Arrow Global hits bulls-eye as it starts 2019 with profit rise
Arrow Global pushed up profits in the first three months of 2019 as total income grew to £86.6m, sending shares ticking up in early trading today.
Read more: Arrow Global shares rise on boosted full-year profits
The figures
The debt purchaser grew core collections 22.7 per cent year on year to £105.5m by the end of March 2019.
Total income rose 12.3 per cent to £86.6m as Arrow reduced portfolio purchases of debt to spend £56.4m, down from £80m in the corresponding quarter in 2018.
That helped it return to profit, recording a £15.8m profit before tax compared to a £7.6m loss in the same quarter last year.
Basic earnings per share also climbed to 6.1p, from a loss of 3.5p last year.
Why it’s interesting
The healthy results led Shore Capital to reiterate its Buy rating on the company, while chief executive Lee Rochford said its lower spend on portfolios means it can target £250m at future pipeline purchases later this year.
Arrow also diversified its debt, buying £100m of loan portfolios “at attractive cost and modest scale”.
Shares rose one per cent to 197p per share in early morning trading.
What Arrow Global said
Lee Rochford, group chief executive officer, 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.
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“Our strong pipeline visibility means that we remain confident in achieving around £250.0 million of portfolio purchases at our target returns.
“We remain confident that our target leverage range of 3.0x-3.5x is a sustainable level for the business.”