Cabot Credit Management Announces Financial Results for the Period Ending 31 March 2016

Cabot Credit Management (CCM), a market leader in European credit management services, today announced the financial results for the period ending 31 March 2016.

“During this first quarter we have continued to expand our European business by acquiring a credit management business, Nemo, in France,” said Ken Stannard, Chief Executive Officer. “We are already building on the success of last year and have achieved further strong returns and profitable growth. Our adjusted EBITDA of £56.9 million is up 27% from last year.”

“Our portfolio purchases have started strong with £68.3m this quarter, three times more than in Q1 2015, with 82% of this capital deployed outside the UK market.

“We are the first major debt purchaser to achieve our UK FCA authorisation and look forward to leveraging this in the market place this year. We are continuing to keep our customers at the heart of our business which was recognised at our industry awards recently where we won the Treating Customers Fairly award for the second year running.”

Highlights

Sustained growth for Cabot Credit Management

  • 120-month Estimated Remaining Collections (ERC) increased to £2.0 billion from £1.6 billion for the same period in 2015

  • Debt purchase collections increased 26% from £69.7 million to £87.6 million compared to the same period in 2015

  • Adjusted EBITDA increased 27% from £44.7 million to £56.9 million compared to the same period in 2015

 

Business strategy and operations

  • Continued growth in non UK business, with £56.1 million of non UK portfolio purchases in Q1’16 and 15% of revenues now generated from non-UK businesses

  • Service revenues continue to grow, up 32% compared to 2015, and now representing 8.5% of total revenues

  • CCM won the Treating Customers Fairly Award for the second year running at one of the industry’s most respected events run by Credit Strategy.

  • CCM is well on its way to creating a new centre of excellence in Brackley which will house dlc and the Apex contingency business

Regulatory

  • On 11 March 2016 Cabot Credit Management obtained FCA authorisation and is the first major debt purchaser and servicer to achieve it.

 

Key financial results

Three months to March 16

Three months to March 15

% Change

Adjusted EDITDA

£56.9m

£44.7m

+27%

120 month Estimated Remaining Collections (ERC)

£2.0bn

£1.6bn

+25%

Debt Purchase Collections

£87.6m

£69.7m

+26%

Debt Purchase Collections Plus Servicing Income

£93.0m

£73.9m

+26%

Portfolio Purchases

£68.3m

£14.1m

+386%

 

Teleconference

At 14:00 hours (GMT) on 26 May 2016, Cabot Credit Management will hold an audio conference presentation on the company’s performance. For further details, please visit the Cabot investor website at www.cabotcm.com/investors.

 

About Cabot Credit Management

Cabot Credit Management (CCM) is a market leader in credit management services including debt purchasing, contingency collections, business process outsourcing and litigation. The Group encompasses four UK businesses namely including Cabot Financial, dlc, Apex Credit Management, and Mortimer Clarke Solicitors (a specialist litigation law firm, authorised and regulated by the Solicitors Regulation Authority) and three European businesses Cabot Financial Ireland, Gesif and Nemo.

From its inception in 1998 to 31 March 2016, CCM has invested £1.8 billion in acquiring portfolios with a Face Value in excess of £19.1 billion. CCM has an ERC (estimated remaining collections) of £2.0 billion. It manages in the region of £1 billion of assets on behalf of clients, collects on average over £45 million per month on portfolios it either owns or services on behalf of clients, and has delivered a consistently strong financial performance, having grown its business in each of the last 16 years without exception.

The Group, which has purchased over 7 million customer accounts, employs approximately 1,500 people with offices in Kings Hill, Brackley, Worthing, London, Dublin, Madrid, Paris, Lyon and Marseille. The company prides itself on its ethical values, customer service and high standards. It has an impressive list of accolades including:

  • Investors in People Gold and Champion awards

  • Treating Customers Fairly Award 2015 and 2016, Credit Strategy

The controlling shareholder of Cabot Financial is Encore Capital Group, an international speciality finance company providing debt recovery solutions. The remaining equity is held by a fund advised by J.C. Flowers & Co., in addition to company management.

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