Lowell Q1 - Same old... only soft(-er)

All,

As regards operating performance Q1 has been a little on the weak side, which feeds through to a slightly (even) weaker CF than usual.

Otherwise, the Q1 figures really only continue to paint the same picture we have seen all along. 

The company has been buying £106m worth of new portfolios, which is maybe about £25m higher than our estimate of its de-facto Replacement Rate (RR+). To arrive at this figure we are already taking into account the portfolio write-up.

At that rate the company was just over OCF break-even - which is ever so slightly softer than recent performance. 

With only little net CapEx, the company had to borrow £20m to cover its £25m interest bill to keep going. 

Again, this is in line with the approx. £-40m negative NCF the company generates in a steady state (keeping ERC constant).

De facto, of course, the company has had to draw £45m from its super sr. RCF, to cover both:

a) the £-20m negative FCF (£-17m OCF, largely due to excess purchases, and £-3m CapEx).

b) interest of £25m.

… And then draw the RCF some £32m more to pay for the amortisation of the ABL, some other minor financing outflows and £10m in higher cash balance.

So nothing has changed here then. If anything, the operating performance is slightly weaker than we had expected.

Wolfgang