Arrow Global points to Europe as half year earnings jump

DATA-led debt purchase specialist Arrow Global maintained its track record of strong performance as it posted half year figures and reported its maiden interim dividend.

The Manchester company, which listed on the stock market last year,  said highlights of the six months to the end of June include increasing its presence in the Portugese market with debt portfolio purchases there, and also established a presence in the Netherlands for the first time.

Core collections on its existing UK and Potugal-based debt portfolios were up nearly 11% to £69.3m, while adjusted EBITDA was 10.6% ahead at £48m. Arrow Global, which buys the debt from banks and credit card companies and most recently the Government via Student Loans, said it would pay investors 1.7p per share.

The company said it had bought “good quality loan portfolios” with a face value of £1.05bn for a total of £99.3m. It will now use its own systems and analytics to trace the borrowers and agree repayment terms.

Hailing a “strong” first half chief executive Tom Drury said: “We maintain our focus on targeted European expansion and I am delighted that we have secured the necessary license to operate in Holland – including completion of a €1m pilot portfolio investment.

“With the regulatory environment set to tighten further, debt purchase markets are entering a period of increasing consolidation which we expect will see the emergence of a core group of industry leaders. We continue to assess a number of opportunities in European geographies with favourable market dynamics and we also have good visibility of a strong pipeline in the UK.”

Mr Drury said the maiden interim dividend was a “significant milestone” for the company and one which reflects its highly cash generative business model.

He added: “We remain committed to finding attractive loan portfolios in both UK and European markets and continue to pursue a strategy to diversify our investments by both asset class and geography.  Underpinned by a strong start to the year, we remain on track to deliver overall results in line with our expectations for the full year.”