Arrow Global Group PLC "the Company" and its subsidiaries (together "the Group"), a leading European purchaser and manager of debt portfolios, is pleased to announce its preliminary results for the year ended 31 December 2015.
Commenting on today's results, Tom Drury, chief executive officer of Arrow Global said:
"2015 was another record year for Arrow Global and another year of delivery on our targets. Adjusted EBITDA was up 51.5% to £153.1 million, net underlying income was up 19.6% to £35.4 million and we delivered a strong ROE of 26.5%. Reflecting this performance, and our confidence in the future, we are proposing a 39.4% increase in the full-year dividend to 7.1p, representing a 35% pay-out ratio.
"We have continued to strengthen the Arrow Global franchise, successfully diversifying the business by asset class, geography and revenue stream. We are a market leader in both UK and Portugal, have increased our investment in the Netherlands and retain our 15% interest in French market leader, MCS. Overall, we invested £216.3 million, including £180.3 million of portfolio acquisitions, and grew ERC by 12.8% to more than £1.2 billion.
"A strong focus on operational excellence and reducing overheads, combined with the growth in our increasingly integrated servicing businesses, means we are well placed to offer our customers the service that best suits their needs. As we continue to grow our service capabilities and actively seek out new strategic partnerships and opportunities, we anticipate servicing revenues of around 15% of Group revenue in 2016.
"We are an increasingly well diversified business, with a strong origination pipeline - starting the year with awarded purchases of £71 million. We therefore remain confident in maintaining portfolio investments at approximately twice our average annual replacement rate of £78 million. This, combined with the continued delivery of the Capquest and Whitestar business cases, will support positive earnings growth in 2016, ROE in the mid-twenties in the medium term and the continuation of our progressive dividend policy."
Final dividend of 5.4p proposed bringing total dividends for 2015 to 7.1p per share; a 35% pay-out and an increase of 39.4% over 2014
Underlying basic and diluted earnings per share (EPS)1 of £0.20 (2014: £0.17) delivering underlying return on equity (ROE)1 of 26.5% (2014: 26.1%)
Total revenue up 49.5% to £165.5 million (2014: £110.7 million), driven by core collections up 47.1% to £218.5 million (2014: £148.5 million), leading to an increase in adjusted EBITDA up 51.5% to £153.1 million (2014: £101.0 million); adjusted EBITDA ratio 70.0% (2014: 68.0%)
Profit before tax up 62.8% to £39.3 million (2014: £24.1million) leading to a profit attributable to shareholders up 73.8% to £31.7 million (2014: £18.3 million) and net underlying income up 19.6% to £35.4million (2014: £29.6 million) Over £200 million invested during the year, including organic portfolio purchases of £176.3 million with a face value of £1.5 billion
Increased total purchased loan portfolios2 from £477.5 million to £586.3 million with 120-month ERC up 12.8% to £1,224.5 million at 31 December 2015 (2014: £1,085.4 million) and 84-month ERC up 14.6% to £1,028.6 million at 31 December 2015 (2014: £897.3 million)
Acquisition of Whitestar and Gesphone in Portugal, creating scale and servicing capability across multiple asset classes
Successfully issued €110 million bond
Net debt of £588.6m and net debt to adjusted EBITDA ratio of 3.8x, balance sheet liquidity further strengthened with our Revolving Credit Facility (RCF) increased to £180 million in February 2016
