After expanding across Europe via a flurry of acquisitions since coming to the public market five years ago, Arrow Global (ARW) is now focusing on organic growth, says chief executive Lee Rochford. With that in mind, and with net debt standing at four times adjusted cash profits, management hopes to bring down leverage by the end of this year and into 2019.
After signing a £300m co-investment partnership with an institutional investor earlier this year, asset management and servicing revenue continued to grow faster than the core investment management business, up almost a third to £60m. The adjusted cash profit margin for that business was 19 per cent, in line with management’s high-teens guidance, although it hopes to boost that to over 20 per cent by building its fund management services.
Debt portfolio purchases were a record £145m, up 16 per cent on the same time last year, taking 84-month estimated remaining collections up 10 per cent to £1.62bn. Core collections were also up 15 per cent to £178m, while the group had cumulatively collected 103 per cent of its original underwriting forecast by the end of June.
Analysts at house broker Shore Capital expect adjusted net assets of 115.2p per share at the December 2018 year-end.
| ARROW GLOBAL (ARW) | ||||
| ORD PRICE: | 259.5p | MARKET VALUE: | £ 457m | |
| TOUCH: | 258.5-259.5p | 12-MONTH HIGH: | 474p | LOW: 225p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 98p* | NET DEBT: | £1.08bn | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 150 | 4.92 | 2.1 | 3.2 |
| 2018 | 167 | 10.7 | 4.9 | 4 |
| % change | +11 | +117 | +133 | +25 |
| Ex-div: | 06 Sep | |||
| Payment: | 12 Oct | |||
| *Includes intangible assets of £216m, or 123p a share | ||||
