KRUK Group (WSE: KRU), the leader on the debt management market in Central Europe, published the financial results for the year 2015.
- repayments from debt portfolios amounted to PLN 826 million, as compared to PLN 712 million in 2014 (increase by 16 per cent);
- the investments of KRUK Group in new debt portfolios amounted to PLN 489 million in total on six markets: in Poland, Romania, the Czech Republic, Slovakia, Germany, and Italy, as compared to PLN 571 million in the record year 2014 (86 per cent of total investments in 2014 and 178 per cent of outlays after the exclusion of two important mortgage debt portfolios acquired in 2014; PLN 489 million of outlays in 2015 do not include the investments from P.R.E.S.C.O.);
- the Group's revenues increased to PLN 611 million, as compared to PLN 488 million in the previous year (increase by 25 per cent);
- cash EBITDA increased by 7% and amounted to PLN 524 million in 2015;
- consolidated net profit amounted to PLN 204 million, as compared to PLN 151 million in the entire 2014 (increase by 35 per cent), the net profit per one share (basic EPS) increased by 32% to PLN 11.8, while return on equity maintained at the level of 26 per cent;
- considering the very good results, the management board of KRUK SA. intends to recommend at the next General Meeting of Shareholders of the Company the payment of dividend in the amount of PLN 2.0 per share from the consolidated profit; in the previous year, KRUK paid PLN 1.5 per share;
- KRUK Group ids currently finalising the transaction of purchase of a portfolio from P.R.E.S.C.O. and plans to commence operations on the acquired portfolio in Q2 2016;
- in 2015, KRUK Group was implementing the strategy for years 2015-2019, among others by establishing subsidiaries in Italy and Spain;
- in the same year, KRUK made first investments in debt portfolios in Germany and Italy; On 1 December, KRUK joined the prestigious MSCI Global Small Cap index, and on 21 March, to FTSE EM index.
- With a record result of PLN 204 million, we closed a very successful and important year in the history of KRUK Group's activity. The repayments of the acquired debt portfolios amounted to PLN 826 million, the highest amount in history. More importantly, over half billion zloty of payments originated from the pro-settlement strategy. Building relations with customers and amicable solving of debt problems constitutes are the basis of our success. We will be consistent in developing our amicable model both in Poland and in Europe. In 2015, we made significant investments which will shape KRUK's results in the future. We have invested PLN 489 million in 86 portfolios on six markets in total. As compared to the previous year, we have added two new ones – the German and Italian market. Additional potential is also generated by Spain, where we have established a company. Also, the transaction from PRESCO, currently at the closing stage, has opened us to the secondary debt trading market in Poland. The past year was the first important step which brought us closer to the implementation of the strategy for years 2015-2019 and the increase of the Group's goodwill - said Piotr Krupa, the President of KRUK S.A.
High repayment rates and breakthrough investments.
The increase of results is a result of increasing repayments from the service of own portfolios. Their value in 2015 amounted to PLN 826 million and was the highest in the history of KRUK's operations and by 16 per cent higher than in the previous year. In Q4 2015 alone the repayments amounted to PLN 221 million.
- Our unique, pro-settlement operational model has a positive impact on the repayments from own portfolios. Almost two thirds of the sum in 2015 originated from the settlements concluded with our customers. This is particularly important considering the improving economic condition. What is important, this is a phenomenon that occurs not only in Poland, but also on other markets of our activity - said Priotr Krupa.
In 2015, the entities of KRUK Group invested in 86 new debt portfolios of PLN 489 million – PLN 258 million in Poland, PLN 157 million in Romania, and PLN 73 million on other markets. The nominal value of the acquired assets amounted in total to PLN 4.9 billion. As part of the implementation of the strategy for years 2015-2019, KRUK Group develops its activity in Europe and has purchased first debt portfolios in Germany and Italy. In addition, it also established a company in Spain.
- We have made an important step in the history of our Group. Within one year we have purchased the first portfolios on the new German market, invested in the first portfolio in Italy, and evaluated the first portfolios on the Spanish market. The achievements in 2015 bring us much closer to our goal, which in our strategy is gaining the position of one of the major debt management companies in Europe. Already today we see that the seven geographical markets on which we operate offer considerable investment opportunities. Whereas for the debtors in these countries, our unique operational strategy may be a valuable and effective solution to get out of debt. We see a number of tenders which are present or may appear in the future, which indicated that also this year the demand should be strong on all of our markets - said Piotr Krupa.
The finalisation of the investment agreement with P.R.E.S.C.O.
The outlays in 2015 do not include the investment agreement for the purchase of the Polish debt portfolio from P.R.E.S.C.O. Group of an amount up to PLN 217 million. KRUK Group and PRESCO have concluded an agreement for the acquisition of one hundred per cent of shares in Presco Investments S. à.r.L., owing together with the P.R.E.S.C.O. Investment I NS FIZ fund a debt portfolio on the Polish market. It comprises two million cases of a total nominal amount of PLN 2.7 billion.
- We have started the implementation of operational activities on the acquired portfolio and we are on the right path to finalise the transaction in the next months. The agreement with PRESCO is a very important event not only for KRUK, but also for the entire debt management industry in Poland. It was the first transaction on the secondary trading market at such a scale. We expect that there will be more transactions of this type in the future, and that KRUK, with its innovative nature, will invariably set the trends and use next market opportunities - added Piotr Krupa.
Good access to financing
KRUK is prepared for next investments in all countries in which it operates, among others owing to a good access to capital. At the end of 2015 it had a PLN 560 million credit limit in banks, as part of which it can use an equivalent of PLN 220 million also in Euro.
- In 2015 we established cooperation with other institutions that want to finance the growing business of KRUK Group. We enjoy great trust of major banks in Poland. What is important, our partners want to participate also in the geographical expansion of KRUK to Western European countries. This is evidenced by attractive credit facilities obtained in the previous year, which we can use in Euro - said Piotr Krupa.
In its budget, KRUK Group has provided a place for next purchases of debt portfolios, owing to a very low level of indebtedness. The net debt ratio to equity at the end of 2015 maintained at the level of 1.0x, being the lowest since Q1 2011. Whereas the net debt ratio to 12-month cash EBITDA amounted to 1.5x, i.e. the same as at the end of the previous quarter.
After the end of 2015, KRUK launched the 3rd Public Bond Issue Programme of a nominal value of PLN 300 million, and also adopted a resolution regarding the emission of bonds on the private market of a value of up to PLN 150 million.
- We want to address the bond issue both to individual and institutional investors. The decision to start the next public bond issue programme is a result of our previous successful cooperation with individual investors. The previous issue which we carried out in last November has shown considerable interest among individual investors. We also appreciate the trust which is institutional investors continuously put in us. We beat the records not only with the increasing net profit - we constantly develop and see numerous investment opportunities, that is why the issue for PLN 150 million addressed to them will be the greatest in the history of our company - said Piotr Krupa.
Inkaso, Novum loan, and ERIF.
KRUK has had a successful year also in the sector of debt management on a contract basis. Inkaso has generated revenues of PLN 30 million, with a significant increase of the serviced portfolio in all countries up to PLN 4.0 billion in the entire 2015. In Poland alone KRUK acquired for service the cases of a nominal value of almost PLN 3.6 billion, i.e. more than four of our competitors in total. This gave KRUK a 40% market share.
- KRUK competes effectively on the difficult and very fragmented payment collection market. We achieve similar results and strengthen our position on the market. Also, owing to our presence in this segment, we improve our operations and analyses - said Piotr Krupa.
Apart from the payment collection segment, in 2015 the other activities of the Group were growing in importance, i.e. ERIF Register of Debtors BIG S.A. and the Novum loan facility. Both services generated in total over PLN 18 million revenues and it was the highest results in the history of KRUK's operations. Both EIRF's base and Novum loan facility are important elements of the entire process of building relations with consumers but also are gradually becoming larger, independent businesses.
Another KRUK dividend.
The Management Board of KRUK recommends to the General Meeting of Shareholders the payment of dividend in the amount of PLN 2.0 per share, i.e. approximately PLN 35 million from the consolidated net profit. The rest of the Company's result was allocated to reserve capital. If the General Meeting of Shareholders accepts the Management Board's proposal, it will be the second year in a row when KRUK shares its profit with the shareholders. In the previous year the dividend amounted to PLN 1.5 per share.
- We have had another very good year. We have proven that we can grow dynamically and enter new markets, and also share the profit with the shareholders. The payment and amount of dividend take into account our demand for financing of investments in the future and the current level of indebtedness. I believe that, as last year, the payment will strengthen the culture of building the result and encourage the shareholders to accumulate the shares held - said Piotr Krupa.
About KRUK Group
KRUK S.A. is the largest debt management companies in Poland. In 2015, it purchased and took over for handling debts of the value of PLN 8.9 billion on seven markets: in Poland, Romania, the Czech Republic, Slovakia, Germany, and Italy. The company has been listed on the Warsaw stock exchange since 2011. The consolidated revenues from the Group's sales amounted to PLN 611 million in 2015.