Debt buyers Q3 2016 financial results at glance

Debt buyers listed announced their Third Quarter 2016 financial results.

Data show a growing trend on all fronts, from total revenues to investments in portfolios aquisition and predict a positive closure of the year.

As figures indicate, the majority of debt buyers aim to expand its own business, entering new markets, through M&A operations.

The article below represents a summary of key data contained in Third Quarter Reports of the debt buying companies considered.

Please find attached to this article full Third Quarter reports.

ARROW GLOBAL GROUP PLC

Headquarter: Manchester, UK

Stock of exchange: London, UK

Ceo: Tom Drury

Arrow Global was established in 2005 as the European subsidiary of Arrow Financial Services, a leading US debt purchaser. In 2009, the Group’s holding company was purchased by the RBS Special Opportunities Fund and in 2013 began trading on the London Stock Exchange. At the beginning of December 2016, Arrow agreed terms to acquire Italian company Zenith Service Spa.

Tom Drury’s Group, invested in the first 9 months of 2016 £154.6 million, to purchase portfolios with a FV of more £ 1,1 billion. By Purchase price including also Vesting Finance acquisition, a debt buyer operating in the Netherlands.

38% of the investments took place in UK, 34% in the Netherlands and 28% in Portugal; 43% of the purchased portfolios are unsecured, 39% are secured and 18% are performing.

Core collections increased by 38.9% to £216.1 million (Q3 2015: £155.5 million).

120-month ERC (Estimated remain collection ) has grown to £1.4 billion.

Source: Arrow Global

Arrow Global share performance

Source: Yahoo Finance

Intrum Justitia, the Swedish Group estabilished in 1923 – at present time under the international markets spotlight in reason of its merger with the Norwegian colossus Lindorff – closed Q3 2016 with key performance indicators growing compared to Q3 2015.

Revenues are SEK 1.486 million (€152,4 million), representing a 7% growth compared to Q3 2015.

Intrum Justitia is present in 19 countries, Northern Europe represents 47% of total revenues, Central Europe 29% and Western Europe 24%.

Cash flow from operations is SEK 837 million ( € 85,8 million) and investments in purchased debt have practically doubled compared with Q3 2015 as they reached SEK 646 million ( € 66 million)

INTRUM JUSTITIA AB

Headquarter: Stockholm, Sweden

Stock of Exchange: Stockholm, Nasdaq

Ceo: Mikael Ericson

Source: Intrum Justitia

Intrum Justitia share perfomance

Source: Yahoo Finance

HOIST FINANCE , another Swedish Group present in 11 European countries, has closed Q3 2016 in line with its competitors, with a significant growth of all key performance indicators.

Total revenues have grown from SEK 590 million in Q3 2015 to SEK 665 million in Q3 2016 (approximately € 70,5 million) and gross cash collections increased by 10%, from SEK 974 million in Q3 2015 to SEK 1, 075 million in Q3 2016 (€117,3 million).

Acquisition of loan portfolios, from July to September 2016 has been SEK 607 million (€ 66,2 million). In Q3 2015 acquisition of loan portfolios was SEK 1.982 million: this value was highly influenced by the Compello Holdings Limited transaction, representing SEK 1,469 million.

HOIST FINANCE AB

Headquarter: Stockholm, Sweden

Stock of Exchange: Stockholm, Nasdaq

Ceo: Jörgen Olsson

Source: Hoist Finance

Hoist Finance share performance

Source: Yahoo Finance

KRUK, the Polish Group, market leader in East Europe and with an expanding business especially in the Italian and in the Spanish market, announced its Q3 2016 financial result. Q3 2016 result indicate an important growing trend. In Q1−Q3 2016, net profit reached PLN 186 million (approximately € 41,8 million) representing a 48% rise compared with the previous period.

Total revenues have grown from PLN 449,2 million to PLN 542,3 million.

Recoveries from purchased debt portfolios reached PLN 701 million (approximately more than € 167 million). In the third quarter of 2016, KRUK reported PLN 255m in recoveries: it was the best quarterly performance on record.

Investments also reported a significant growth. In the first three quarters of 2016, the KRUK Group invested PLN 936m in 60 debt portfolios with a total FV of PLN 6.4 billion (approximately more than € 1,5 billion). KRUK expects the supply of debt portfolios to remain strong in the fourth quarter of 2016 and the first quarter of 2017.

At the end of 2016, KRUK closed 2 important transactions in Italy, with an increase of its purchased debt portfolios of € 1,7 billion (Unicredit’s portfolio and Banca Ifis’s portfolio)

KRUK Group

Headquarter: Wroclaw, Poland

Stock of exchange: Warsaw

Ceo: Piotr Krupa

Source : KRUK

KRUK share performance

Source: Yahoo Finance

PRA, the American group based in Norfolk, Virginia and headed by Steve Fredickscon, closed Q3 2016 with cash collections of $ 371 million versus $ 380 million in the prior year period.

Also total revenues decreased: from $ 229 million in Q3 2015 to $ 222 million in Q3 2016.

Cash collections for the first nine months of 2016 were $1,143.2 million versus $1,170.1 million in the previous year period

For the nine months ended September 30, 2016, total revenues were $ 675.3 million versus $711.8 million in the prior year period.

ERC (Estimated remaining collection) value is especially significant : $ 5,52 million as at September 30.

Investments in purchased debt were $ 161 million in Q3 2016.

PRA Group

Headquarter: Norfolk, USA

Stock of exchange: USA, Nasdaq

President and Ceo: Steve Fredickscon

PRA Group perfomance share

Source: Yahoo Finance

Encore Capital, the Californian Group, in Q3 2016 invested in receivable portfolios $206 million, up 20% compared to the same period a year ago.

Gross collections declined 4% to $407 million, compared to $422 million in the same period of the prior year.

Total revenues were $179 million as total operating expenses decreased 19%, reflecting the benefits of strategic cost management programs.

Adjusted operating expenses per dollar collected for the portfolio purchasing and recovery

business, also known as cost-to-collect, increased : it was 41.1%, compared to 39.2% in the same period of the prior year.

The increase reflected the impact of some adjustment costs due to UK Cabot, purchased by Encore Capital in order to strengthen its position in the European market.

In Q3 2016 Estimated Remaining Collections (ERC) increased 1% to $5.73 billion.