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Arrow Global Group PLC Interim results for the six months to 30 June 2017 PDF Print E-mail
Thursday, 31 August 2017
Arrow Global Group PLC (the “Company”) and its subsidiaries (together the “Group”), a leading European credit management services provider, is pleased to announce its results for the six months ended 30 June 2017 (“H1 2017”). 

Highlights

Growth
· Strong organic portfolio purchases up 30.3% to £125.1 million (H1 2016: £96.0 million)
· Revenue growth of 47.6% supported by 11.3% increase in core collections and 98.6% increase in Asset Management income from H1 2016
· Completion of the acquisition of Zenith Service S.p.A. in Italy
· Agreed terms to acquire Mars Capital, expanding UK secured servicing capabilities and entering the Irish market

Operational excellence
· Overall collections performance at 103% of original underwriting forecasts, underlining the continued quality of data and analytics
· Launch of a group-wide One Arrow programme to support future growth. This will invest in centres of excellence for our group capabilities, operational processes and platforms focussed on enhancing the customer journey and increasing productivity
· Further investment in legal collection costs enhances the value of the back book and drives additional ERC

Financial excellence
· 84 month ERC increased to £1,478.5 million (31 December 2016: £1,339.1 million).
· Increase in capital-light Asset Management revenues to 22.8% of total revenue (H1 2016: 16.9%)
· Successfully raised €400 million senior secured floating rate notes due 2025, at a coupon of E+2.875%, reducing the Group’s weighted average cost of debt to 3.9% (31 December 2016: 4.9%) and average debt facility maturity of 6.8 years as at 30 June 2017 (31 December 2016: 5.9 years)

Strong returns
· Underlying profit after tax up 35.5% to £25.8 million (H1 16: £19.1 million) Underlying basic earnings per share (EPS) increased 35.8% to 14.8p (H1 2016: 10.9p)
· Statutory profit after tax down to £3.7m (H1 16: £16.5m), reflecting the impact of post-tax costs associated with the refinancing in March 2017 of £22.1 million
· Underlying LTM Return on Equity (ROE) of 32.8% (H1 2016: 27.4%)
· Interim dividend of 3.2p per share (H1 2016: 2.7p), up 18.5%

Lee Rochford, Group Chief Executive Officer, commented: “Arrow has delivered another period of strong, profitable growth. Revenues grew 47.6% to £149.8 million with underlying profit after tax up 35.5% to £25.8 million. Our returns-focused mindset continues to yield results with underlying Return on Equity increased to 32.8%. We are pleased to announce an interim dividend of 3.2p, up 18.5%.

"We continue to implement our active diversification strategy. Our capital-light asset management revenues have approximately doubled, and our portfolio investments are nicely balanced across geographies, asset classes and vintages.

"Our entry into Italy is progressing well, and, we have announced today our intention to acquire Mars Capital. This will add significantly to our UK secured servicing capabilities, and provide a low-cost strategic entry into Ireland, a new market for the Group. In H2, we expect to complete the sale of our 15% interest in MCS Groupe, which will deliver an excellent return to shareholders and enable us to redeploy capital in faster growing markets.

"Our pan-European market position, scale and unique origination capabilities continue to underpin our outlook for growth. We now address over €1 trillion of market opportunity, with leading platforms and are investing to ensure Arrow Global has leading capabilities in the industry.

"A strong pipeline in all of our core markets gives us confidence to meet our earnings expectations for the year and in delivering a medium-term underlying ROE percentage in the mid-twenties, high-teen EPS growth and a progressive dividend policy.”
 

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