Lowell Group has posted pre-tax profits of £7.3m for the year to August 2011 following a rise in turnover, collections and earnings before interest, tax, depreciation and amortisation (EBITDA).
EBITDA, which Lowell uses as a main measure of operating performance, increased from £76.2m in 2010 to £83.7m for the year ending August 2011.
Collections on purchased portfolios also increased by over £15m to reach £120.1m in 2011, from £104.9m the previous year.
The pre-tax profit figure was lower than the £11m pre-tax profit posted in 2010, as both Lowell’s operating costs and interest payments on borrowings increased in 2011. The amount of interest the company paid on its borrowings increased to £30m from £25.5m in 2010.
James Cornell, chief executive of Lowell Group, said: “We are really pleased to report another strong year of performance for the Group, which is the result of the continued hard work and dedication of our people.
“We continue to develop a collection strategy that is centred on our ability to effectively assess a customer’s ability to pay through data intelligence and analytics, placing importance on the ethical and fair treatment of our customers.”
In its results statement, the company estimated its share of the debt purchase market at around 22% based on the value of debts purchased.
Lowell’s annual turnover generated from portfolios increased to £79.5m from £71.5m in the year to August 2011.
At the same time operating cash generation, which the firm defines as collections received minus servicing costs, working capital and expenditure, also increased to £82.6m in 2011 from £75.3m.
Since the results were calculated, the firm has placed a £200m high-yield bond with a 2019 maturity and an annual interest coupon of 10.75%, becoming the first UK debt purchaser to make such a move.
The proceeds of the issue will be used to refinance existing debt.