x (Q1 2018: 4.0x)
- Underlying profit before tax increased 14.1% to £16.2 million (Q1 2018: £14.2 million)
- Underlying LTM ROE of 34.5%
- Securitisation in April 2019 further diversifies funding structure
Commenting on today’s results, Lee Rochford, Group chief executive officer of Arrow Global, said: “Our strong focus on returns and an improving pricing environment means that we took the decision in the first quarter to purchase fewer portfolios, conserving investment firepower for later in the year. Our strong pipeline visibility means that we remain confident in achieving around £250.0 million of portfolio purchases at our target returns.
Arrow Global is a highly cash generative business and this is evident when purchases are scaled back, driving the three-point reduction in leverage from 3.7x at the full year to 3.4x at the end of Q1. While leverage is likely to modestly rise from here as purchases increase, before trending down again by year end, we remain confident that our target leverage range of 3.0x-3.5x is a sustainable level for the business.
The announcement today of our first securitisation of loan portfolios via a £100 million revolving commitment adds an important element of diversification to our funding structure at attractive cost and modest scale.
We are pleased with the investment returns we have achieved so far in Q1 and believe that the pricing environment will continue to improve. Cash generation will continue to be a major priority through a heavy focus on delivering strong returns and our cost efficiency agenda.”