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Cabot Credit Management (Cabot) - Q3 Results PDF Print E-mail
Friday, 03 November 2017
Cabot Credit Management (Cabot), a market leader in European credit management services, today announced the financial results for the nine months ended 30 September 2017.  

Highlights

Collections growth of 16% and revenue growth of 13% vs year to date Q3 2016 driven by liquidation initiatives
Adjusted EBITDA growth of 19% on a year to date basis from cost efficiency measures and scale benefits
Adjusted EBITDA margin increased from 63.4% to 66.4% from Q3 2016
Leverage ratio of 4.2x compared to 4.4x at Q3 2016 due to strong Adjusted EBITDA growth
On 1 November, Cabot received FCA approval to acquire Wescot, a leading UK contingency debt collection and business process outsourcing (BPO) services business. The transaction is expected to close within ten days.
On 20 October, Cabot announced its Intention to Float on the London Stock Exchange later this year

Ken Stannard, Chief Executive Officer, Cabot Credit Management, said: “Cabot has again delivered robust financial performance as it prepares to start life as a public company. As we move into a higher interest rate environment, the company’s core skills and ability to identify the right solutions for customers is becoming more important than ever. Efficient and fair debt collection is vital as consumers seek to manage their finances against the backdrop of a steadily deteriorating macro-economic environment in the UK. Our previous experience of working through downturns will significantly increase our competitive advantage in the medium-term.”

In Q3 2017, Cabot deployed £125m of capital at strong risk adjusted returns, driving growth in its 120 month ERC to £2.3 billion. Cabot’s customer focused collections strategy has enabled it to increase debt purchase collections by 12% from £266m to £298m over the same period last year, while operational efficiencies and benefits of our scale have allowed the company to continue to expand its Adjusted EBITDA margin to 66% for the nine months to September 2017.

On 1 November, Cabot received FCA approval to acquire Wescot, a leading UK contingency debt collection and business process outsourcing (BPO) services business. The Wescot acquisition is consistent with Cabot’s strategy to maintain market leadership in the UK financial service sector. The transaction is expected to close within ten days.

Cabot significantly strengthened its capital position in the past year with Net Debt to EBITDA leverage ratio of 4.2x compared to 4.4x at the end of Q3 2016, due to strong growth in Adjusted EBITDA. In addition, Cabot’s new Asset Backed funding line provides diversification of funding sources and significantly reduces its blended funding cost.

The company has a strong pipeline of attractive capital deployment opportunities, with 90% of full year expected purchases already committed, and £120 million of 2018 purchases agreed via forward flow agreements. Cabot is also leading the industry in digital and has seen encouraging user take up of the MyCabot App and on-line statements which are now live.
 

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