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Lowell's strong Q2 results show continued growth, prudent leverage and strong visible liquidity PDF Print E-mail
Thursday, 21 May 2015

Lowell Group, a UK leader in consumer debt recovery services, today announces continued strong performance in the second quarter of its 2015 financial year (1 January 2015 to 31 March 2015).

Its interim financial results for the quarter maintain the Group’s track record for delivering consistent and sustainable growth, high returns and visible earnings.

Highlights

    •    •    Collections of £55.9 million in the quarter, up 14% compared with Q2 2014.
    •    •    Adjusted EBITDA of £34.8 million in the quarter, up 10% compared with Q2 2014.
    •    •    84 month estimated remaining collections (ERC) of £742.4 million, up 19% since 31 March, 2014.
    •    •    48% of ERC (£353.4 million) expected to be recovered as cash within 24 months
    •    •    Cash asset return (adjusted EBITDA/average ERC) of 19.6%for 12 months to 31 March 2015.
    •    •    £126.1 million of free cash flow before debt and tax servicing has been generated in the last twelve months to March 2015.
    •    •    £31.2 million of diversified portfolio investments in the quarter (97% from repeat clients) and £119.0 million already achieved or committed for FY 15.
    •    •    Customer account numbers since inception increased to 17.0m from 13.9m as at 31 March 2014, an increase of 22% over the last 12 months.
    •    •    As at 31 March 2015, the aggregate face value of debt purchased since inception totalled £13.7 billion, a 14% increase from the same period in 2014.
    •    •    Loan to value ratio (net debt/ERC) reduced from 57% at original bond issuance to 50% at 31 March 2015. (51% at 31 March 2014).
    •    •    Net debt to adjusted EBITDA is at 2.8x cover at 31 March 2015 with fixed charge cover ratio at 3.5x cover at the same date.

Commenting on the results, Colin Storrar, CFO, said:

“We’ve achieved another quarter of strong financials. Compared to Q2 2014, our Q2 2015 collections were up 14% to £55.9 million and EBITDA was up 10% to £34.8 million. At the same time our balance sheet continues to grow - our 84 month estimated remaining collections (ERC) now stands at £742.4m, an increase of 19% or £117m from March 2014. In addition, we continue to see value beyond our 84 month accounting period with our 120 month ERC increasing by 18% (£128m) to £829m.

“This cash flow visibility means we are well placed to invest in further purchases to satisfy our investment appetite, while the number and volume of our forward flow agreements and the fact we purchase across financial services, home retail credit and telecommunications clearly helps us achieve our purchasing goals.

“Our business also continues to focus upon maintaining discipline in pricing new investments, harnessing the significant data asset and analytic capabilities that the business benefits from.

“Our application to the FCA for a full licence continues to gather pace, with formal submission on track by the end of August. Customer centricity will be central to our application, something recognised by Investors In Customers who recently awarded us with a 3 star assessment; the highest that is available.

“In summary, we continue to report strong financial performance, strong medium term growth prospects and the ongoing support and backing of two major investment houses in TDR Capital and Ontario Teachers’ Pension Plan.”

(Source - Lowell Group News Release)  

 

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