8th Aug 2019 11:16
(Alliance News) - Credit manager Arrow Global Group PLC on Thursday reported a sharp jump in interim profit as the firm's core collections grew.
In the six months to June 30, Arrow Global - which buys debt from banks, credit card companies and telecommunications businesses - saw pretax profit triple to GBP32.5 million from GBP10.7 million the year before.
Arrow's core collections in the first half were up 14% year-on-year to GBP202.1 million from GBP178.0 million the year before. The company's third party asset management & servicing income increased 10% to GBP45.6 million.
"These are a strong set of results reflecting the strength, breadth and quality of the group's business. All key financial metrics have improved on last year. We have continued to generate asset purchases across our markets at attractive expected returns," said Chief Executive Lee Rochford.
Arrow's Asset Management & Servicing business ended the half with GBP52.0 billion in assets under management.
"Our AMS business continues to gather momentum, with further margin expansion enhancing our capital generation. We are now moving to establish broader third-party fund management business capabilities through the formation of AGG Capital Management Ltd, which we believe has the potential to transform our business model," added Rochford.
The company's total income increased 6.5% to GBP177.7 million from GBP166.9 million. Arrow's income from portfolio investments increased 5.1% in the period to GBP131.9 million.
Arrow's leverage at June 30 reduced to 3.6% from 4.0% the year before. The ratio stood at 3.7% at December 31. Leverage is a ratio showing secured net debt to last twelve months earnings before interest, taxes, depreciation, & amortization.
The company's 84-month estimated remaining collections stood at GBP1.75 billion at June 30 compared to GBP1.62 billion the year before, an 8.0% rise.
Arrow Global's 120-month estimated remaining collections stood at GBP2.08 billion at June 30 compared to GBP1.95 billion the year before, a 6.7% rise.
Arrow upped its interim dividend by 10% to 4.4 pence compared to 4.0p distribution the year before. The company noted the rise in is line with its policy to pay 50% of the previous year's final dividend.
Rochford added: "In order to ensure maximum efficiency and flexibility within our operations, we have undertaken a group-wide cost review, which is now being implemented. This will support the delivery of our strategic objectives and improve operating leverage over time.
"Strong cash generation remains an important characteristic of our business allowing us to invest for future growth, pay dividends and de-lever. We remain confident in our ability to finish the year within our target leverage range of 3.0 times to 3.5 times and to deliver on our broader medium-term financial objectives."
Shares in Arrow Global were 4.7% lower in London on Thursday at 253.60 pence each.
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