Share Name Share Symbol Market Type Share ISIN Share Description
Arrow Global Group LSE:ARW London Ordinary Share GB00BDGTXM47 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -14.75p -3.22% 443.25p 442.50p 444.75p 457.50p 436.50p 457.50p 266,561 16:35:27
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 188.9 31.4 15.0 29.6 790.93

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Date Time Title Posts
02/8/201712:28Arrow Global 984

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2017-08-22 16:01:25443.2540,000177,300.00O
2017-08-22 15:35:27443.2523,085102,324.26UT
2017-08-22 15:29:55444.5025111.13AT
2017-08-22 15:29:55444.506843,040.38AT
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Arrow Global Daily Update: Arrow Global Group is listed in the General Financial sector of the London Stock Exchange with ticker ARW. The last closing price for Arrow Global was 458p.
Arrow Global Group has a 4 week average price of 427.75p and a 12 week average price of 370.50p.
The 1 year high share price is 480p while the 1 year low share price is currently 228.50p.
There are currently 178,439,026 shares in issue and the average daily traded volume is 210,852 shares. The market capitalisation of Arrow Global Group is £790,930,982.75.
nurdin: Cracking results!
nurdin: Thanks Daveblower, all sounds very positive.The share price is starting to respond now.
funkmasterp12: No PW but the director sells stink imo, as soon as the lock-in expires they've dumped 8 mil "for personal portfolio reasons". They clearly feel the share price isn't going higher any time soon.
glaws2: Imranawan - no particular news I'm aware of. Share price has been range bound for the last 18 months despite the growth in the business and the acquisition. Perhaps the market is starting to account for this ?
cestnous: I dont understand that comment either webpax. He needs to elaborate which exact regulatory risk he's looking at. Doesn't seem to have harmed the share price so far though. Edit; shut my fat mouth.
billy_liar: If you are hoping for an improvement in share price based on historic squiggly lines on a chart, give up all hope now of successful investing, and go play online poker instead.
fruitninja84: SteMiS Im going to try and answer your question and hopefully convey a few of my ideas and try to give you an insight to my thinking here, bear with me.. I do alot of hours researhing before i buy, The obvious fact when you own shares in a company and have done most research just looking at a computer secreen and reading the info IS that bottom line you are just taking an educated punt!! Now think about this , unless you work for arrow or have insider knowlege of what is really going on (in any company) it really is just a case of buying a number and hoping it goes up! We not there so we just dont know how things really are.. But, there are the figures in the reports which in this case i like: REV growth up 40.26% from 31st Dec 12 Profit after tax and attributed to equity holders 25.1M from 11.1M a rise of 126.3 %! Which gives us an EPS of 16p THESE SHOULD BE USED AS THE REAL FIGURES however we get a profit after tax of 15.1M and EPS of 10p due to excepionals relating to IPO costs, restructing and share option charges ( look at note 8 in the f/y report) THIS IS ALL FINE AND DANDY as long as it does not keep happening year on year and in arrows case exceptionals last year 1.7m so with this info these exceptional look okay to me, Now.. Lets say we have the funds to buy a whole business! What would be a good return? If a company has a M/cap of say 208M but reports a profit of 3.4M (im using FXI as an example here) is this a good investment? I would say not as its going to take 60 Years for a return on your investment and to make money on top of that!! So why own its shares? This is of course if the company does not grow its earning.. These kind of shares are very speculative IMO and i try avoid as when markets turn they get hit the worst.. We all know that (in the case of FXI it was tipped more then once by a famous trader in a raging bull market so obv it shot up! Unlucky if you bought at the top :( ) Back to my valuing .. ARW, here we have a business with a M/cap of 383M and profit of 25.1m and growing.. Is this a good investment? I thought it was good enough to take a punt , the debt is a bit of an issue but i like what i see in the cashflow statement so im sure the company is not going bust anytime soon (if it does im a clown) SO if this is my business it would take me about 16 years to earn my money back and then some more if earning do not grow? I have little knowledge of arrows core markets but what i do know is that there is alot of debt about and arrow reads like it has a good pipeline of further market and rev to capture so im confident there is growth to come , they likely hound people that owe em money once they have bought that discounted debt but if it adds to the bottom line thats fine with me.. I also think the decline in share price is down to a few things happening at the same time leaving us share holders holding the baby :/ first the very large sale of shares by RBSslowly depressing the price over the course of a few months, second alot of people bought high after a famous trader tipped the share and got stopped out , plus traders looking for a short term short shorting the stock seeing its decline .. Plus in this bull market if something is going down and people are loosing money they sell up ! And last the recent decline in global markets dragging this down with it as people are already unsure .. (Notice how this started to rise again before global markets turned downwards last week) When i say i think this is fairly valued i want to stress i dont think its cheap! I posted here a while back saying i though a fairer price would of been 175p! But i think now its more 220p so its bang on the money imo.. If the company only ever earns 25m a year bottom line and does not make any acquisitions (which arw intends to do as far as we know) it would take about 16years for its retained earning pool to catch the current market if no dividends were paid to shareholders).. But im punting arw will grow and thus its share price will do too :) I have to say here too that the last results statement was better then i thought it was going to be, and that i believe alot of 'investors' inc my self dont really know how to read them properly, they just see broker forecasts and if the profits dont beat or eps slightly disappoint they sell! Seems like everyone and there dog is in the market.. Now if Arw tanks some more next week and goes below 215 i will not hesitate selling my shares 243 i paid ... I knew there were pricy then but the market was going up and it had momentum with it! They really could of gone either way to high valuation like most good shares right now!! Or down ? So i believe this is a good level to buy? If i had more confidence i would average down! But that goes against alot of good advice.. I hope you found my post useful and if you find any holes in my research please feel free to correct or criticise.. One last note its worth saying is that if the market does not like your share its going to be rough!! It does not matter how great the company is .. Look at the range KENTZ was stuck in for years!! Between 430 and 370, ridiculous!! Hugely undervalued as the market has now proved!! But mr market was not a fan of kentz fir a while so its share holders suffered (if you bought at the top of its range you be in a similar posistion you are in now with arw.. Other companies i like are SAG, SUS, TRCS, CAMB I ALSO love RTN, BOK, HLMA, but im waiting for the stock market to serve me up a bargain price before i buy any of the 3 above.. Which is happening right now! Good luck with your holdings and hopefully i wont get stopped out of here.. I do like to hold for the long term but if this breaks its IPO price the market could hate it!!
stemis: Nurdin - the company's statement would be true whether the share price was 50p, 350p or £10. It doesn't really inform the investor as to whether ARW is under or over valued. The price of ARW will be determined by institutions not IC or tip sheets like SCSW (both of whose research is pretty worthless). Institutions aren't really going to be swayed either by buy recs or share price targets from brokers. They'll make their own minds up.
cestnous: I suggest you read the figures in the SCSW article. The investment case is made very clear. Arrow Global - The hallmark of a reliable performer 238p Epic code: ARW (Sharewatch) Most of us live within our means, paying for things with real money but for some, the lure of easy money is too great and they'll borrow on credit as long as it is available to them. The mainstream lenders accept that a certain percentage will default but resign themselves to the fact that if they don't take risks they would be out of business. Typically after an account has defaulted, a lender has a number of options to recover any money owed. Many are circumscribed in their own ability to collect non-performing loans (quite often they don't want to risk reputations or wish to focus on their core operations) and so outsource the collections to specialist debt collectors; when they give up, they sell off portfolios to debt purchasers such as Arrow Global, which buys the distressed debt at a hefty discount and then tries to collect it. From a shareholder's point of view, the exciting thing is that it often manages to do it; returns are high and collections become almost annuity-like income streams, so much so that even before this year began c.82% of the profit forecast was already in the bag. Bottom-left-top-right charts The good old Financial Times said that Arrow is an "esoteric business" and others might call it "grubby" but it's rather churlish to say this. As chief executive, Tom Drury, said when I spoke to him, Arrow employs no men with shaved heads to recover money but instead uses technology and clever data analytics to identify and track down debtors after their contact information has been lost by the original lender. Once it has the information it uses third-party collectors to recoup the debt. The issue for investors of course is that the debt purchasing industry has only sprung up in the 1990s and Arrow is the only UK player to have floated so there is nothing to compare it to. But the industry is coming of age; like all consumer credit it is regulated by the Financial Conduct Authority and a sector analyst draws a parallel with the early days in the insurance underwriting industry, which has since matured and now has many successful listed companies. The analyst expects Arrow's shares (as do we) to rise as the story gets better understood and you only need to look at the charts for US peers Encore Capital (ECPG; US$49.6) and Portfolio Recovery Associates (PRAA; US$61.2) with bottom-left top-right share price formations to see it is a good augury. Placing raises £50m new money Manchester-based Arrow was set up in 2005 as the UK arm of a US debt purchaser and was acquired by the RBS Special Opportunities fund four years later so for the last few years the business has been part of RBS. The placing by broker Goldman Sachs last month appears a manoeuvre to disentangle the business from the state owned bank. The placing at 205p raised £50m new money for Arrow and there was also a secondary offering of £140m on behalf of selling shareholders (mainly RBS Fund, which still retains 29.2%). Chief executive Tom Drury, former chief executive at Shanks, the waste management group and a 5% shareholder at Arrow points out there are three key players in the UK debt buying market, Arrow, Cabot and Lowell, each with around 10%. What is important to understand is that these businesses do not singularly buy an individual's debt but instead buy "packages" of debt, when a lender sells it as a job lot. Written off debt more appealing for banks Creditors have a time limit to sell the debt before it becomes statute barred. This means anyone they might sell the debt to cannot use the courts to enforce payment obligations if it has been six years since the last payment was made (five years in Scotland and 20 in Portugal). The credit crunch nastiness saw a selling frenzy by the banks looking to reduce risk and tidy up balance sheets (selling the debt releases capital). But it also proved a double edged sword as Arrow and its rivals (which have typically been funded by private equity and bank syndicates) struggled to find funding for debt purchases. But conditions have now recovered and the banks have resumed the process of selling the £27bn recessionary backlog of debt whilst finding the money to buy debt portfolios has also become easier. Arrow raised £220m through a bond (with a 7.8% rate of interest) early this year but new money from the float is intended to enable it to purchase more packages using a lower interest rate. And this iceberg of defaulted bad debts available to buy is not getting much smaller. In the UK, £10 billion debt will be sold this year - an all time peak - but a stonking £8- £10bn fresh bad debt will be created. That's more than the previous £8bn record of bad debt sold in 2008. Debt is typically purchased through an auction process (sealed bids) or through an arrangement known as "forward flow" where Arrow agrees with a lender to buy several portfolios over an agreed period of time at a predetermined price. But the banks, mindful of the backlash when collection methods prove too rough, are increasingly picky about who they sell to and Arrow will also often buy the debt off-market says Drury. At the moment Arrow is concentrating mostly on debt originating in the finance sector (eg. credit cards and unsecured loans) because these are sizeable loans and have the longest tail on collections. The average loan per customer is c.£2,500 but the technology it has developed is just as applicable to other forms of (smaller) unsecured consumer debt such as mobile phone bills, store cards, council tax, home shopping catalogues and utility bills and it has been expanding into these areas too. Since 2009, Arrow has also expanded its portfolio purchasing activities to Portugal, becoming one of the first foreign debt purchasers and Portugal represents around 10% of its business. Pricing discipline Some subscribers will be wondering exactly what Arrow does when it buys a package of debt? At the heart of the group's operations is its core data analytics systems and customer databases, which enable it to help track down individuals. Quite often Arrow finds that the debt may have originated whilst the consumer was a student, was moving address or perhaps going through a messy divorce. Sometimes it is simply a lender's antiquated data system that means address changes aren't noted. There is no method of tracing consumers (such as a national identification system) that is accessible by creditors and Arrow therefore has to rely on its own data sources in order to locate consumers. It has developed Uniview, to amalgamate names, ages, county court judgement information, land registry data and the electoral roll for the defaulting consumer in order to build a consolidated profile of each customer's circumstances. Once this type of matching has been carried out, Arrow begins the process of contacting the consumer. Yes, it can be a bit of a long shot as sometimes it may have only matched the same initial and last name - and in this case it will chance its arm. In the first instance, it may write to them to get in touch "regarding a personal matter" and give an 0845 number to ring. Chaser letters and calls will be made and Arrow will attempt to formulate an affordable and sustainable repayment solution. Customers will often pay up in order to improve their credit scores and enhance their ability to gain access to credit in the future, all of which creates strong incentives for customers to continue paying once a repayment plan has been formulated For customers who fall into line, this then gives rise to small annuity like payments until their loan is paid off. At the present time Arrow has some 3.4m customers spread across approximately 5m individual purchased accounts. For those who decide not to pay, Arrow has the option of taking them to the county court (before it becomes statute barred). Trick is understanding the debt before buying The face value of the debt that Arrow owns is £8 billion, having spent £84m in acquiring new portfolios in 2012. This year it will probably spend £100m. Typically Arrow will analyse 100 portfolios in any year but only complete on 20-25. As we are learning the trick is in understanding the debt you are buying and not paying too much. The price Arrow will pay depends on the various states of delinquency in the portfolio; some individuals may have made at least one payment in the past three months which make for high collection rates, whilst others who might have made no payments are higher risk and give rise to less predictable cash flows. Arrow will also pay less if the data is aged or if debt collection agencies have already made several unsuccessful attempts to recover the money. Drury says Arrow typically pays 3p for every £1 of debt if they are mostly non paying defaulters but if there are more paying customers it goes as high as 15p-20p in the £1. The average it has paid to date is 5p but the market has hardened and Drury would expect to pay an average 9p in the £1. Arrow can then reasonably expect to recover 20 - 25p in the £1 on that. 'Trace' activity to locate customers A significant innovation in deciding which ones Arrow should buy and what to pay arises from Arrow's association with Experian to develop the Proprietary Collections Bureau (PCB), which holds data for 13.4m defaulting customers. PCB is a data sharing closed-user group maintained and run by Experian with 24 contributors. It helps Arrow to estimate almost to a penny the costs of extracting repayments and this means it is better informed as to what it should pay for a block of debt. Rivals Cabot and Lowell have their own sophisticated data assets but nothing quite as good. Last year, Arrow was able to identify, prior to purchase, over 30% of all accounts in the portfolios it evaluated. Post purchase, PCB also helps Arrow to prioritise cash collections from matched customers - and if they owe money to several lenders it uses the same debt collection firm (reducing its commissions in this way and speeding up collections). The revenue recognition is, however, complicated and beyond the scope of this article. The nub of it is that when Arrow takes on a portfolio of debt, it makes an estimate of how profitable the collection will be over seven years (it expects a 23% return in its NPV calculations). If Arrow achieves faster than anticipated collections, this results in a big "beat" to profit forecasts plus revaluation gains on its portfolio. The reverse is also true so when recoveries are slower it leads to shortfalls and valuation impairments on portfolio purchases. Impressively, Arrow has an established record of underwriting accuracy, having been collecting 103% of its original underwriting cash targets since 2009. The reason it can be so accurate boils down to its data assets which are growing and enabling it identify and locate a high number of accounts prior to underwriting. Collections are already showing signs of accelerating because banks are selling "fresher" data (i.e. the time elapsed since it defaulted is short) and the better economy also is helping with higher collections. As a result Arrow is more profitable than ever before with operating margins of 47.6%. In the year to 31 December 2012, Arrow doubled its pretax profit to £12.1m and it has already recorded a profit of £11.2m in the first six months of this year. We have yet to see forecasts as the company is fresh to market but the indication is the shares are on a prospective PE of 12x or even less, for the year about to start. A Strong Buy.
Arrow Global share price data is direct from the London Stock Exchange
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