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|1st Credit collections rise by 18% to £50m|
|Tuesday, 19 April 2016|
1st Credit (Funding) Ltd, the UK’s leading ethical debt purchase and collection company, increased collections revenue to £50.1m in 2015 – up 18% from £42.5m the previous year.
The FCA-authorised company attributes the rise in collections to a high level of purchasing in 2014. 1st Credit has a strong back book and has achieved an increase in the number of long-term arrangements secured, with over 100,000 customers paying each month.
The company reports EBITDA of £33.2m for 2015, up from £27.3m in 2014. While its 10-year ERC has fallen slightly from £221m to £210m, it is confident of purchasing above maintenance levels in 2016.
These results have been achieved in a supply-constrained and highly competitive market. Despite lower levels of supply, 1st Credit purchased £20.7m of debt in 2015, maintaining pricing discipline and increasing the quality of the portfolios acquired. It retains a place on all major bank purchasing panels.
1st Credit pursues a strategy of agreeing long-term affordable arrangements with customers, helping them to reach their debt free day. Arrangements now stand at £307m, up from £278m in 2014. This has been achieved partly through successful legal activity. During 2015, 19.7% of collections derived from legal activity.
Eddie Nott, CEO, commented: “We continue to invest in legal opportunities where we identify customers with the means to resolve their financial situation who do not engage with normal contact strategies. This has been a successful approach, contributing to our increased collections revenue.”
As well as continuing to develop its ethical approach, 1st Credit completed its IT outsourcing project in 2015, giving a more flexible and responsive infrastructure while providing increased security and back up capability. A number of other IT projects were also implemented during the year, including a query management system which improves response times for customer queries and assists enquiry handling with the original debt owner. Other initiatives include a ‘My Benefits’ scheme that gives customers discounts on their everyday spending and a portal to allow easier online payments, which is scheduled for full launch in mid-2016.
Chairman Leith Robertson said: “We are confident that 1st Credit is in a strong position for 2016, with high quality purchased portfolios and costs tightly controlled. We expect to grow ERC this year. We are also pleased to have completed integration into the new regulatory regime, and have secured full FCA-authorisation. We will continue to innovate to improve the customer experience and increase efficiencies in our collections process.”
He added: “Our arrangement book has continued to grow in 2015, setting up a long tail of future cash receipts. Over 70% of our arrangements are from purchases more than two years old, creating a strong and predictable annuity stream. ”
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