Lowell Third Quarter Results 2022

Lowell, a European leader in credit management services, today announces its results for the 3 months ended 30 September 2022.

Commenting on today’s announcement Colin Storrar, Group Chief Executive Officer, said: “These results demonstrate the continued underlying delivery of our business. The Group is performing in line with our June reforecast and the DACH region continues to show pleasing progress in its recovery following the Cyber incident in Q1.

“The deconsolidation of the publicly rated ABS facility is a key milestone, providing a repeatable funding source which will allow the Group to recycle capital and crystalise returns earlier in the investment cycle.

“Our run rate on purchases has peaked following a strong LTM period, and we expect purchases to be more closely aligned to our Replacement Rate as we move through into 2023.”

Key Highlights

  • Completion of the Hoist UK acquisition
  • Deconsolidation of the publicly rated ABS following the sale of 51% of the Junior Notes
  • LTM Cash EBITDA increasing to £583m (£504m)
  • +530bps LTM Margin accretion to 61% (56%)
  • £178m LTM free cash generated
  • £577m of LTM Portfolio Acquisitions (£320m)
  • Strong liquidity at the end of the quarter of £543m

(Note: comparable numbers for LTM Q3-21 in brackets)

Key Financial Highlights

As at 30 September 2022 LTM Q3-22 LTM Q3-21 Change
Cash Income £954m £904m +6%
Cash EBITDA £583m £504m +16%
Cash EBITDA Margin 61% 56% +530bps
Portfolio Acquisitions £577m £320m +80%


The business has deployed a significant amount of capital across the last twelve months on unique and attractive opportunities which will support its long-term growth ambitions. The completion of the Hoist UK acquisition in Q4 further supplements this and the Group expects purchases to be more closely aligned to its Replacement Rate through 2023. These acquisitions, and ongoing collection initiatives, will be key drivers in ongoing growth and de-leveraging.

Group Financial Performance

Solid Performance Despite Wider Economic Environment

Cash EBTIDA growth of £79m YoY following acceleration of collections associated with the publicly rated ABS structure.

Underlying performance is broadly flat, with the Group benefiting from strong LTM margin performance despite known headwinds of DACH Cyber incident and UK collection softness. Margin progression reflects increased collection activity in the UK and some early signs of inflationary pressure on the cost base.

DACH recovery remains pleasing with September in-month backbook performance above 100%, strong levels of capital deployment in the region and the on-boarding of new servicing mandates in the quarter.

The Group continues to generate significant free cashflow after Replacement Rate, providing sustainable self-funding for growth and benefits from a strong liquidity position of £543m at Q3.

Leverage sits within the guided range of 4.0x – 3.5x at 3.7x, despite a continuing ~0.2x impact from the collection deferral in the DACH region. The Group expects to continue to operate comfortably within its leverage guidance.

UK Collections Performing in line with June Reforecast

The UK region continues to benefit from a significant proportion of payments from long term sustainable plans with its consumers.  These payment plans continue to be resilient, however there is some marginal softness visible in the value from settlement payments.

Despite this, UK collections have performed in line with the June reforecast which accounted for the expected rephasing of collections and default rates have remained low at ~5%.

Completion of Hoist UK Acquisition and Funding Model Further Strengthened

The acquisition of Hoist UK completed in October 2022 following FCA approval. The deal will be part financed through the new £170m ABS facility as previously announced.

Lowell completed the sale of 51% of Junior Notes held in the publicly rated ABS structure for £10m in August, which has resulted in deconsolidation of the associated assets and liabilities from the Lowell balance sheet.

This process allows the Group to recycle capital from the back book of assets earlier in the investment period and clearly demonstrates Lowell’s ability in rehabilitating consumer accounts from non-paying in to reperforming cashflows.

Lowell continues to hold a minority stake in Junior Notes (49%) and will service the assets.