Intrum - diversification pays off
All,
Please refer to our updated analysis here.
Intrum's Financial Well-Being Barometer (below) suggests that the Baltics, the Czech R., Ireland and Belgium have seen consumers prosper during the pandemic, while southern European consumers have generally lost out.
With its strong diversification, Intrum is present in a good number of those smaller, better-performing markets, while Arrow and Lowell are predominantly in markets that are feeling more of the impact.
Overall, Intrum is one of the most solid debt collectors, having turned Sarria Adjusted NCF positive pre-pandemic. We are seeing a worrying trend towards one-off settlements that are window dressing the results. But we assume this will be discontinued after the pandemic is over and given the company’s liquidity and sound performance pre-pandemic, we are not concerned for Intrum, even if management decide to take a write-off.
We, therefore, see no compelling rationale to go short this name at this time.
Happy New Year!
Wolfgang
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E: wfelix@sarria.co.uk
T: +44 203 744 7003