Lowell first quarter results 2021

Lowell, a European leader in credit management services, today announces its results for the 3 months ended 31 March 2021.

Commenting on today’s announcement Colin Storrar, Group Chief executive Officer, said: “I am very happy with the financial performance during the first quarter of the year, with collection performance exceeding our forecasts. In particular, the pace of recovery of deferred FY20 UK collections is ahead of our expectations.

“We made pleasing progress towards our margin ambitions and the strength of our balance sheet and substantial liquidity positions our business strongly for what we continue to believe will be a substantial market opportunity.”

Key Highlights

  • 230bps margin expansion in Cash EBITDA
  • Strong collection performance at 112% of Dec-20 static pool
  • UK collections 102% of Dec-19 static pool in Q1; ahead of expectations
  • UK Digital collections growth of 32% YoY will be further strengthened by imminent Digital App release
  • Leverage reduced 0.2x in quarter to 3.6x with strong cash flow improvement
  • Well positioned to take advantage of market opportunity with £498m liquidity


As we move in to the second quarter of 2021 we are encouraged by the strength of our business and we are well-positioned to participate in the future NPL market opportunity. We continue to deliver both efficiency initiatives and strong collection performance, while expanding our margins and further improving our cash flow. Our focus on digital is proving a driver to this and we anticipate further developments in this area, not least with the launch of our new app in the coming months. We believe that our commitment to delivering ease of access, personalised journeys, and highly rated services provides a strong and sustainable platform for growth.

Group Financial Performance

Strong Q1 collection performance

Collection performance has been very strong in the first quarter, performing at 112% against our Dec-20 static pool; all regions have outperformed ERC forecast. UK collection performance has been significant, and it reported 102% collection performance in Q1-21 vs our pre-COVID Dec-19 static pool expectations. Such performance is very encouraging, and management is pleased with the pace of the recovery in the deferred UK collections which is ahead of expectations.

Outperformance of ERC projection in quarter

In the three months ended March 31, 2021, we recognised a Net portfolio write-up of £31m or 1.9% of the Group’s portfolio carrying balance. Q1-21 collections performed at 112% of Dec-20 static pool forecasts. This forecast incorporated the impact of deferred collections principally in the UK because of management actions taken during FY20. The strength of collection performance and the pace of recovery of the deferred collections underpins our confidence in our balance sheet carrying value.

Focus on efficiency drives margin expansion

Focus on cost control delivered a 230bps expansion of our LTM Cash EBITDA margin to 56%, with the Group’s LTM Operating Expenses down £56m YoY.

Margin accretion has continued through the combination of strong collection performance and the delivery of cost efficiency actions which are underway. These programmes remain on track to deliver ~£50m of run rate savings by Dec-21 and support the delivery of the further margin expansion as previously guided.

Expected acceleration of capital deployment through 2021

Portfolio acquisitions totalled £33m in the quarter and £257m on an LTM basis, in line with our average Replacement Rate of £251m. We have strong visibility as to the purchasing pipeline providing further confidence in our full year guidance of £300m.

We believe the future market opportunity remains attractive across our regions and we believe that NPL volumes will continue to grow across the next 12-24 months as the longer-term impact of the global pandemic plays out across our three regions.

Strengthening of business fundamental leads to strong operating cash flow

Cash flow continued to strengthen in the quarter with £121m generated from operations before portfolio acquisitions, an increase of £23m vs Q1-20. On a steady state basis, after deducting £251m of replacement rate portfolio purchases, the level required to maintain our ERC constant, we generated £130m excess cash in the last twelve months, a 55% year-on-year increase.

Our cash flow continues to strengthen through strong collection performance and further margin expansion.

The Group has significant balance sheet capacity. As at March 31, 2021 our liquidity position remains substantial, with £498m available. Leverage has further reduced by 0.2x in the quarter to 3.6x and is at the lower end of our guidance range of 4.0x – 3.5x.


Insolvency and restructuring profession rescued 297k jobs in 2019, R3 report shows

The insolvency and restructuring profession rescued 297,000 jobs and returned £1.82bn to creditors in insolvency cases in 2019 – the equivalent of around 800 jobs and £5m a day, according to a new report from R3, the insolvency and restructuring trade body.

The report, “The value of the profession: how insolvency and restructuring supports the UK economy”, is based on responses to a survey of representatives of 71 companies from the insolvency and restructuring profession in the UK carried out by Savanta ComRes.

Of the £1.82bn members of the insolvency and restructuring profession returned to creditors in 2019, £353m was from corporate insolvency and restructuring cases, and £1.47bn from personal insolvency cases.

R3’s research also shows the profession rescued a total of 7,200 UK businesses in 2019, with nearly four out of ten (39%) businesses advised by R3 members still open after their insolvency procedure concluded.

Further findings include the discovery that the insolvency and restructuring profession advised 60,000 businesses and 144,000 individuals in 2019, with an average of £13,300 returned to creditors upon completion of each personal insolvency procedure.

Colin Haig, R3 President and Head of Restructuring at Azets, says: “This research shows the scale of the economic contribution made by the profession – the businesses and individuals it helps, the jobs it saves, and the money it returns to creditors – which can be hard to quantify because of the nature of insolvency and restructuring cases.

“This report shows what a contribution the profession made in a relatively calm period for the economy, but it also underlines the important role we can play in supporting businesses, individuals and the wider economy to resolve financial distress in a post-pandemic environment, and why our members are at the forefront of getting UK back to work.”

Intrum UK retains Gold Investors in People accreditation

Investors in People has again awarded credit management group Intrum UK gold accreditation, demonstrating the firm’s commitment to high performance through good people management.

In a year of change driven by the COVID-19 Pandemic, Intrum UK has responded successfully to changing ways of working, operating remotely while undergoing significant growth in the credit management and business process outsourcing (BPO) sector.

Investors in People is the international standard for people management, defining what it takes to lead, support and manage people effectively to achieve sustainable results. Underpinning the Standard is the Investors in People framework, reflecting the latest workplace trends, essential skills and effective structures required to outperform in any industry. Investors in People enables organisations to benchmark against the best in the business on an international scale.

Paul Cook, Investors in People Practitioner, said: “This was a particularly positive visit, which reaffirmed that Intrum UK is a business driven by its values and ethical approach. That staff engagement and customer scores have remained at very high levels is testament to Intrum’s flexibility, adaptability and willingness to engage with its people and customers alike.”

Commenting on the award, Chris Collins, HR and Customer Experience Director, said: “I am delighted that Intrum have improved upon our first assessment in 2017. The success of any organisation begins and ends with people and we go to great lengths to ensure that we create an environment for employees to grow and flourish.”

Eddie Nott, Intrum’s UK Managing Director, added: “We are delighted that IIP has confirmed our gold standard, three years on from our last assessment. The team has worked tirelessly through unprecedented times and this accreditation is testament to the value we place on our people and the experience they provide for our customers.”

Founder and former CEO of Telrock joins Arum

Arum is excited to announce that Russell Robinson has joined as a Principal Consultant and Digital Specialist.

Russell has been entirely focused on improving customer experience through digital transformation for the past 20 years, having completed over 100 implementations.

Having co-founded Telrock, a global technology provider of modern cloud-based collections software, in 2001, Russell went on to lead the company as CEO before the company was acquired. After two more years at Telrock serving as director of product, Russell joined industry giant FICO as managing director of FICO Customer Communications Services for the EMEA region.

Russell joins Arum with a wealth of experience, working with system vendors and creditors to achieve the best possible credit management solutions.

He commented on his appointment, “We all know it is necessary customers have intuitive digital tools to make the right financial decisions quickly, whether they are heading toward or attempting to manage out of financial difficulties. However, so many organisations proceed and struggle with digital collections. Due to this, countless organisations won’t recognise the possible ROI with digital. And sadly, millions of customers and families will not set up the financial plans they should have because it was just too hard. This bothers me, as significant collections ROI can absolutely be met, furthermore, this can be achieved whilst making customers’ lives easier. I have experienced it many times.

I look forward to sharing my knowledge, doing more, and continuing to learn together how we can one day make collections and other customer journeys as seamless as Deliveroo! I am excited to join the team here at Arum; great company, great people. We have much work to do!”

As a principal consultant and digital specialist, Russell will help organisations understand the needs of customers, provide intuitive UX, reduce cost to serve and increase cash collected all whilst reducing provision expenses.

Arum Director of Advisory Matt Riddall commented, “I am very pleased to welcome Russell to Arum to lead our digital excellence consulting. Russell brings experience of over 100 worldwide digital first collections and recoveries transformations. There has never been a better time to invest in digital. Russell will support clients with digital strategy, significantly improving digital designs and implementation, reducing risk, reducing time to benefits, and improving forecast ROI.”

Interest in debt recovery careers on the rise

Credit Style, one of the UK’s leading players in debt recovery, has maintained an unbroken record of growth over the past five years with an overall increase in turnover of 163%. This has been achieved despite the ongoing challenges of COVID-19 and consequently, the business is anticipating a continued increase in interest in debt recovery careers this year.

Based in Sheffield, Credit Style is a credit management and debt recovery service designed to flexibly represent bespoke client needs from any business or sector. The company is now encouraging other businesses and jobseekers to take note of their recent findings and ensure they are also prepared for a potential boom in competitive applications.

Debt recovery can sometimes be viewed as an unwanted necessity, but it is a critical service that keeps cash flowing. Without it, the economy would find itself in a troubling situation, especially at present as the ongoing national recovery relies on maintaining solid economic foundations. Sectors such as retail, leisure, hospitality and entertainment are seemingly making a comeback nationally, but many people who work in the worst affected industries have faced incredible uncertainty over the past year. It is not unreasonable to think that many will continue to consider making a career change. The need to recruit for debt recovery professionals is also greater than ever as many clients across all types of sectors look for help in recovering much needed funds that they are owed, resulting in common ground between customers, applicants and employers.

Many young people who are deciding on a career to embark on prioritise employment opportunities with transferable skills that offer a level of freedom and flexibility. As the summer months approach, school leavers and apprenticeship seekers will be joining a highly competitive job market. The stable environment, various types of roles and potential for career success in debt collection will be an attractive proposition and lots of debt recovery companies can point to their performance during the coronavirus pandemic as evidence of what they can provide above other potential career routes.

At Credit Style, only two people were furloughed out of nearly 100 members of staff and this was only implemented in those individual cases because it represented a better solution to their circumstances. As much of the working world begins adjusting to the concept of flexible working, employees in debt recovery are already well-versed in this concept and are able to continue achieving in their jobs at optimal level, regardless of when and where they may conduct their activities.

Credit Style recently recruited several new members of staff such as over the phone collectors and paralegals, including three apprentices. One of those apprentices is Shaun Daley, who is working towards a Level 3 certificate in Law and aims to become a qualified Solicitor. Shaun, said, “I was previously working towards a business admin qualification at a solicitor’s firm but did not feel I was getting the experience I needed to reach my goals. Joining a Debt Recovery firm instead might not seem the obvious route but doing so has actually given me much more hands on experience of working amongst a legal team. You get the same opportunity to join a legal department, but instead of answering phones about any queries, I am dealing with more relevant cases that I can build my future career on. I have only been here for a month but I have learned so much about case management systems, processes and procedures. Earning while you learn is great but it more the experience that is invaluable, doing a job for real instead of learning the theory behind it. There is still a misconception with some people that apprenticeships are not designed for top job titles, but more and more people, myself included, are realising that is not the case.”

Working in debt recovery often provides flexibility and stability, but also encourages people to be ambitious which is both motivating and rewarding. Helping businesses recuperate funds and taking away a time-consuming but essential task allows businesses to focus on their own business priorities. At businesses like Credit Style, each employee is given genuine ownership over the accounts they support. Many debt recovery employers recognise that freedom to get on with the job is attractive to people and in-turn, the expertise they develop is used to benefit everyone involved.

Even before coronavirus was ever mentioned, workers from other sectors have successfully switched to new and rewarding careers in debt recovery. Common misconceptions may have previously prevented some people from applying, but more and more people are recognising the sector as highly rewarding, stable and a secure career choice with lots of opportunities for progression.

Samera Akhtar is a Telephone Negotiator at Credit Style and has worked for the company for the past 10 years. She said, “You need to be driven and goal orientated to succeed in debt recovery, but the freedom to work your way and the prospect of a long-term and supportive work environment is so appealing. I have always been encouraged to speak up if I need anything, including flexibility around maternity and taking lunch at odd-times, which is really important to some people right now.”

Comment from Financial Wellness Group on the changes to the DRO rules

Commenting on the DRO changes announced today, Deborah Ware, Chief Operating Officer, Financial Wellness Group, said: “The changes to the Debt Relief Order (DRO) criteria announced by the Insolvency Service today will allow many more people struggling with severe problem debt to access this effective debt solution.

“However, we are disappointed that the Insolvency Service hasn’t taken the further step of proposing to review the DRO fee. The majority of DRO customers either have very low, or negative, disposable income and the fee can be a real barrier that prevents them from accessing the solution when they need it.

“In our response to the DRO consultation, Financial Wellness Group also highlighted that the public insolvency register deters many people who should take a DRO, or another insolvency solution, from doing so. Our #NoShameInDebt campaign calls for the end of the public register to help reduce the stigma and embarrassment around debt, breaking down another barrier that prevents people from seeking debt advice sooner.”

StepChange welcomes DRO changes but emphasises importance of further change

StepChange Debt Charity welcomes today’s confirmation by the Insolvency Service of changes to the asset limits for eligibility for Debt Relief Orders. At the same time, the charity says that the long-awaited outcome of the review of the consultation on the regulation of Insolvency Practitioners is also important, as is today’s confirmation of the Government’s forthcoming call for evidence on insolvency debt solutions more widely.

Peter Tutton, StepChange head of policy, research and public affairs, said: “We are pleased to see the Insolvency Service confirmation of increases to the asset limits that will enable more people to access Debt Relief Orders. DROs can act as a valuable form of “reset” from debt for some people, and are likely to be particularly useful in the wake of pandemic debt. However, we very much agree that the changes need to form part of a wider review of the insolvency landscape, and we look forward to contributing to the Government’s forthcoming call for evidence on this.”

Sigma appoints tender specialist as part of next growth phase

A West Midlands outsourcing specialist has announced the appointment of a new bids and tendering lead who will support the firm’s growth plans both in the UK and abroad.

The Sigma Financial Group, which offers ‘white label’ customer contact centre services across the energy, water, retail, financial services and telecommunications sectors, has appointed Louise Morgan into the new role of head of bid management and solutions.

Under the leadership of Ben Jones, Chief Commercial Officer, Louise will oversee the design and delivery of Sigma’s bidding processes and tendering solutions in the UK and also the South African market where Sigma is extending its reach through its Cape Town facility.

With over 15 years’ experience in the business process outsourcing sector, Louise joins Sigma after three years as bid manager at customer experience experts, Webhelp. She also held a similar role at Sitel where she led on global bids.

Ben Jones said: “We are steadily growing our presence across a number of sectors but want to take our tendering and bidding work to the next level. Louise is a key part of that and is a tremendous addition to our team.

“Her multi-industry experience and intricate understanding of the tendering processes we face both in the UK and abroad will be vital. She is already proving to be a first-class appointment.”

Louise Morgan added: “Sigma stands out as an ambitious business with a strong and impressive team who are always looking to the future.

“We will be putting our credentials forward for a number of high-profile BPO bids in the months and years ahead and I am delighted to have the opportunity to lead and help support that process. It is an exciting time for us not only in the UK, but also in South Africa.”

Last summer, Sigma announced plans to double its workforce to 3,000 by 2025 – in the UK and in South Africa.

Headquartered in Redditch, Worcestershire and with call centres facilities in Birmingham and Cape Town, South Africa, the company is celebrating its tenth anniversary this year and has won multiple industry awards. It now counts 14 UK energy providers as customers and specialises in debt recovery, customer care services and lead generation projects.

PayPlan appoints new Chief Operating Officer

PayPlan has appointed experienced strategic leader, Tasneem Bhamji, as Chief Operating Officer to transform its operation and lead its multi-channel debt advice service to meet increased demand.

Tasneem joins the national debt advice provider after her success as Head of Transformation at Lloyds Banking Group where she led cross-functional teams to transform Financial Wellbeing for customers. Current Woman of the Year winner at the 2020 Women in Credit Awards, Tasneem brings 10 years’ experience within the financial services sector, having also worked for HSBC and Santander in Operations and Conduct Risk roles respectively.

The appointment will strengthen PayPlan’s existing creditor and client relationships as the debt advice sector gears up for an increase in demand during 2021. Clients will need tailored support to help them cope during an unstable economic climate and Tasneem will ensure PayPlan delivers to all through an omni-channel service, utilising new digital innovations and partnerships.

Tasneem Bhamji, COO at PayPlan, said: “PayPlan already has an impressive record of delivering first-class debt advice across the UK and I am excited to join at a time where we can make a real difference in how we support our clients.

“With a further increase in digital demand anticipated, it’s more important than ever that the advice sector is fully equipped to offer quality, multi-channel support to all – and I look forward to leading that transformation.”

Rachel Duffey, CEO of PayPlan, said of Tasneem’s appointment: “Tasneem’s vast experience of strategic transformation and operations leadership makes her ideally placed to join PayPlan as our Chief Operating Officer.

“Over the next year, Tasneem will be instrumental in developing our digital offering and improving the experience for our clients. We have a clear vision of how to further the support we offer to people in debt – including how we support clients with vulnerabilities – and I look forward to working with Tasneem to take forward this pivotal transformation for the debt advice sector.”

Thornbury Collections Joins Forums International as a Corporate Partner

Forums International would like to take this opportunity to welcome Thornbury Collections as a Corporate Partner for our Credit Management Forum (CMF).

Laurie Beagle, Managing Director, Forums International said: “We are delighted that Thornbury Collections have decided to join Forums International as a Corporate Partner for the CMF. Their service offering aligns perfectly with the needs of our Credit Management Forum members and I believe this will be a fantastic partnership for both organisations”.

Formed in 2002, Thornbury Collection Services began life collecting clients’ unpaid invoices where their focus was that they never took sides. Their neutral stance is still at the cornerstone of their collections ethos and they aim to help both parties reach an amicable agreement which ensures future business for their clients. Building on this foundation, they began helping their clients, and ultimately their own clients too, with all manner of cash flow issues.

They are members of the CICM, and in March 2021 they were ranked in the Top 20 DCAs in the UK.

Thornbury Collection Services are based in South Wales but cover the whole of the UK with a satellite office In Leeds, that deals with construction debts and another in Southend, that deals with bulk B2C work. They deal with a wide range of clients, from 1-man bands to multi-national companies.

Steve White, the Managing Director of Thornbury Collection Services said “The next quarter in the Credit profession is going to be a challenge and we are looking forward to contributing and helping those in the Forums International community”.