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|Arrow Global Group PLC - Results for the three months ended 31 March 2016|
|Wednesday, 11 May 2016|
Arrow Global Group PLC “the Company” and its subsidiaries (together “the Group”), a leading European purchaser and manager of debt portfolios, is pleased to announce its results for the three months ended 31 March 2016.
· Strengthened our European market position with the acquisition of InVesting, a leading Netherlands and Belgium consumer debt purchaser and collector, for €100m
· Total revenue up 25.4% to £44.5 million (Q1 2015: £35.5 million), driven by a 31.3% increase in core collections1 to £67.0 million (Q1 2015: £51.1 million), and asset management revenue increasing to £7.2 million, now contributing 16.1% of total revenue (Q1 2015: 3.4%)
· Adjusted EBITDA up 57.6% to £51.7 million (Q1 2015: £32.8 million)
· Profit attributable to shareholders up 46.5% to £7.6 million (Q1 2015: £5.2 million). LTM underlying ROE increased to 26.2% (Q1 2015: 25.6%)
· Acquired debt portfolios for a purchase price of £49.1 million, with a 120-month gross cash-on-cash multiple in line with our target returns
· Increased total purchased loan portfolios to £619.8 million (31 December 2015: £586.3 million) with 120-month ERC2 up 5.0% to £1,285.8 million (31 December 2015: £1,224.5 million) and 84-month ERC up 5.2% to £1,082.2 million (31 December 2015: £1,028.6 million)
· Net debt of £620.8 million (31 December 2015: £588.6 million), with a net debt to LTM3 Adjusted EBITDA ratio of 3.6 times (31 December 2015: 3.8 times) and LTM interest cover of 5.2 times (31 December 2015: 4.9 times)
· Balance sheet liquidity further strengthened with our revolving credit facility (RCF) increased to £180 million
· InVesting acquisition financed with the successful issuance of €230 million seven-year Floating Rate Notes, issued at an interest rate of EURIBOR plus 4.75% per year, as announced on 14 April 2016. The FRNs provide further balance sheet liquidity, reduce Arrow Global's weighted average cost of debt and extend Arrow Global's average debt maturity to 5.4 years
Commenting on today’s results, Tom Drury, chief executive officer of Arrow Global said: “Arrow Global delivered another set of impressive results in Q1 with portfolio purchases at £49.1 million, Adjusted EBITDA increased by over 57% to £51.7 million, and underlying net income increased by over 33% to £7.6 million.
“We remain focused on delivering on our strategy of being a top three player in each of our chosen markets. In May, we fully financed the €100m acquisition of leading Netherlands and Belgian consumer debt purchaser and collector, InVesting, making us a leading presence in the Benelux market.
“The InVesting acquisition, combined with the on going integration and growth of our Whitestar business in Portugal, further diversifies our income streams and we expect capital-light asset management operations to account for around 25% of Group revenues on a pro forma full-year basis.
“In April, we also successfully issued a €230 million bond. The funds were used to finance the InVesting acquisition, repay outstanding amounts under our RCF and provide firepower for future investments.
“Our strong Q1 results, coupled with over £40 million of future organic portfolio investments already awarded for the remainder of 2016, mean we remain confident in delivering on our target of investing at roughly twice our annual replacement rate, whilst maintaining strong portfolio returns. This, coupled with our continuous investment in growing ‘capital light’ asset management revenues, provide us with the confidence that we are on track to deliver overall full-year earnings in line with our expectations.”
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