Cabot reveals latest acquisition as pre-tax profit hits £12m
Cabot Credit Management has acquired another collection agency, according to a results update that shows a £12m pre-tax profit in Q1.
Cabot’s interim financial statement, released this morning (May 25), reveals the group completed the acquisition of Orbit – a specialist in the UK utilities market – on May 19.
Cabot’s statement shows the group acquired 100 percent of the share capital of Orbit but due to the close proximity of the deal, and the approval of interim financial statements, the accounting for the deal is incomplete.
Elsewhere in the statement, highlights for the first quarter show Cabot invested a gross amount of £57.9m in loan portfolio purchases, compared to £68.3m for the same period last year.
Collections on Cabot’s owned loan portfolios reached £96.6m in the first quarter – an increase of 10 per cent on £87.6m in the same period in 2016. The group’s commission on serviced portfolios was £6.7m – a 22 percent rise on £5.4m a year ago.
Ken Stannard, chief executive of Cabot, said: “This has been another strong and profitable start to the year with our EBITDA increasing 18 percent compared to the same period in 2016, from £56.9m to £67.4m. We have seen our debt purchase collections increase by 10 percent and in March we achieved our highest ever collection result in our UK DP business.
“We have also successfully acquired a UK-based debt contingency business, Orbit, and obtained regulatory approval for our Irish business, Cabot Financial Ireland, on May 5.”
The statement also reflects a marked increase in the amount of paying portfolios being sold in the debt purchase market. In Cabot’s debt purchasing activity in the first quarter of 2017, 77 percent of the portfolios were paying books, compared to 41 percent for the same period in 2016. In contrast, some 23 percent of portfolios Cabot bought in January to March comprised non-performing loans, compared to 59 percent a year ago.
Cabot’s 84-month estimated remaining collections (ERC) at the end of March was £1.7bn – up seven percent year-on-year, while its 120-month figure was £2.1bn – also up seven percent on March 2016.
The number of loan portfolios Cabot owns was 1,450 at March 31, compared to 1,372 a year ago.
The statement also mentions that as part of the integration of Cabot’s DCA subsidiary dlc, the group has consolidated the Apex and dlc operations in dlc’s Brackley office and closed the Apex Stratford office.