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Arrow and Cabot post double-digit growth in Q1

Debt purchasers Arrow Global and Cabot Credit Management both saw their revenues grow by more than 12 percent in the first quarter of the year, their latest financial results show.

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Cabot’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) show it brought in £90.1m in the three months to March 31, 2019, up from £79.6m at the same time last year.

 

Meanwhile, Arrow’s income grew to £86.6m in the first quarter, up from £77.1m in the corresponding period in 2018.

 

Cabot’s estimated remaining collections over 120 months stood at £2.7bn on March 31, 2019, up from £2.4bn at the same point in 2018.

 

Arrow’s estimated remaining collections over 120 months are £1.9bn, up from £1.8bn at the end of the first quarter of 2018.

 

Arrow generated £15.8m in profit before tax in the first quarter of 2019. Its share price stands at 196.4p per share, up from 177p per share at the start of the quarter, but significantly down on the same point last year, when it stood at 350p per share.

 

Lee Rochford, group chief executive at Arrow Global, said: “Our strong focus on returns and an improving pricing environment means that we took the decision in the first quarter to purchase fewer portfolios, conserving investment firepower for later in the year. Our strong pipeline visibility means that we remain confident in achieving around £250m of portfolio purchases at our target returns.”

 

Cabot cited its acquisition by Encore last year as a factor in an improvement in collections performance in its Spanish business. As a result of the deal, Cabot became a wholly-owned subsidiary of Encore.

 

Cabot has also moved to deleverage itself and is now down to 3.9 times equity.

 

Cabot chief executive Ken Stannard said: “We continued to grow our pipeline of Business Process Outsourcing opportunities as a result of the provision of our bespoke credit management solutions to help address our clients escalating needs.

 

“Towards the end of 2018, we have started on the journey to delivery upon our previously communicated deleveraging commitment.”

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