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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Arrow Global Group Plc | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 307.00 | 307.00 | 307.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMARW
RNS Number : 4417Y
Arrow Global Group PLC
09 May 2019
9 May 2019
Arrow Global Group PLC
Results for the three months ended 31 March 2019
Strong cashflow generation, deleveraging and further funding diversification from first securitisation
Arrow Global Group PLC (the "Company", and together with its subsidiaries the "Group"), a leading European investor and asset manager in secured and unsecured defaulted and non-core loan portfolios and real estate, announces its results for the three months ended 31 March 2019.
Key Highlights
Hot Features
Premium
-- Organic portfolio purchases of GBP56.4 million (Q1 2018: GBP79.9 million)
-- Core collections increased 22.7% to GBP105.5 million (Q1 2018: GBP86.0 million)
-- Third-party AMS income increased 21.7% to GBP23.0m (Q1 2018: 18.9 million)
-- Free cashflow grew 32.0% to GBP57.8 million (Q1 2018: GBP43.8 million)
-- Significant reduction in leverage ratio to 3.4x (Q1 2018: 4.0x)
-- Underlying profit before tax increased 14.1% to GBP16.2 million (Q1 2018: GBP14.2 million)
-- Underlying LTM ROE of 34.5%
-- Securitisation in April 2019 further diversifies funding structure
Financial highlights 31 March 31 March Change
2019 2018 %
--------------------------------- --------- --------- -------
Core collections (GBPm) 105.5 86.0 22.7
Total income (GBPm) 86.6 77.1 12.3
Third party AMS income (GBPm) 23.0 18.9 21.7
Profit/(loss) before tax (GBPm) 15.8 (7.6) -
Underlying profit before tax
(GBPm) 16.2 14.2 14.1
Basic EPS (p) 6.1 (3.5) -
Leverage (x) 3.4 4.0 (0.6)
84-month ERC (GBPm) 1,602.8 1,562.2 2.6
120-month ERC (GBPm) 1,935.4 1,852.4 4.5
Commenting on today's results, Lee Rochford, Group chief executive officer of Arrow Global, said:
"Our strong focus on returns and an improving pricing environment means that we took the decision in the first quarter to purchase fewer portfolios, conserving investment firepower for later in the year. Our strong pipeline visibility means that we remain confident in achieving around GBP250.0 million of portfolio purchases at our target returns.
Arrow Global is a highly cash generative business and this is evident when purchases are scaled back, driving the three-point reduction in leverage from 3.7x at the full year to 3.4x at the end of Q1. While leverage is likely to modestly rise from here as purchases increase, before trending down again by year end, we remain confident that our target leverage range of 3.0x-3.5x is a sustainable level for the business.
The announcement today of our first securitisation of loan portfolios via a GBP100 million revolving commitment adds an important element of diversification to our funding structure at attractive cost and modest scale.
We are pleased with the investment returns we have achieved so far in Q1 and believe that the pricing environment will continue to improve. Cash generation will continue to be a major priority through a heavy focus on delivering strong returns and our cost efficiency agenda."
Conference call details
There will be a conference call for analysts and investors at 0900 (UK time). Investors and analysts wishing to dial-in to the call can register using the following link:
http://bit.ly/2IZomJo
Notes:
A glossary of terms can be found on pages 14 to 16.
More details explaining the business can be found in the Annual Report & Accounts 2018 which is available on the Company's website at www.arrowglobalir.net
For further information:
Arrow Global Group PLC Duncan Browne, Head of Investor Relations +44 (0)161 242 5896 FTI Consulting Neil Doyle +44 (0)20 3727 1141 / arrowglobal@fticonsulting.com Tom Blackwell Laura Ewart
Forward looking statements
This document contains statements that constitute forward-looking statements relating to the business, financial performance and results of the Group and the industry in which the Group operates. These statements may be identified by words such as "expectation", "belief", "estimate", "plan", "target", or "forecast" and similar expressions or the negative thereof; or by forward-looking nature of discussions of strategy, plans or intentions; or by their context. All statements regarding the future are subject to inherent risks and uncertainties and various factors could cause actual future results, performance or events to differ materially from those described or implied in these statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. Further, certain forward-looking statements are based upon assumptions of future events which may not prove to be accurate and neither the Company nor any other person accepts any responsibility for the accuracy of the opinions expressed in this document or the underlying assumptions. The forward-looking statements in this document speak only as at the date of this presentation and the Company assumes no obligation to update or provide any additional information in relation to such forward-looking statements.
Unaudited consolidated statement of profit or loss and other comprehensive income
For the three months ended 31 March 2019
Unaudited Unaudited
three months three months
ended ended
31 March 2019 31 March 2018
GBP000 GBP000
Continuing operations
Income from portfolio investments at amortised cost 44,760 45,172
Fair value gain on portfolio investments at FVTPL 6,647 4,816
Impairment gains on portfolio investments at amortised cost 12,172 8,301
--------------- ---------------
Total income from portfolio investments 63,579 58,289
Income from asset management and servicing 22,952 18,855
Other income 98 -
--------------- ---------------
Total income 86,629 77,144
--------------- ---------------
Operating expenses:
Collection activity costs (26,790) (27,808)
Other operating expenses (31,515) (27,397)
--------------- ---------------
Total operating expenses (58,305) (55,205)
--------------- ---------------
Operating profit 28,324 21,939
Net finance costs (12,571) (10,923)
Refinancing costs - (18,610)
Profit/(loss) before tax 15,753 (7,594)
Taxation (charge)/credit (4,360) 1,561
--------------- ---------------
Profit/(loss) after tax 11,393 (6,033)
=============== ===============
Other comprehensive income:
Items that are to be reclassified subsequently to profit or loss:
Foreign exchange translation difference arising on revaluation of foreign
operations (4,688) (1,033)
Movement on the hedging reserve (54) (298)
--------------- ---------------
Total comprehensive income for the period 6,651 (7,364)
=============== ===============
Profit attributable to:
Owners of the Company 10,673 (6,051)
Non-controlling interest 720 18
--------------- ---------------
11,393 (6,033)
=============== ===============
Basic EPS (p) 6.1 (3.5)
=============== ===============
UNDERLYING PROFIT
Underlying profit is considered to be a key measure in understanding the Group's ongoing financial performance. Adjusting items are those items that management deem by virtue of their size, nature or incidence (i.e. outside the normal operating activities of the Group) are not considered to be representative of the ongoing performance of the Group and these items are excluded from underlying profit.
Unaudited Unaudited
three months ended three months ended
31 March 2019 31 March 2018
GBP000 GBP000
Continuing operations
Total income 86,629 77,144
-------------------- --------------------
Operating expenses
Collection activity costs (26,790) (27,251)
Other operating expenses (31,064) (24,741)
-------------------- --------------------
Total operating expenses (57,854) (51,992)
-------------------- --------------------
Operating profit 28,775 25,152
Net finance costs (12,571) (10,923)
Underlying profit before tax 16,204 14,229
Taxation charge (4,445) (2,814)
-------------------- --------------------
Underlying profit after tax before non-controlling interest 11,759 11,415
Non-controlling interest (720) (18)
-------------------- --------------------
Underlying profit after tax 11,039 11,397
Underlying basic EPS (p) 6.3 6.5
==================== ====================
Reconciliation between reported profit/(loss) and underlying profit
31 Mar 2019 31 Mar 2019 31 Mar 2019 31 Mar 2018 31 Mar 2018 31 Mar 2018
Profit Profit Profit Profit
before tax Tax after tax before tax Tax after tax
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Reported profit/(loss) 15,753 (4,360) 11,393 (7,594) 1,561 (6,033)
Adjustments:
Collection activity costs - - - 557 (139) 418
Other operating expenses 451 (85) 366 2,656 (607) 2,049
Bond refinancing costs - - - 18,610 (3,629) 14,981
------------ ------------ ------------ ------------ ------------ ------------
Total adjustments 451 (85) 366 21,823 (4,375) 17,448
Underlying profit 16,204 (4,445) 11,759 14,229 (2,814) 11,415
Non-controlling interest (1,075) 355 (720) (18) - (18)
Underlying profit attributable
to owners 15,129 (4,090) 11,039 14,211 (2,814) 11,397
============ ============ ============ ============ ============ ============
In the period to 31 March 2019, the other operating expenses adjustment primarily related to acquisition costs. In the period to 31 March 2018, the collection activity adjustment related to the One Arrow programme and the other operating expenses adjustment related to the One Arrow programme and costs incurred on acquisitions. See note 3 for details of the bond refinancing costs.
The non-controlling interest (NCI) relates to a co-investment in a portfolio where we have taken a majority share and hence consolidate the position and allocate the minority holding to the NCI.
Unaudited consolidated statement of financial position
As at 31 March 2019
31 March 31 December 31 March
2019 2018 2018
Notes GBP000 GBP000 GBP000
Assets
Goodwill and intangible assets 294,601 306,943 214,743
Property, plant and equipment 30,538 7,761 9,885
Cash and cash equivalents 58,428 92,001 42,400
Other receivables 63,372 94,206 61,877
Portfolio investments 2 1,061,236 1,087,030 984,620
Deferred tax asset 8,055 8,113 7,899
Total assets 1,516,230 1,596,054 1,321,424
========== ============ ==========
Equity
Share capital 1,763 1,763 1,753
Other equity reserves 195,684 189,894 171,056
Total equity attributable to shareholders 197,447 191,657 172,809
---------- ------------ ----------
Non-controlling interest 1,321 601 191
---------- ------------ ----------
Total equity 198,768 192,258 173,000
---------- ------------ ----------
Liabilities
Trade and other payables 170,474 197,657 149,863
Net current and deferred tax liability 24,057 22,845 17,291
Derivative liability 729 502 3,210
Borrowings 3 1,122,202 1,182,792 978,060
Total liabilities 1,317,462 1,403,796 1,148,424
---------- ------------ ----------
Total equity and liabilities 1,516,230 1,596,054 1,321,424
========== ============ ==========
Unaudited consolidated statement of changes in equity
For the three months ended 31 March 2019
Ordinary
shares Other equity reserves Total Non-controlling interest Total
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January 2018 1,753 193,395 195,148 173 195,321
Impact of adopting IFRS 9 - (14,000) (14,000) - (14,000)
--------- ---------------------- --------- ------------------------- ---------
Balance post-IFRS adjustments at
1 January 2018 1,753 179,395 181,148 173 181,321
Loss for the period - (6,051) (6,051) 18 (6,033)
Exchange differences - (1,033) (1,033) - (1,033)
Net fair value losses - cash flow
hedges - (378) (378) - (378)
Tax on hedged items - 80 80 - 80
--------- ---------------------- --------- ------------------------- ---------
Total comprehensive income for
the period - (7,382) (7,382) 18 (7,364)
Repurchase of own shares - (1,750) (1,750) - (1,750)
Share-based payments - 793 793 - 793
Balance at 31 March 2018 1,753 171,056 172,809 191 173,000
Profit for the period - 36,020 36,020 (18) 36,002
Exchange differences - 3,605 3,605 - 3,605
Recycled to profit after tax - (1,202) (1,202) - (1,202)
Net fair value gains - cash flow
hedges - 87 87 - 87
Tax on hedged items - (30) (30) - (30)
Total comprehensive income for
the period - 38,480 38,480 (18) 38,462
Impact of adopting IFRS 15 - (199) (199) - (199)
Shares issued 10 - 10 - 10
Repurchase of own shares - (759) (759) - (759)
Share-based payments - 2,474 2,474 - 2,474
Dividends paid - (21,158) (21,158) - (21,158)
Dividends paid by NCI - - - (43) (43)
Non-controlling interest on
acquisition - - - 471 471
Balance at 31 December 2018 1,763 189,894 191,657 601 192,258
Impact of adopting IFRS 16 - (941) (941) - (941)
--------- ---------------------- --------- ------------------------- ---------
Balance post IFRS adjustments at
1 January 2019 1,763 188,953 190,716 601 191,317
Profit for the period - 10,673 10,673 720 11,393
Exchange differences - (4,688) (4,688) - (4,688)
Net fair value gains - cash flow
hedges - (65) (65) - (65)
Tax on hedged items - 11 11 - 11
--------- ---------------------- --------- ------------------------- ---------
Total comprehensive income for
the period - 5,931 5,931 720 6,651
Share-based payments - 800 800 - 800
Balance at 31 March 2019 1,763 195,684 197,447 1,321 198,768
--------- --------- ------------------------- ---------
Unaudited consolidated statement of cash flows
For the three months ended 31 March 2019
Three months ended Three months ended
31 March 31 March
2019 2018
GBP000 GBP000
Net cash flows from operating activities before purchases of portfolio
investments 64,961 84,450
Purchase of portfolio investments (56,377) (80,971)
Net cash generated by operating activities 8,584 3,479
Net cash used in investing activities (7,752) (15,466)
Net cash flows (used in)/ generated by financing activities (32,546) 18,739
------------------- -------------------
Net (decrease)/ increase in cash and cash equivalents (31,714) 6,752
Cash and cash equivalents at beginning of period 92,001 35,943
Effect of exchange rates on cash and cash equivalents (1,859) (295)
------------------- -------------------
Cash and cash equivalents at end of period 58,428 42,400
------------------- -------------------
Notes
1. Significant accounting policy updates
These financial statements are unaudited and do not include all of the information required for full annual or interim financial statements and therefore are not fully compliant with IAS 34 - Interim financial reporting. These quarterly results should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2018.
The annual financial statements of the Group are prepared in accordance with IFRS as adopted for use in the EU, and therefore comply with Article 4 of the EU IFRS Regulation. As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, these financial statements have been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated annual report for the year ended 31 December 2018, other than IFRS 16, which has been applied for the first time this year. Changes to significant accounting policies in 2019 have been disclosed below.
The consolidated financial statements of the Group for the year ended 31 December 2018 are available upon request from the Company's registered office at Belvedere, 12 Booth Street, Manchester, M2 4AW and can also be found online at www.arrowglobalir.net.
IFRS 16 is effective from 1 January 2019 and the Group has adopted it from this date.
IFRS 16 replaces the previous standard IAS 17 'Leases', bringing a number of leases on balance sheet, which were previously off balance sheet and accounted for as operating leases under IAS 17.
The Group is not required to restate comparatives on the initial adoption of IFRS 16, and has applied the modified retrospective approach. The Group has applied exemptions where appropriate for short-term leases of twelve months or less and low value assets to be expensed and has also applied 'grandfathering' to all IAS 17 judgements previously made. The incremental borrowing rates used to measure lease liabilities at initial application ranged between 4.2% and 7.2%.
The standard transition has led to a one-off opening 2019 reserves reduction of GBP0.9 million, a right-of-use asset disclosed in property, plant equipment of GBP23.8 million and a lease liability of GBP27.3 million and a release of lease accruals of GBP2.6 million, both disclosed in trade and other payables.
2. Portfolio investments
The movements in portfolio investments were as follows:
Three months ended Year ended Three months ended
31 March 31 December 31 March
2019 2018 2018
GBP000 GBP000 GBP000
As at the period brought forward 1,087,030 951,467 951,467
Impact of adopting IFRS 9 at 1 January 2018 - (17,000) (17,000)
------------------- ------------- -------------------
Brought forward after impact of IFRS 9 opening
adjustment 1,087,030 934,467 934,467
Portfolio purchases during the year 56,377 263,350 80,971
Portfolio additions from acquired entities - 11,853 -
Collections in the period (105,493) (411,588) (85,993)
Total income from portfolio investments 63,579 269,404 58,289
Exchange and other movements (27,096) 19,544 (3,114)
Portfolio restructure (13,161) - -
As at the period end 1,061,236 1,087,030 984,620
=================== ============= ===================
Classification of portfolio investments
The following table provides a breakdown of the categories of portfolio investments under IFRS 9.
31 March
Amortised cost FVTPL 2019
GBP000 GBP000 GBP000
As at the period end 862,184 199,052 1,061,236
--------------- -------- ==========
3. Borrowings
31 March 31 December 31 March
2019 2018 2018
GBP000 GBP000 GBP000
Senior secured notes 895,258 920,798 906,043
Senior secured notes interest 1,434 5,542 1,085
Revolving credit facility 221,262 242,121 50,446
Bank overdrafts 4,248 2,696 1,319
Finance lease - - 1,771
Other borrowings - 11,635 17,396
---------- ------------ ---------
Total borrowings 1,122,202 1,182,792 978,060
========== ============ =========
Revolving credit facility
On 26 February 2019, the maturity of the facility was extended to 4 January 2024 with no change in margin.
On 4 January 2018, the commitment under the revolving credit facility were increased from GBP215 million to GBP255 million. The maturity of the facility was extended to 2 January 2023 and the margin reduced to 2.5%.
On 1 November 2018, the commitment under the revolving credit facility were increased from GBP255 million to GBP285 million.
Senior secured notes
On 7 March 2018, Arrow Global Finance Plc issued EUR285 million floating rate senior secured notes due 2026 at a coupon of 3.75% over three-month EURIBOR and also issued a GBP100 million tap of its existing GBP220 million 5.125% fixed rate notes due 2024. As part of the transaction, Arrow Global Finance Plc also redeemed its EUR230 million 4.75% over three-month EURIBOR floating rate senior secured notes.
In 2018, bond refinancing costs comprised GBP18.6 million incurred on the early redemption of the EUR230 million notes due 2023, of which GBP13.6 million was a cash cost related to the call premium. The remaining GBP5.0 million was due to a non-cash write-off of related transaction fees, relating to the 2023 notes.
4. Post balance sheet events
Drydens Limited ("Drydens")
On 8 April 2019, the Group acquired 100% of the share capital of Drydens. Drydens is a provider of legal services, the acquisition of which will broaden the Group's UK range of servicing capabilities and skills across consumer and commercial litigation, probate and insolvency.
Asset backed security
On 30 April 2019, the Group completed a securitisation of loan portfolios at a GBP100 million revolving commitment, through an asset backed security funding structure at LIBOR + 3.1% per annum.
Additional Information
The adjusted EBITDA reconciliations for the periods ended 31 March 2019 and 31 March 2018 are shown below:
Three months ended Three months ended
31 March 31 March
2019 2018
GBP000 GBP000
Reconciliation of net cash flow to adjusted EBITDA
Net cash generated by operating activities 8,584 3,479
Purchase of portfolio investments 56,377 80,971
Income taxes paid 2,625 4,550
Working capital adjustments 8,853 (35,369)
Amortisation of acquisition fees 43 69
Adjusting operating expenses 451 3,213
Adjusted EBITDA 76,933 56,913
------------------- -------------------
Reconciliation of core collections to EBITDA GBP000 GBP000
Income from portfolio investments including revaluations 63,579 58,289
Portfolio amortisation 41,914 27,704
Core collections (includes proceeds from disposal of portfolio
investments) 105,493 85,993
Income from asset management and servicing 22,952 18,855
Other income 98 -
Operating expenses (58,305) (55,205)
Depreciation and amortisation 4,728 3,163
Foreign exchange losses 673 31
Amortisation of acquisition fees 43 69
Share-based payments 800 794
Adjusting operating expenses 451 3,213
Adjusted EBITDA 76,933 56,913
------------------- -------------------
Reconciliation of operating profit to EBITDA GBP000 GBP000
Profit/(loss) after tax 11,393 (6,033)
Underlying net finance costs 12,571 10,923
Taxation charge/(credit) on ordinary activities 4,360 (1,561)
Adjusting financing costs - 18,610
------------------- -------------------
Operating profit 28,324 21,939
Portfolio amortisation 41,914 27,704
Depreciation and amortisation 4,728 3,163
Foreign exchange losses 673 31
Amortisation of acquisition fees 43 69
Share-based payments 800 794
Adjusting operating expenses 451 3,213
Adjusted EBITDA 76,933 56,913
------------------- -------------------
The table below reconciles the reported profit for the period to the free cash flow result. For completeness we also separate out other adjusting items.
Reconciliation of profit after tax to the free cash flow result
Reported profit Adjusting items Underlying Other items Free cash flow
Income (4) profit
GBP000 GBP000 GBP000 GBP000 GBP000
Income from
portfolio Collections in
investments 44,760 - 44,760 60,733 105,493 the period
Fair value
gains
portfolio
investments at
FVTPL 6,647 - 6,647 (6,647) -
Impairment
gains on
portfolio
investments at
amortised cost 12,172 - 12,172 (12,172) -
Income from 22,952 - 22,952 - 22,952 Income from
asset asset
management and management and
servicing servicing
Other income 98 - 98 - 98
---------------- ---------------- ---------------- ------------ --------------- ---------------
Total income
(1) 86,629 - 86,629 41,914 128,543 Cash income
Total operating Cash operating
expenses (58,305) 451 (57,854) 6,244(2) (51,610) expenses
---------------- ---------------- ---------------- ------------ --------------- ---------------
Operating Adjusted
profit 28,324 451 28,775 48,158 76,933(5) EBITDA
Net financing
costs (12,571) - (12,571) (2,158)(3) (14,729)
Profit before
tax 15,753 451 16,204 46,000 62,204
Taxation charge
on ordinary
activities (4,360) (85) (4,445) 1,820 (2,625)
---------------- ---------------- ---------------- ------------ --------------- ---------------
Profit after
tax 11,393 366 11,759 47,820 59,579
================ ================ ================ ============ =============== ===============
(1,743) Capital
expenditure
57,836 Free cash flow
=============== ===============
(1) Total income is largely derived from income from portfolio investments plus income from asset management and servicing being commission on collections for third parties and fee income received. The other items add back loan portfolio amortisation to get to core collections. Amortisation reflects a reduction in the statement of financial position carrying value of the portfolio investments arising from collections which are not allocated to income. Amortisation plus income from portfolio investments equates to core collections
(2) Includes non-cash items including depreciation and amortisation, share-based payment charges and FX
(3) Non-cash amortisation of fees and interest
(4) The free cash flow result is viewed on an underlying basis which excludes certain items. These items have been excluded to provide a more comparable basis for assessing the Group's performance between financial periods
(5) This is the adjusted EBITDA for the business, which is a key driver to the cash result. This measure allows us to monitor the operating performance of the Group. See page 12 for detailed reconciliations of adjusted EBITDA
Glossary
'Adjusted EBITDA' means profit for the period attributable to equity shareholders before interest, tax, depreciation, amortisation, foreign exchange gains or losses and adjusting items.
'Adjusting items' are those items that by virtue of their size, nature or incidence (i.e. outside the normal operating activities of the Group) are not considered by the board to be representative of the ongoing performance of the Group and are therefore excluded from underlying profit after tax.
'AMS' means asset management and servicing.
'Cash income' represents core collections and income from asset management and servicing.
'Collection activity costs' represents the direct costs of collections related to the Group's portfolio investments, such as internal staff costs, commissions paid to third party outsourced providers, credit bureaux data costs and legal costs associated with collections.
'Core collections' or 'core cash collections' mean cash collections on the Group's existing portfolios including ordinary course portfolio sales and put backs.
'EPS' means earnings per share.
'84-month ERC' and '120-month ERC' (together 'gross ERC'), mean the Group's estimated remaining collections on portfolio investments over an 84-month or 120-month period, respectively, representing the expected future core collections on portfolio investments over an 84-month or 120-month period (calculated at the end of each month, based on the Group's proprietary ERC forecasting model, as amended from time to time).
'Free cash flow' means Adjusted EBITDA after the effects of capital expenditure, financing and tax cash impacts and before the replacement rate.
'FVTPL' - Financial instruments at fair value with all gains or losses being recognised in the profit or loss.
'Grandfathering' allows the application of IFRS 16 only to those contracts in which a lease was previously identified in accordance with IAS 17.
'Gross AMS income' includes commission income, debt collection, due diligence, real estate management, advisory fees and intra-group income for these services.
31 March
2019
GBP000
Third party AMS income 22,952
Intra-Group AMS income 9,172
---------
Gross AMS income 32,124
=========
'Gross income' includes commission income, debt collection, due diligence, real estate management, advisory fees and intra-group income for Asset Management and Servicing, total income for the Investment Business and other income.
31 March
2019
GBP000
Third party AMS income 22,952
Intra-Group AMS income 9,172
---------
Gross AMS income 32,124
Investment Business income 63,579
Other income 98
---------
Gross income 95,801
=========
'IFRS' means EU adopted international financial reporting standards.
'Incremental borrowing rate' is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right--of--use asset in a similar economic environment.
'Leverage' is secured net debt to LTM Adjusted EBITDA.
'LTM' means last twelve months and is calculated by the addition of the consolidated financial data for the year ended 31 December 2018 and the consolidated financial data for the three months to 31 March 2019 and the subtraction of the consolidated financial data for the three months to 31 March 2018.
'Net debt' means the sum of the outstanding principal amount of the senior secured notes, interest thereon, amounts outstanding under the revolving credit facility and deferred consideration payable in relation to the acquisition of portfolio investments, less cash and cash equivalents. Net debt is presented because it indicates the level of debt after removing the Group's assets that can be used to pay down outstanding borrowings and because it is a component of the maintenance covenants in the revolving credit facility. The breakdown of net debt is as follows:
31 March 31 December
2019 2018
GBP000 GBP000
Cash and cash equivalents (58,428) (92,001)
Senior secured notes (pre transaction fees net off) 909,645 935,567
Revolving credit facility (pre transaction fees net off) 225,244 245,587
---------- ------------
Secured net debt 1,076,461 1,089,153
Deferred consideration - acquisitions 52,116 59,922
Deferred consideration - portfolios 15,067 12,031
Senior secured notes interest 1,434 5,542
Bank overdrafts 4,248 2,696
Other borrowings - 11,635
---------- ------------
Net debt 1,149,326 1,180,979
========== ============
'NCI' means non-controlling interest.
'Non-controlling interest', also known as minority interest, is the portion of equity ownership in a subsidiary which is not attributable to the parent company, who has a controlling interest of greater than 50% but less than 100%, and consolidates the subsidiary's results with its own.
'ROE' means the return on equity as calculated by taking profit after tax divided by the average equity attributable to shareholders. Average equity attributable is calculated as the average quarterly equity from Q1 2018 to Q1 2019 as shown in the quarterly, half year and full year statements. In the comparative period this is calculated as the average annual equity attributable.
'Secured net debt' means the sum of the outstanding principal amount of the senior secured notes, amounts outstanding under the revolving credit facility, less cash and cash equivalents. Secured net debt is presented because it indicates the level of secured debt after taking out the Group's assets that can be used to pay down outstanding secured borrowings, and because it is a component of the incurrence tests in the senior secured notes. The breakdown of secured net debt is shown in net debt above.
'Underlying basic EPS' represents earnings per share based on underlying profit after tax, excluding any dilution of shares.
'Underlying profit after tax' means profit for the year attributable to equity shareholders adjusted for the post-tax effect of certain adjusting items. The Group presents underlying profit after tax because it excludes the effect of items (and the related tax on such items) which are are not considered representative of the Group's ongoing performance, on the Group's profit or loss and forms the basis of its dividend policy.
'Underlying ROE' represents the ratio of underlying profit for the period attributable to equity shareholders to average shareholder equity.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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May 09, 2019 02:00 ET (06:00 GMT)
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