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Arrow Global Grp PLC (ARW)

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Thursday 08 November, 2018

Arrow Global Grp PLC

Results for the 9 months ended 30 September 2018

RNS Number : 7100G
Arrow Global Group PLC
08 November 2018
 

8 November 2018

Arrow Global Group PLC

Results for the nine months ended 30 September 2018

 

Reduced leverage while continuing to grow a diversified platform generating strong cashflows at high returns

 

Arrow Global Group PLC (the "Company", and together with its subsidiaries the "Group"), a leading European investor and asset manager in non-performing and non-core assets, announces its results for the nine months ended 30 September 2018.

 

Key Highlights

 

Ø Strong Group operating and financial performance

·     Core collections increased 18.2%, driving a strong adjusted EBITDA result, up 28.8%

·     Underlying profit after tax increased 10.2% to £42.9 million

·     Profit after tax increased 28.4% to £20.5 million

·     Underlying LTM ROE of 33.4%

·     Improved underwriting performance increased to 104% of original forecast

·     Completion of the Europa Investimenti S.p.A. acquisition marks the successful scaling of our European platform with the primary focus now on organic growth

 

Ø Investment Business

·     Record organic portfolio acquisitions of £200.1 million, increasing from £155.0 million in Q3 2017, and on track to deliver £230 million to £240 million of portfolio purchases

·     Non-UK portfolio investments now represent more than 50% of ERC

 

Ø Asset Management & Servicing business (AMS)

·    Third party AMS income increased 25.1% to £63.3 million

·    Assets under management increased 22.6% to £51.5 billion

·    New target to double AMS income, growing to 50% of total income over the next five years

 

Ø Strong balance sheet discipline

·     Leverage decreased to 3.8 times secured net debt to adjusted EBITDA, with new five year target leverage ratio of 3.0 to 3.5 times

·     Strong cash interest cover at 6.6 times

·     Commitment to prudent balance sheet management maintained

·     Attractive WACD of 3.9% and no bond maturities until 2024; strong liquidity with £128.8 million cash headroom to fund organic growth

 

Underlying financial highlights
 

30 September
2018

30 September
2017

Change
%

Underlying profit after tax (£m)

42.9

38.9

10.2

Underlying LTM return on equity (%)

33.4

33.9

-0.5ppts

Underlying basic earnings per share (EPS) (p)

24.5

22.3

10.2

 

Financial highlights
 

30 September
2018

30 September
2017

Change
%

Assets under management (£bn)

51.5

42.0

22.6

Core collections (£m)

288.5

244.1

18.2

Total income (£m)

255.3

231.6

10.2

Third party AMS income (£m)

63.3

50.6

25.1

Profit after tax (£m)

20.5

16.0

28.4

Basic EPS (p)

11.7

9.2

28.4

84-month ERC (£m)

1,635.6

1,455.6

12.4

120-month ERC (£m)

1,968.9

1,690.1

16.5

 

 

Commenting on today's results, Lee Rochford, Group chief executive officer of Arrow Global, said:

 

"I am delighted that our successful diversification of the business continues to bear fruit. Our Investment Business continues to thrive, with growing volumes and our highly disciplined approach generating resilient cashflows and unlevered returns ahead of our mid-teens target.

 

"Our AMS Business continues to flourish and its strong growth contributes to an improving diversification and quality of earnings.

 

"In combination, our two operating segments are generating a strong increase in earnings and cashflow at very attractive returns and we remain confident in delivering our targets for the year."

 

A Capital Markets day and Q3 presentation for investors and analysts will be held at 0900 at the The Savoy, Strand, London WC2R 0EZ

Webcast Details:

Webcast link: https://fotwlive.videosync.fi/2018-11-08-arrow-cmd-2018

 

Alternatively, if you are in transit and wish to listen to the webcast via an audio bridge, please use the following number:

 

+44 203 695 0088

Meeting ID: 602 149 665

 

International numbers available: https://zoom.us/u/agE9ZkZGm 

 

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 2017 which is available on the Company's website at www.arrowglobalir.net

For further information:

Arrow Global Group PLC

+44 (0)161 242 5896

Lee Rochford

Paul Cooper

Duncan Browne

 

Instinctif Partners

+44 (0)20 7457 2020

Giles Stewart

 

 

 

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 nine months ended 30 September 2018

 

 

Unaudited

nine months ended

30 September 2018

 

Unaudited

nine months ended

30 September 2017

 

Unaudited

three months

ended

30 September 2018

 

Unaudited

three months

ended

30 September 2017

 

£000

 

£000

 

£000

 

£000

Continuing operations

 

 

 

 

 

 

 

149,837

 

131,015

 

53,694

 

45,904

10,609

 

5,298

 

4,501

 

3,139

30,795

 

44,640

 

7,514

 

16,324

Total income from portfolio investments

191,241

 

180,953

 

65,709

 

65,367

63,336

 

50,637

 

21,984

 

16,434

731

 

-

 

731

 

-

Total income

255,308

 

231,590

 

88,424

 

81,801

Operating expenses:

 

 

 

 

 

 

 

(90,331)

 

(88,514)

 

(30,391)

 

(33,409)

(85,668)

 

(63,680)

 

(30,923)

 

(22,756)

Total operating expenses

(175,999)

 

(152,194)

 

(61,314)

 

(56,165)

Operating profit

79,309

 

79,396

 

27,110

 

25,636

(35,101)

 

(33,495)

 

(12,307)

 

(10,935)

(18,658)

 

(27,352)

 

-

 

-

-

 

1,522

 

-

 

450

Profit before tax

25,550

 

20,071

 

14,803

 

15,151

(5,016)

 

(4,073)

 

(2,782)

 

(2,883)

Profit after tax

20,534

 

15,998

 

12,021

 

12,268

Other comprehensive income:

 

 

 

 

 

 

 

Items that are to be reclassified subsequently to profit or loss:

 

 

 

 

 

 

 

Foreign exchange translation difference arising on revaluation of foreign operations

431

 

3,524

 

882

 

352

Movement on the hedging reserve

(279)

 

299

 

96

 

(217)

Total comprehensive income for the period

20,686

 

19,821

 

12,999

 

12,403

 

 

 

 

 

 

 

 

Profit attributable to:

 

 

 

 

 

 

 

Owners of the Company

20,489

 

15,987

 

12,008

 

12,257

Non-controlling interest

45

 

11

 

13

 

11

 

20,534

 

15,998

 

12,021

 

12,268

 

 

 

 

 

 

 

 

Basic EPS (p)

11.7

 

9.2

 

6.8

 

7.0

Diluted EPS (p)

11.5

 

8.9

 

6.8

 

6.9

 

 

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

nine months ended
30 September 2018

 

Unaudited

nine months ended
30 September 2017

 

£000

 

£000

Continuing operations

 

 

 

Total income

255,308

 

231,590

Operating expenses

 

 

 

Collection activity costs

(89,411)

 

(88,104)

Other operating expenses

(77,533)

 

(63,050)

Total operating expenses

(166,944)

 

(151,154)

Operating profit

88,364

 

80,436

Net finance costs

(35,101)

 

(33,495)

Share of profit in associates

-

 

1,522

Underlying profit before tax

53,263

 

48,463

Taxation charge

(10,326)

 

(9,538)

Underlying profit after tax

42,937

 

38,925

Non-controlling interest

(45)

 

(11)

Underlying profit attributable to owners of the company

42,892

 

38,914

 

 

 

 

Underlying basic EPS (p)

24.5

 

22.3

Reconciliation between reported profit and underlying profit

 

30 Sept 2018

30 Sept 2018

30 Sept 2018

 

30 Sept 2017

30 Sept 2017

30 Sept 2017

 

Profit
 before tax

Tax

Profit
 after tax

 

Profit
 before tax

Tax

Profit
 after tax

 

£000

£000

£000

 

£000

£000

£000

Reported profit

25,550

(5,016)

20,534

 

20,071

(4,073)

15,998

Adjustments:

 

 

 

 

 

 

 

Collection activity costs

920

(230)

690

 

410

(79)

331

Other operating expenses

8,135

(1,535)

6,600

 

630

(121)

509

Bond refinancing costs

18,658

(3,545)

15,113

 

27,352

(5,265)

22,087

Total adjustments

27,713

(5,310)

22,403

 

28,392

(5,465)

22,927

Underlying profit

53,263

(10,326)

42,937

 

48,463

(9,538)

38,925

Non-controlling interest

(45)

-

(45)

 

(11)

-

(11)

Underlying profit attributable to owners

53,218

(10,326)

42,892

 

48,452

(9,538)

38,914

The adjustments for collection activity costs and other operating expenses in the period relate to 'One Arrow' costs of £6.0 million and business acquisition and other costs of £3.1 million.

Bond refinancing costs in both periods relate to costs associated with restructuring the Group's long-term financing.

 

Unaudited consolidated statement of financial position

As at 30 September 2018

 

 

30 September

 2018

 

31 December

2017

 

30 September

 2017

 

Notes

£000

 

£000

 

£000

Assets

 

 

 

 

 

 

Intangible assets

 

268,651

 

196,272

 

185,087

Property, plant and equipment

 

6,846

 

10,168

 

6,075

Investments in associates

 

-

 

-

 

9,537

Cash and cash equivalents

 

62,073

 

35,943

 

36,150

Other receivables

 

80,245

 

56,885

 

49,297

Portfolio investments

2

1,051,501

 

951,467

 

909,442

Total assets

 

1,469,316

 

1,250,735

 

1,195,588

Equity

 

 

 

 

 

 

Share capital

 

1,763

 

1,753

 

1,753

Other equity reserves

 

185,524

 

193,395

 

175,230

Total equity attributable to shareholders

 

187,287

 

195,148

 

176,983

Non-controlling interest

 

1,820

 

173

 

138

Total equity

 

189,107

 

195,321

 

177,121

Liabilities

 

 

 

 

 

 

Trade and other payables

 

149,314

 

98,359

 

101,264

Net tax liability

 

12,642

 

18,688

 

13,997

Derivative liability

 

77

 

2,865

 

1,654

Borrowings

3

1,118,176

 

935,502

 

901,552

Total liabilities

 

1,280,209

 

1,055,414

 

1,018,467

Total equity and liabilities

 

1,469,316

 

1,250,735

 

1,195,58

 

Unaudited consolidated statement of changes in equity

For the nine months ended 30 September 2018

 

 

Ordinary
shares

Other equity reserves

Total

Non-controlling interest

Total

 

£000

£000

£000

£000

£000

Balance at 1 January 2017

1,744

165,647

167,391

-

167,391

Profit for the period

-

15,987

15,987

11

15,998

Exchange differences

-

3,524

3,524

-

3,524

Net fair value losses - cash flow hedges

-

351

351

-

351

Tax on hedged items

-

(52)

(52)

-

(52)

Total comprehensive income for the period

-

19,810

19,810

Non-contolling interest (NCI)

-

-

-

187

187

Shares issued in the period

9

-

9

-

9

Repurchase of own shares

-

(1,355)

(1,355)

-

(1,355)

Share-based payments

-

2,326

2,326

-

2,326

Dividend paid

-

(11,198)

(11,198)

-

(11,198)

Dividends paid to NCI

-

-

-

(60)

(60)

Balance at 30 September 2017

1,753

175,230

176,983

138

177,121

Profit for the period

-

23,884

23,884

33

23,917

Exchange differences

-

777

777

-

777

Recycled to profit after tax

-

(1,870)

(1,870)

-

(1,870)

Net fair value gains - cash flow hedges

-

(3)

(3)

-

(3)

Tax on hedged items

-

(7)

(7)

-

(7)

Remeasurement of defined benefit liability

-

(25)

(25)

-

(25)

Total comprehensive income for the period

-

22,756

22,756

 

Share-based payments

-

1,008

1,008

-

1,008

Dividends paid

-

(5,599)

(5,599)

-

(5,599)

Dividends paid by NCI

-

-

-

2

2

Balance at 31 December 2017

1,753

193,395

195,148

173

195,321

Impact of adopting IFRS 9

-

(14,000)

(14,000)

-

(14,000)

Impact of adopting IFRS 15

-

(231)

(231)

-

(231)

Balance post IFRS adjustments at 1 January 2018

1,753

179,164

180,917

173

181,090

Profit for the period

-

20,489

20,489

45

20,534

Exchange differences

-

431

431

-

431

Net fair value gains - cash flow hedges

-

(355)

(355)

-

(355)

Tax on hedged items

-

76

76

-

76

Total comprehensive income for the period

-

20,641

20,641

Shares issued in period

10

-

10

-

10

Repurchase of own shares

-

(2,509)

(2,509)

-

(2,509)

Share-based payments

-

2,384

2,384

-

2,384

Non-controlling interest on acquisition

-

-

-

1,645

1,645

Dividend paid

-

(14,156)

(14,156)

-

(14,156)

Dividend paid to NCI

-

-

-

(43)

(43)

Balance at 30 September 2018

1,763

185,524

187,287

1,820

189,107

 

Unaudited consolidated statement of cash flows

For the nine months ended 30 September 2018

 

 

 

Nine months ended

30 September

2018

 

Nine months ended

30 September

2017

 

 

£000

 

£000

Net cash flows from operating activities before purchases of portfolio investments

 

180,556

 

155,920

Purchase of portfolio investments

 

(203,150)

 

(155,653)

Purchase price adjustment relating to prior year

 

-

 

474

Net cash (used in)/ generated by operating activities

 

(22,594)

 

741

Net cash used in investing activities

 

(61,630)

 

(18,157)

Net cash flows generated by financing activities

 

110,511

 

30,097

Net increase in cash and cash equivalents

 

26,287

 

12,681

Cash and cash equivalents at beginning of period

 

35,943

 

23,203

Effect of exchange rates on cash and cash equivalents

 

(157)

 

266

Cash and cash equivalents at end of period

 

62,073

 

36,150

 

Notes

1.         Significant accounting policy updates

These financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2017.

 

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 Guidance 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 2017, other than IFRS 9 and IFRS 15, which have been applied for the first time this year. Changes to significant accounting policies in 2018 have been disclosed in the condensed consolidated interim financial statements of the Group for the period ended 30 June 2018.

 

The consolidated financial statements of the Group for the year ended 31 December 2017 are available upon request from the Company's registered office at Belvedere, 12 Booth Street, Manchester, M2 4AW and can also be found, along with the condensed consolidated interim financial statements of the Group for the period ended 30 June 2018, online at www.arrowglobalir.net.

 

2.         Portfolio investments 

The Group recognises income from portfolio investments in accordance with IFRS 9 from 1 January 2018.

The movements in portfolio investments were as follows:

 

Nine months ended

30 September

2018

 

Year ended

31 December

2017

 

Nine months ended

30 September

2017

 

£000

 

£000

 

£000

951,467

 

804,107

 

804,107

(17,000)

 

-

 

-

Brought forward after impact of IFRS 9 opening adjustment

934,467

 

804,107

 

804,107

211,051

 

225,734

 

155,653

(288,513)

 

(342,210)

 

(244,116)

191,241

 

247,917

 

180,953

3,255

 

16,393

 

13,319

-

 

(474)

 

(474)

1,051,501

 

951,467

 

909,442

* Inclusive of acquisition costs and portfolios acquired through acquisition of EI

 

2.         Portfolio investments (continued)

Classification of portfolio investments

The following table provides a breakdown of the categories of portfolio investments under IFRS 9.

 

Amortised cost

 

FVTPL

 

30 September

2018

 

£000

 

£000

 

£000

858,577

 

192,924

 

1,051,501

 

3.         Borrowings

 

30 September

2018

 

31 December

2017

 

30 September

2017

 

£000

 

£000

 

£000

914,711

 

763,740

 

759,478

1,349

 

6,670

 

1,210

185,024

 

153,036

 

126,234

3,624

 

1,332

 

1,323

-

 

1,816

 

1,832

13,468

 

8,908

 

11,475

Total borrowings

1,118,176

 

935,502

 

901,552

 

On 7 March 2018, Arrow Global Finance Plc issued €285 million floating rate senior secured notes due 2026 at a coupon of 3.75% over three-month EURIBOR and also issued a £100 million tap of its existing £220 million 5.125% fixed rate notes due 2024. As part of the transaction Arrow Global Finance Plc also redeemed its €230 million 4.75% over three-month EURIBOR floating rate senior secured notes.

In 2018, bond refinancing costs comprised £18,658,000 incurred on the early redemption of the €230 million notes due 2023, of which £13,623,000 was a cash cost related to the call premium. The remaining £5,035,000 was due to a non-cash write-off of related transaction fees, relating to the 2023 notes.

On 4 January 2018 the commitments under the revolving credit facility were increased from £215 million to £255 million. The maturity of the facility was extended to 2 January 2023 and the margin reduced to 2.5%.

On 1 November 2018 the commitments under the revolving credit facility were increased from £255 million to £285 million.

4.         Acquisition of subsidiary undertakings

Europa Investimenti S.p.A ("EI")

On 13 September 2018, the Group acquired 100% of the share capital of EI. EI originates and manages Italian distressed debt investments. The acquisition builds on the 2017 acquisition of Zenith, and subsequent acquisition of Parr in 2018. These three acquisitions now give the Group Italian primary and special servicing capabilities that support the Group's growth ambitions. The fair value of total consideration for the acquisition is €65,450,000 (£58,735,000) including deferred and contingent consideration. The provisional net assets acquired totalled €9,958,000 (£8,897,000).

The initial accounting for the acquisition has been determined provisionally because of the limited time available between the acquisition date and the preparation of these quarterly statements.

 

Additional Information

The adjusted EBITDA reconciliations for the periods ended 30 September 2018 and 30 September 2017 are shown below:

 

Nine months ended

30 September

2018

£000

 

Nine months ended

30 September

2017

£000

Reconciliation of net cash flow to adjusted EBITDA

 

 

 

Net cash (used in)/ generated by operating activities

(22,594)

 

741

Purchase of portfolio investments

203,150

 

155,653

Purchase price adjustment relating to prior year

-

 

(474)

Income taxes paid

6,505

 

7,510

Working capital adjustments

1,769

 

(10,752)

Dividends received from associates

-

 

2,735

Amortisation of acquisition fees

206

 

206

Proceeds from sale of property

3,759

 

-

Adjusting operating expenses

9,055

 

1,040

Adjusted EBITDA

201,850

 

156,659

Reconciliation of core collections to EBITDA

£000

 

£000

Income from portfolio investments including revaluations

191,241

 

180,953

Portfolio amortisation

97,272

 

63,163

Core collections (includes proceeds from disposal of portfolio investments)

288,513

 

244,116

Income from asset management and servicing

63,336

 

50,637

Operating expenses

(175,999)

 

(152,194)

Depreciation and amortisation

10,696

 

8,387

Foreign exchange gains

(100)

 

(593)

Amortisation of acquisition fees

206

 

206

Share-based payments

2,384

 

2,325

Proceeds from sale of property

3,759

 

-

Dividends received from associates

-

 

2,735

Adjusting operating expenses

9,055

 

1,040

Adjusted EBITDA

201,850

 

156,659

Reconciliation of Operating Profit to EBITDA

£000

 

£000

Profit after tax

20,534

 

15,998

Underlying net finance costs

35,101

 

33,495

Taxation charge on ordinary activities

5,016

 

4,073

Share of profit on associate

-

 

(1,522)

Adjusting financing costs

18,658

 

27,352

Operating profit

79,309

 

79,396

Portfolio amortisation

97,272

 

63,163

Depreciation and amortisation

10,696

 

8,387

Foreign exchange gains

(100)

 

(593)

Amortisation of acquisition fees

206

 

206

Share-based payments

2,384

 

2,325

Profit on sale of property

(731)

 

-

Proceeds from sale of property

3,759

 

-

Dividends received from associates

-

 

2,735

Adjusting operating expenses

9,055

 

1,040

Adjusted EBITDA

201,850

 

156,659

 

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.

 

'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 bureau 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.

 

'Diluted EPS' means the earnings per share whereby the number of shares is adjusted for the effects of potential dilutive ordinary shares, options and LTIP's.

 

'EBITDA' means earnings before interest, taxation, depreciation and amortisation.

 

'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).

 

'FVTPL' - Financial instruments at fair value with all gains or losses being recognised in the profit or loss.

 

'IFRS' means EU adopted international financial reporting standards.

 

'Income from AMS' includes commission income, debt collection, due diligence, real estate management, advisory fees and intra-group income for these services.

 

 

30 September

2018

 

£000

63,336

27,940

AMS Business income

91,276

 

'LTIP' means the Arrow Global long-term incentive plan.

 

'LTM' means last twelve months and is calculated by the addition of the consolidated financial data for the year ended 31 December 2017 and the consolidated financial data for the nine months to 30 September 2018, and the subtraction of the consolidated financial data for the nine months to 30 September 2017.

 

 '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 investment, 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 for the period ended 30 September 2018 is as follows:

 

30 September

2018

 

31 December

2017

 

£000

 

£000

Cash and cash equivalents

(62,073)

 

(35,943)

Senior secured notes (pre transaction fees net off)

930,000

 

779,347

Revolving credit facility (pre transaction fees net off)

188,310

 

155,757

Secured net debt

1,056,237

 

899,161

Deferred consideration - acquisitions

44,468

 

15,200

Deferred consideration - portfolios

37,516

 

15,309

Senior secured notes interest

1,349

 

6,670

Bank overdrafts

3,624

 

1,332

Other borrowings

13,468

 

10,724

Net debt

1,156,662

 

948,396

 

'NCI means non-controlling interest.

 

'Off market' means those portfolio investments that were not acquired through a process involving a competitive bid or an auction like process.

 

'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 Q3 2017 to Q3 2018 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 for the period ended 30 September 2018 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.

'WACD' means weighted average cost of debt.

 


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 [email protected] or visit www.rns.com.
 
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