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Lowell posts growth in estimated collections and cash income

Debt purchaser Lowell has posted growth in cash income, EBITDA and its 120-month estimated remaining collections (ERC) figure, in a Q1 trading update, despite purchases falling during the quarter.

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The financials show Lowell’s cash income increased seven percent to £952m, from £892m in Q1 2019, while cash EBITDA also rose 14 percent to £508m, from £444m in the first quarter last year.

 

As many lenders paused debt sales to assess customers’ needs during the first three months of 2020, Lowell deployed £58m on portfolio acquisitions during the quarter. Overall, Lowell’s acquisitions dropped 11 percent compared to the same period last year.

 

Despite this, its 12-month ERC figure now stands at £3.4bn, a rise of nine percent on £3.1bn a year ago.

 

Colin Storrar, group chief executive, said: “The first quarter continued the momentum of 2019, and demonstrated a resilient business, with collection performance in line with our forecasts, continued strong cash flow generation and a robust liquidity position.

 

“We remain pragmatic in our assessment of the purchasing landscape, with a focus on maintaining that strong liquidity level. Where deals arise, we will invest for value, growth and the long-term benefit of the business.”

 

Lowell’s update says the business has “substantial available liquidity” of £257m, and “strong cash generation” of £300m. No pre-tax profit figures are included in the update.

 

Towards the end of Q1, Lowell announced a series of support measures for customers affected by coronavirus, which included extending breathing space from 30 to 90 days, waiving the addition of fees or extra charges, and committing to no new litigation claims or bailiff action during the crisis.

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