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|Arrow Global plc - Preliminary results for the year ended 31 December 2016|
|Thursday, 02 March 2017|
Arrow Global Group PLC “Arrow Global” or “the Company” and its subsidiaries (together “the Group”), is pleased to announce its preliminary results for the year ended 31 December 2016.
Commenting on today’s results, Lee Rochford, Group chief executive officer of Arrow Global, said: “2016 was a landmark year for Arrow. We ended the year a larger, stronger, more diverse business. Underlying profit after tax was 29% higher and we delivered strong returns, enhanced shareholder value and an increased dividend.
“During the year, we completed record organic purchases of £223 million with the majority sourced in off-market deals. In addition, we acquired Vesting in the Netherlands and agreed the purchase of Zenith in Italy.
“Our scale and reputation continue to provide a significant commercial advantage and we have started 2017 well, with a strong origination pipeline. We are confident in our objective of delivering high teens EPS growth and a progressive dividend policy, supported by ROE in the mid-20s, over the medium-term.”
· Final dividend of 6.4p proposed, bringing total dividends for 2016 to 9.1p per share, up 28.7% on 2015 and representing a 35% pay-out
· Underlying basic earnings per share (EPS) increased 28.5% to 26.1p (2015: 20.3p) delivering underlying Return on Equity (ROE) of 29.1% (2015: 26.5%)
· Total revenue for the year was £235.9 million, an increase of 42.6% (2015: £165.5 million), driven by an increase in core collections to £286.0 million (2015: £218.5m), resulting in an increase in Adjusted EBITDA of 36.7% to £209.2 million (2015: £153.1 million)
· Capital-light asset management revenues now constitute 20% of total revenues
· Profit after tax of £26.3 million (2015: £31.7 million), and basic EPS of 15.1p (2015: 18.2p). These include a number of one-off items, principally the costs associated with restructuring the group’s long-term financing in September 2016 of £18.0 million
· Underlying profit after tax up 28.7% to £45.6 million (2015: £35.4 million)
· A record year for organic portfolio purchases of £223.0 million (2015: £176.3 million)
· Our purchased loan portfolio asset base and loan notes increased by 37.2% to £804.1 million (2015: £586.3 million*), which is reflected in the increased value of the 84-month ERC from £1,028.6 million to £1,339.1 million, up 30.2%
· Acquisition of InVesting B.V. (“Vesting”) in the Netherlands and Belgium and agreed the proposed acquisition of Zenith Service S.p.A., (“Zenith”) in Italy. These transactions coupled with the announcement to co-invest in the assets and servicing of the RNHB Hypotheekbank loan book in the Netherlands have enhanced our European mainland capabilities significantly
· Successful refinancing of the £220 million bond and the £180 million revolving credit facility, reducing the Group’s overall cost of debt to just under 5% and increasing the average debt facility maturity to 6 years
· Group’s credit ratings upgraded by both S&P (to BB- from B+ and the Group’s Notes from BB- to BB) and Moody’s (to Ba3 from B1)
* Excluding £23.5 million of portfolios due to be resold
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