3rd Quarter Results

Arrow Global Group PLC

("Arrow Global" or "the Group" or "the Company")

Results for the nine months ended 30 September 2014

Arrow Global, one of Europe's largest and fastest growing providers of debt purchase and receivables management solutions, is pleased to announce its results for the nine months ended 30 September 2014.

Highlights

· Capquest acquisition expected to complete today1

· €225 million raised through the issuance of senior secured notes, due 2021, to fund the Capquest acquisition

· Core collections2 up 12.6% to £105.0 million (Q3 2013: £93.3 million)

· Adjusted EBITDA up 11.2% to £71.9 million (Q3 2013: £64.7 million); adjusted EBITDA ratio 68.5% (Q3 2013: 69.4%)

· Profit attributable to shareholders up 36.8% to £17.0 million (Q3 2013: £12.4 million)

· Underlying net income up 9.5% to £20.2 million (Q3 2013: £18.5 million) - prior year comparative period included a portfolio write up of £4.7 million

· Acquired debt portfolios with face value of £1,173 million for an aggregate purchase price of £122.9 million, with a 120-month gross cash on cash multiple of 2.2x

· 120-month ERC3 up 28.6% to £836.3 million at 30 September 2014 (31 December 2013: £650.3 million)

· Underlying basic and diluted earning per share ("EPS") of £0.12

· LTM4 underlying return on equity ("ROE") of 24.7%

· Net debt £255.7 million and Net Debt to LTM Adjusted EBITDA ratio of 2.6x

· Moody's upgrade of Arrow Global's corporate rating to B1

· RCF increased to £100 million on completion of the Capquest acquisition and extended to 2019

Notes:

1. Capquest results to be consolidated following anticipated completion on 28th November 2014

2. Core collections are collections on Arrow Global's purchased loan portfolios, excluding proceeds from asset disposals

3. Estimated remaining collections

4. Last Twelve Months ("LTM") is calculated by the addition of the consolidated financial data for the year ended 31 December 2013 and the consolidated financial data for the nine months to September 2014, and the subtraction of the consolidated financial data for the nine months to September 2013

A glossary of terms can be found on pages 25 to 27 which includes a reconciliation of adjusted EBITDA. The directors believe that the presentation of the adjusted EBITDA measure allows the users of the financial statements to gain a better understanding of the underlying performance of the business

Tom Drury, chief executive officer of Arrow Global commented:

"Arrow Global's Q3 results demonstrate yet another strong quarter of growth as we continue to deliver against our key strategic ojectives.

"The acquisition of Capquest, announced in September, is expected to complete today following shareholder approval and a successful Eurobond issue earlier this month. We have already made significant progress in our plans to integrate the two businesses and are very confident that we will be able to deliver the envisaged cost savings.

"Excluding our purchase of Capquest and its associated portfolios, we expect full-year portfolio purchases to be in line with previous expectations.

"Our strong performance and growth is expected to continue and we remain on track to deliver overall full-year results in line with our expectations.

"The debt purchase markets in both the UK and mainland Europe are expected to continue to grow and we are well placed to take advantage of this. We remain a well funded, highly cash generative business and we have a strong pipeline of opportunities into 2015."

28 November 2014

For further information:

There will be a conference call for investors today at 2pm (UK time). Dial in details below:

Participant dial in UK: 08006940257

Participant dial-in International:+44 (0) 1452 555566

Conference ID: 37369351

About Arrow Global (for further information please visit the company website: www.arrowglobalir.net)

Forward looking statements

This document contains statements that constitute forward-looking statements relating to the business, financial performance and results of the Group and the industry in which the Group operates. These statements may be identified by words such as "expectation", "belief", "estimate", "plan", "target", or "forecast" and similar expressions or the negative thereof; or by forward-looking nature of discussions of strategy, plans or intentions; or by their context. All statements regarding the future are subject to inherent risks and uncertainties and various factors could cause actual future results, performance or events to differ materially from those described or implied in these statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. Further, certain forward looking statements are based upon assumptions of future events which may not prove to be accurate and neither the Company nor any other person accepts any responsibility for the accuracy of the opinions expressed in this document or the underlying assumptions. The forward-looking statements in this document speak only as at the date of this presentation and the Company assumes no obligation to update or provide any additional information in relation to such forward-looking statements.

Business and financial review of the nine months to 30 September 2014

The Q3 results show Arrow Global's continued progress towards its stated vision of becoming Europe's leading purchaser and manager of debt. Our board and senior management team remains focussed on delivering our core strategy, including pursuing diversification through a disciplined approach to geographic expansion and new asset classes.

Key results

* September 2013 and 31 December 2013 balances include £0.5 million of student loan investments held as loan notes

Portfolio acquisitions and overview

For the nine months ended 30 September 2014, we acquired debt portfolios with a face value of £1,173.2 million for a purchase price of £122.9 million. Of these portfolios, £152.7 million comprises paying accounts, representing 42.1% of the purchase price. This mitigates our downside risk on these portfolios, whilst we use our data assets to seek to penetrate the £1,020.5 million of non-paying accounts.

These acquisitions, net of amortisation, have increased the balance sheet value of our purchased loan portfolios to £362.8 million at 30 September 2014 (31 December 2013: £273.9 million). As at 30 September 2014, the total face value of assets under management was £10.7 billion, including purchased portfolios of £8.4 billion across 5.5 million customer accounts.

Our data-driven approach is a key strategic differentiator and drives purchasing and collections activities, giving us a greater level of insight and accuracy in our modelling and operations. Our Proprietary Collections Bureau has 18 million records, representing 7.1 million unique customers.

Collections

Core collections increased to £105.0 million (Q3 2013: £93.3 million), reflecting the increase in our portfolio assets base. In addition we have received £4.3 million from our regular IVA disposals which were included in our ERC forecast. As at 30 September 2014 we have cumulatively collected 102% of our original underwriting forecast.

Collection costs

We continue to use our data capabilities and benefits from our outsourced model to maintain collection cost efficiency. During the nine months ended 30 September 2014 there was an increase in the collection cost ratio, to 23.0% (Q3 2013: 22.5%) reflecting additional collection related costs associated with Portugese litigation. We expect this higher cost ratio to continue through Q4 2014.

Adjusted EBITDA

Adjusted EBITDA is our proxy for free cash flow. For the nine months ended 30 September 2014 adjusted EBITDA increased by £7.2 million (11.2%) to £71.9 million (Q3 2013: £64.7 million). This was mainly driven by an increase in core collections net of collection costs. The adjusted EBITDA ratio was 68.5% (Q3 2013: 69.4%), reflecting additional Portguese costs to collect.

Underlying net income

Underlying net income increased 9.5% to 20.2 million for the nine months ending 30 September 2014 (Q3 2013: £18.5 million).

Portfolio overview

Our 120-month ERC - our expected collections from our back book - has increased by £186.0 million from 31 December 2013 to £836.3 million. The ERC is underpinned by paying accounts that have a face value of £1.1 billion, which represents 1.3 times 120-month ERC cover. As at 30 September 2014, we estimate the amount we would need to invest over the next year to maintain our current ERC level is circa £50 million.

Funding, net debt and net assets

In the nine months ended 30 September 2014 we purchased portfolios with a face value of £1,173.2 million for £122.9 million.

The revolving credit facility is currently drawn by £28.6 million to September 2014 - leaving undrawn amounts of £53.9 million. Following completion of the Capquest acquisition the facility has increased to £100 million from £87.5 million, maturing in 2019.

Net debt at 30 September 2014 was £255.7 million, being 2.6 times LTM adjusted EBITDA and a net debt/84-month ERC loan to value ratio of 36.1%, which is significantly below our financial covenants of 75%. These ratios have increased due to timing of the funding of portfolios in September 2014.

On the 26 November 2014 the shareholders approved the acquisition of the Capquest group. To fund this €225,000,000 senior secured floating rate notes due 2021 were issued. The notes bear interest at a rate per annum equal to three-month Euro Interbank Offered Rate (EURIBOR) plus 5.25% per annum.

Net assets increased by £15.6 million during the period, largely reflecting the retained profit for the period.

Shareholder returns

Underlying basic and diluted EPS for the nine months ended 30 September 2014 was 12p (31 December 2013: 16p), and LTM underlying ROE 24.7% (31 December 2013: 26.5%).

Outlook

We will continue to focus on fully integrating the Arrow Global and Capquest businesses now we have successfully completed the acquisition. We have already made significant progress on these plans and are very confident that we will be able to deliver the cost savings envisaged.

Outside of our purchase of Capquest and its associated portfolios, we expect full-year portfolio purchases to be in line with previous expectations.

Our strong performance and growth is expected to continue and we remain on track to deliver overall full-year results in line with our expectations.

The debt purchase markets in both the UK and mainland Europe are expected to continue to grow and we are well placed to take advantage of this. We remain a well funded, highly cash generative business and we have a strong pipeline of opportunities into 2015.

Directors' responsibilities statement in respect of the results for the nine months ended 30 September 2014

We confirm that to the best of our knowledge:

· the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

· the management report includes a fair review of the information required by:

a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first nine months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining nine months of the year; and

b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first nine months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

28 November 2014

Principal risks and uncertainties

We have an enterprise-wide risk framework in place, which sits alongside the strategic business plan and is designed to support the identification, assessment, management and control of material risks that threaten the achievement of our business objectives. Risks are categorised as: strategic risk, conduct risk, operational risk and financial risk.

Unaudited Consolidated Statement Of Comprehensive Income

For the nine months ended 30 September 2014

Unaudited Consolidated Statement Of Comprehensive Income

For the three months ended 30 September 2014

Unaudited Consolidated Balance Sheet As At 30 September 2014

Unaudited Consolidated Statement Of Changes In Equity For The Nine Months Ended 30 September 2014

Any exchange differences are recycled to the statement of comprehensive income.

Own share reserve

The own share reserve comprises the cost of the Company's ordinary shares held by the Group. At 30 September 2014 the Group held 244,814 ordinary shares of 1p each, held in an employee benefit trust. This represents 0.1% of the Company share capital at 30 September 2014.

Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Merger reserve

The merger reserve represents the reserve generated upon consolidation of the Group following the acquisition of Arrow Global One Limited.

* Other reserves total £278,036,000 deficit (31 December 2013: £277,848,000 deficit, 30 September 2013: £278,739,000 deficit)

Unaudited Consolidated Statement of Cash Flows for the Nine Months Ended 30 September 2014

Notes

1. Statutory Information

Arrow Global Group PLC (the "Company") is a company domiciled in the United Kingdom. The condensed consolidated financial statements of the Company as at and for the nine months ended 30 September 2014 comprise the Company and its subsidiaries (the "Group").

This condensed set of consolidated financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. They do not include all of the information required for a full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2013.

The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, these financial statements have been prepared applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated annual report for the year ended 31 December 2013.

The consolidated financial statements of the Group as at and for the year ended 31 December 2013 are available upon request from the Company's registered office at Belvedere, 12 Booth Street, Manchester, M2 4AW or online at www.arrowglobalir.net.

The comparative figures for the financial year ended 31 December 2013 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditor and delivered to the registrar of companies. The report of the auditor was

(i) unqualified

(ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and

(iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. The financial statements of the Group have been prepared under the historical cost convention other than the fair value of derivative contracts and the amortised cost value of portfolio assets. The accounting policies are the same as those given in the annual report and accounts for the period ended 31 December 2013.

After making appropriate enquires, the directors have a reasonable expectation that the Company and the Group will be able to continue in operational existence for the foreseeable future, owing to the fact that forecasts show sufficient resources are available throughout the period under review. Thus, they continue to adopt the going concern basis of accounting in preparing the quarterly results.

2. Finance income

3. Finance costs

4. Earnings per share

5. Dividend

A dividend of £3.0 million was declared during the nine months to 30 September 2014 (2013: £nil).

6. Tax

The applicable corporation tax rate for the nine months to 30 September 2014 was 21.5% (30 September 2013: 23.25%). The Group's effective consolidated tax rate for the nine months ended 30 September 2014 was 22.5% (30 September 2013: 30.0%). The effective tax rate in the period to 30 September 2013 was unusually high due to non deductible non recurring expenses and overseas tax differences no longer applicable this year. The current period effective rate tax is reflective of the applicable corporate tax rate for the year and reconciling items.

Non-recurring tax

We have identified non-recurring items in the nine months to 30 September 2014 amounting to £4,007,000 (30 September 2013: £7,230,000).

7. Non-recurring items

Non-recurring items are items that, by virtue of their size and incidence, are not considered to be representative of the underlying performance of the Group.

Non-recurring items amounted to £4.0 million, mainly due to a provision for resolution of a historical tax issue of £2.4 million and share option charges in relation to the IPO of £1.3 million.

In the nine months ended 30 September 2013, the non-recurring items included in other operating expenses and finance costs represented goodwill impaired in connection with the acquisition of Arrow Global Accounts Management Limited, costs associated with the senior secured notes issuance and restructuring costs.

8. Financial assets

Purchased loan portfolios

The Group recognises income from purchased loan portfolios in accordance with IAS 39. At 30 September 2014, the carrying amount of the purchased loan portfolio asset was £362,779,000 (31 December 2013: £273,932,000).

The movements in purchased loan portfolio assets were as follows:

* inclusive of capitalised portfolio expenditure of £2,382,000 (31 December 2013: £1,759,000)

9. Trade and other payables

The directors consider that the carrying amounts approximate to their fair value on the basis that the balances are short term in nature.

10. Related party transactions

The Company is the ultimate parent entity of the Group. Intercompany transactions with wholly owned subsidiaries have been excluded from this note, as per the exemption offered in IAS 24.

Related party balances as at each period end were as follows:

Summary of transactions

During the period to 31 December 2013 GKV Limited, owned by director Gillian Key-Vice charged the Group £1,546 in relation to consultancy services provided on Group projects.

11. Borrowings

Senior secured notes

On 29 January 2013, the Group issued £220 million of 7.875% senior secured notes due 2020 (the "senior secured notes"). Net proceeds of £211.2 million included issuance costs that were capitalised within the financial instrument. The proceeds from this issuance were used to repay the bank loans, shareholder loans, and the non-controlling interest loan in full resulting in recognition of a £3,036,000 amortisation of previously capitalised transaction costs. In addition, there was a cancellation fee of £880,000 for early settlement of the revolving credit facility in place at that time.

The senior secured notes can be redeemed in full or in part on or after 1 March 2016 at the Group's option. Prior to 1 March 2016 the Group may redeem, at its option, some or all of the senior secured notes at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, plus an applicable "make-whole" premium. The notes are secured by substantially all of the assets of the Group. Interest is paid bi-annually.

Revolving credit facility

On 29 January 2013, the Group entered into a revolving credit facility (the "revolving credit facility") with The Royal Bank of Scotland plc ("RBS"), as security agent for a consortium of participating financial institutions. The revolving credit facility terminates on 28 January 2018 and bears interest at a rate per annum equal to LIBOR or EURIBOR (as applicable) plus certain mandatory costs and a margin of 3.00% per annum, subject to a margin ratchet based on the loan-to-value ("LTV") ratio at each quarter end. The new revolving credit facility was increased to £82.5 million on 16 September 2014. During the period the revolving credit facility was drawn down by £1,614,000, with total drawings of £28,650,000 at the 30 September 2014.

The Group is also required to pay a commitment fee on available but not utilised or not cancelled commitments under the new revolving credit facility at a rate of 40% of the applicable margin per annum on the undrawn portion of each lender's commitment. The new revolving credit facility is secured by the same assets as the senior secured notes. Interest is paid based on agreement when the facility is drawn down, payable every one, three or six months.

12. Segmental reporting

The Group represents a single reportable segment. Collections information is available for the UK and Portuguese operations. Such information does not constitute sufficient information upon which to base resource allocation decisions. This is the only information analysed between the UK and Portugal received on a regular basis by the chief operating decision maker ("CODM") and consequently one segment was identified. The CODM is considered to be the board of directors collectively.