Arrow Global (ARW) intends to continue its march across Europe via its acquisition of UK and Ireland mortgage servicing company Mars Capital for an enterprise value of £15.5m. The purchase would represent its first foray into the Irish distressed debt market. Chief executive Lee Rochford says the market is attractive because of the large number of non-performing loans still on banks’ balance sheets and the desire by these lenders to continue to deleverage, despite some recovery in the sector.
After completing its purchase of Zenith Services during the first half of the year, management committed to acquiring two small loan portfolios for €10m (£9.2m). Arrow Global grew its assets under management in Italy by €2bn since the start of the year by using Zenith’s relationships with institutional investors in the country.
In total, the distressed debt collection specialist increased its organic loan portfolio purchases by almost a third to £125m, with a face value of £968m. Core collections were up 11 per cent as a result of its growing asset base. Expected remaining collections for the next 84 months – an important pipeline measure – rose almost a quarter year on year to £1.5bn.
Analysts at Shore Capital expect adjusted net assets of 107p a share at 31 December 2017.
| ARROW GLOBAL (ARW) | ||||
| ORD PRICE: | 466.75p | MARKET VALUE: | £818m | |
| TOUCH: | 466-466.75p | 12-MONTH HIGH: | 480p | LOW: 250p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 58 | |
| NET ASSET VALUE: | 93p* | NET DEBT: | £930m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 102 | 20.5 | 9 | 2.7 |
| 2017 | 150 | 4.9 | 2 | 3.2 |
| % change | +47 | -76 | -78 | +19 |
| Ex-div: | 7 Sep | |||
| Payment: | 3 Oct | |||
| *Includes intangible assets of £184m, or 105p a share | ||||
