Interim report January – March 2015
January – March (compared with the first quarter 2014)
• Gross cash collections increased by 48 per cent to SEK 791m (SEK 536m).
• Total revenue increased by 40 per cent to SEK 499m (SEK 358m).
• EBIT totalled SEK 161m (SEK 121m) adjusted for costs in connection to the listing. EBIT totalled SEK 115m.
• EBIT margin was 32 per cent (34 per cent), adjusted for costs in connection to the listing.
• Profit before tax amounted to SEK 52m (SEK 50m), adjusted for costs in connection to the listing.
• Portfolio acquisitions totalled SEK 273m (SEK 434m).
• Basic earnings per share amounted to SEK 0.01 (SEK 0.71).1)
Diluted earnings per share amounted to SEK 0.01 (SEK 0.62).1)
• Financial net amounted to SEK –108m (SEK –71m). It includes SEK –20m (SEK 3m), changes in market valuation of currency and interest hedges.
31 March (compared with 31 March 2014)
• Carrying value of acquired loans2) increased by 34 per cent to SEK 8,827m (SEK 6,579m).
• Gross 120m ERC (Estimated Remaining Collection) increased by 39 per cent to SEK 15,238m (SEK 10,958m).
• The Company’s share is, as from 25 March 2015 listed on Nasdaq Stockholm, Mid Cap.
• Total capital ratio increased to 17.13 per cent (9.18 per cent).
• CET 1 ratio (Common Equity Tier 1 Capital) totalled 14.33 per cent (5.68 per cent).
Statement by the CEO
Stable earnings geared for growth
On 25 March we reached an important milestone as Hoist Finance was successfully listed (introduced) on the Nasdaq Stockholm´s Mid Cap list. We are very pleased with the broad interest from both Swedish and international investors. With a wider range of shareholders and a substantially improved capital adequacy we are better geared than ever for continued growth.
The beginning of the year has been stable and well in line with our expectations. EBIT, adjusted by the cost of the IPO, improved by 32 per cent compared to the first quarter last year and by 7 per cent compared with the fourth quarter. The EBIT margin improved by 1 per cent compared with the previous quarter and amounted to 32 per cent.
Positive development in our newly acquired platforms
The Italian platform TRC that we acquired last year has shown good growth. The company, with its two call centres, is now well integrated within Hoist Finance with a partly new organisation in Italy. Gross cash collections have improved during the period as a result of the large portfolio that we acquired in December and both profitability and EBIT margins have improved since we bought TRC during the third quarter 2014.
The integration of Navi Lex in Poland into our infrastructure has also been successful. Since the acquisition in the fourth quarter, we have transferred a large number of portfolios that were previously managed by external debt collecting agents into our own organisation.
A growing market
The European debt purchasing market for non-performing unsecured consumer loans has rapidly developed as a legacy of the financial crisis in 2008 and is now an established component of the credit industry. This growing market stems primarily from new banking regulations with the aim of improving the capital base of banks. We therefore expect a continuous high level of debt sales in the years to come as the Basel III framework is implemented.
Well positioned for long term profitable growth
Hoist Finance’s strategy for profitable growth is unchanged. With over 20 years of experience, a wide geographical presence and a proven well-structured model for acquisition we are today a leading debt restructuring partner to international banks. Our proven model for amicable settlements is built on long-term sustainable and affordable instalment plans made in close dialogue with customers. Our reputation of ethical and amicable treatment of customers is also a key attribute for our cooperation with our bank debt originators.
As always, we focus on deepening our relationship with our partners in existing markets. At the same time we strive to establish new relationships and to continue to evaluate and review new market entries in Europe. Hoist Finance has a solid financial position and we are well placed to capture the growth opportunities in the market both in the near future and in the years to come.
The market activity for portfolio acquisitions is generally calm in the first quarter. However, we could already in March see a substantial increase in activity. This positive trend has continued in April. Based on the number of negotiations that we have on-going we have a positive view on development throughout the year. Going forward our target remains unchanged with an expected portfolio acquisition volume in line with, or higher than previous years.
Hoist Finance AB (publ)
Presentation of the Interim report
The interim report and investor presentation are available on www.hoistfinance.com. The report is commented by the CFO Pontus Sardal on 6 May 2015 at 9.30 A.M. (CET). The presentation can be viewed live on www.hoistfinance.com or on www.financialhearings.com.
To participate, please dial
+46 8 566 426 61 (SE),
+44 203 428 14 10 (UK) or
+1 855 753 22 36 (US).
The information in this interim report has been published pursuant to the Swedish Securities Market Act (Sw. lag om värdepappersmarknaden) and/or Swedish Financial Instruments Trading Act (Sw. lagen om handel med finansiella instrument). This information was released for publication on 6 May 2015 at 8.00 A.M. (CET).
Hoist Finance AB (publ) (the “Company” or the “Parent”) is the parent company of the Hoist Finance group of companies (“Hoist Finance”). The Company’s wholly owned subsidiary, Hoist Kredit AB (publ) (“Hoist Kredit”) is a regulated credit market company (Sw. kreditmarknadsbolag). Hence, Hoist Finance produces financial statements in accordance with the guidance and format set forth in the Swedish Annual Accounts Act for Credit Institutions and Securities Companies (Sw. lagen om årsredovisning i kreditinstitut och värdepappersbolag). In order to assess the operational performance of the debt purchasing and collection operations and to facilitate comparison with our competitors, Hoist Finance supplements the statutory financial statements by producing an operating income statement. The operating income statement contains no adjustments or amendments compared to, and has been prepared on the basis of, the same accounting and valuation principles as the statutory financial statements.
Anne Rhenman Eklund, Group Head of Communications and IR, Hoist Finance
Phone: +46 (0)8 55 51 77 90