Arrow aims to expand international portfolio, bounces back from 2016 Q3 loss
UK-based debt collector Arrow Global grew profits in the nine months leading to 30 September, bouncing back from a one-off loss suffered in its third trading quarter of 2016, despite increased costs associated with the recovery of loans.
Arrow Global Group
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Financial Services
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Arrow, which buys default loans from banks and other creditors, posted £15.2m in profit before tax in its third quarter, marking a significant turnaround from the £6.3m loss it had reported over the same period a year earlier.
Profits for the full nine-month period were up 41% on 2016's figures to £20.1m, but revenues of £231.6m took a massive hit as Arrow saw a 71% increase in "collection activity costs", such as credit bureau data and legal expenses, which jumped from £51.5m to £88.5m.
While Arrow had historically held the majority of its portfolio within the UK, it spent much of the preceding year expanding into Italy, Portugal, the Netherlands and Ireland, with 50% of its newly purchased debt coming outside of Britain.
The company, whose growth strategy depends on governments and regulators leaning on banks to move bad loans off to secondary collections firms, said on Thursday that its future was "attractive" after gaining support from recent European Central Bank guidance on accelerated provisioning.
As of 1100 GMT, shares had dropped 3.64% to 424.00p.