27th Aug 2015 08:26
LONDON (Alliance News) - Arrow Global Group PLC, which buys and manages portfolios of debt in Europe, on Thursday said that a jump in operating profit did not translate into the same sort of increase in net profit for shareholders, a result of finance costs incurred as a result of the Eurobonds it issued to help finance the acquisition of Capquest.
The acquisition of Capquest was seen as an important step in Arrow Global's efforts to consolidate its position in the UK. The deal completed in November 2014. Arrow Global said it is confident about generating the "full synergy benefits" of about GBP6.5 million before tax in 2016.
"The synergy benefits run rate at the end of June 2015 was circa GBP400,000 per month. We have also begun to assess the potential for further benefits to make our model more efficient to maintain our UK competitiveness," the company said in a statement.
Arrow Global listed on the London Stock Exchange in October 2013, backed by Pollen Street Capital, a private equity team spun out of Royal Bank of Scotland Group PLC. Previously known as SOF Investments, Pollen Street Capital no longer owns shares in Arrow Global.
Operating profit increased by 40% to GBP33.0 million in the six months ended June 30, compared with GBP23.6 million in the corresponding half the prior year, driven higher as revenue rose by 49% to GBP76.7 million as a result of improved income from purchased loan portfolios and income from asset management. Pretax profit rose 21% to GBP16.4 million from GBP13.6 million.
Collection activity costs increased by 54% to GBP24.1 million, while other operating expenses, including costs from business acquisitions and its IPO, increased by 55% to GBP17.9 million. Finance costs, primarily due to the eurobond, swelled to GBP17.1 million from GBP10.3 million. Net profit attributable to equity shareholders increased by 25% to GBP12.9 million.
The company maintained its interim dividend at 1.7 pence per share.
Arrow Global shares were up 0.7% at 269.75 pence on Thursday morning.
By Samuel Agini; [email protected]; @samuelagini
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