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Cabot increases portfolio collections to £176m

Cabot Credit Management (CCM) has recorded a 24 percent increase of collections on owned loan portfolios to £176m this year.


Marcel   LeGouais

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Marcel   LeGouais
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A recently published results update shows the total increase for the first half of 2016 compared to the same period in 2015.

 

However, the report also shows that loan portfolio purchases decreased nearly 50 percent year-on-year from £223m to £115m.

 

Ken Stannard, chief executive of CCM, said the decrease of 48 percent was mainly due to the purchase of debt collection agency, dlc, for £165m in the second quarter of 2015.

 

The debt purchaser recorded a 40 percent year-on-year growth of servicing revenue for the first half of 2016, from £8.6m to £12m.

 

The servicing revenue figure includes fees and commission received from collecting on outsourced portfolios.

 

During a conference and Q&A session with Stannard, and finance director, Craig Buick, they said litigation figures had been fairly constant at the start of this year compared to the start of 2015.

 

Stannard said that the UK market had been growing slowly, but UK-based portfolio returns have increased.

 

He added: “I think we’ve driven our returns up because we’ve been able to be a little bit more selective in what we buy in the UK as a result of now having five European markets to choose between.”

 

Cabot’s’ adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 29 percent from £91.1m to £117.9m for the first half of 2016 compared with the same period in 2015.

 

Stannard said the EBITDA growth was due to the increase of debt portfolio collections and servicing revenue.

 

The report recorded a £21.8m pre-tax profit in the first half of this year compared to £30.7m for the same period last year.

 

Debt buyers’ European expansion will be a key topic discussed at Credit Strategy’s upcoming Collections & Customer Services Conference later this year in Manchester on November 24.

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