Arrow Global, a Manchester, UK-based buyer of delinquent debt from credit card companies and banks, reported that collections on the company's purchased loan portfolios rose 16% to 31.8 million pounds ($53.6 million) in the first quarter ended March 31. The company's profit in the quarter rose 17.6%
Arrow Global acquired debt portfolios with face value of 246 million pounds ($414.8 million) for 33.2 million pounds ($56 million) during the quarter.
"Key to Arrow's superior return is its ability to enhance the number of paying customers, which it typically enhances by 50% after the vendors and a number of debt collection agencies have already worked hard to collect on these accounts," Numis Securities analysts said in a note.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) rose to 22.3 million pounds ($37.6 million) from 19 million pounds ($32 million) a year earlier.
Arrow Global manages more than 8 billion pounds ($13.5 billion) of debt from businesses, including retail banks and credit card and telecom companies.
The company started trading its shares on the London Stock Exchange last fall. The companys stock launched at $3.30 (205 pence) per share.
Arrow at the time of the IPO owned and managed an estimated $12.5 billion of delinquent consumer debt.
The IPO raised an estimated $305 million, $80 million going to the company. The initial share price valued the business at $576 million. Since the IPO, the firms stock price has increased about 12.5%.
The company's work mostly involves using technology and data analytics to identify and track down debtors when their contact information has been lost by original lenders. Once it has the information it uses third-party collectors to pursue the debt.
The largest UK debt purchasers include Lowell Group, Cabot Credit Management, Arrow Global, CapQuest, Marlin Financial Group, Link Financial and Max Recovery.