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Lowell’s cash EBITDA holds firm, as portfolio acquisitions drop 30%

Debt purchaser Lowell has posted full-year results showing its cash EBITDA stayed at just under £500m, despite a 29% fall in portfolio acquisitions to £281m.

The financials for 2020, a year in which lenders paused debt sale activity after the initial lockdown, show the company posted cash EBITDA of £494m - very close to the 2019 level of £496m.

 

According to the results, collections have continued to demonstrate resilience. The debt purchaser said cumulative performance against its December 2019 static pool forecast improved to 94% in December 2020, up from 93% in September 2020. The ‘static pool’ term used in Lowell’s results, reflects the collections expectation on the assets by assessing performance of portfolios at year end.

 

Lowell’s results also revealed a six percent decrease in cash income last year. The UK continues to be the group’s largest region of operation, accounting for 54% of group cash EBITDA, 120-month estimated remaining collections of £2.1bn and eight million active customers.

The results explained that Lowell’s UK business has increased outbound customer contact activity to volumes more in line with Q1 2020, prior to the outbreak of the pandemic. Since August 2020, the business has resumed new legal collections.

 

Refinancing

Lowell also refinanced the group’s capital structure last year, raising £1.7bn of high yield bonds due in 2025 and 2026, and extending its €455m revolving credit facility to 2025. The refinancing was supported by a £600m equity contribution.

 

The results stated that Lowell’s liquidity remains strong, with £466m of funds available as at December 2020.

 

Colin Storrar, group chief executive, said: “I am very happy with the financial performance last year both in terms of the profit delivery but also the strengthening of the balance sheet in the face of the global pandemic.”

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