Lowell - comment

Being a slow-moving underlying business, quarterly figures did not deviate far from projections, which themselves were closely guided already. The call did not reveal any further details on the company’s discussions with creditors which are currently underway. Management indicated that it would be able to keep up current margins, despite 3PC servicing margins being generally lower than DP margins. Further, management guided that the 2024 vintage will be printed at 23+% IRR, which is significantly higher than past purchases (and has to be). We see this as a market indication of where to value the back book too. Lowell intend to continue to sell its back-book within the scope of its Balance Sheet Velocity Program and grow acquisitions to approx. £375m in the coming year - although that should depend on the shape of a new balance sheet. As previously stated, the next catalyst should be the restructuring of Lowell's balance sheet, instead of fundamental news.