Axactor: NPL purchases back to pre-pandemic levels - ABG

Lower costs driving higher PTP (31% vs. cons.)
… but cash EBITDA just aligned vs ABG, just soft vs cons.
EPS 3% higher than cons.; just positive for the stock

Gross revenue of EUR 77.2m in line with expectations
PTP came in at EUR 11.8m (NOK 0.4m, restated), 41% above ABGSC estimates and 31% above consensus. This was driven by a net revenue of EUR 56.2m (6% vs. ABGSC and 4% vs. consensus), positively affected by a decline in amortization (rate from 37% in Q1’21 to 32%). Further, gross collection was in line with our estimates and came in at EUR 64m (vs. cons. at EUR 67m), up 1% y-o-y. In terms of 3PC, the revenue increased 18% y-o-y driven by a strong market in Q1’22 and the acquisition of Credit Recovery Service in Italy (in which the integration is on track). Costs came in at EUR 29.2m, slightly better than our expectations (1%), which is a historically low cost-to-collect driven by a restructuring cost of EUR 3.2m in Q1’21 and an increased focus on self-service. Cash EBITDA (EUR 48.1m) were aligned with our expectations, but a tad soft vs consensus, growing by 9% y-o-y. In terms of the discontinued operations, REOs, the results were higher than expected, with a net profit of EUR -1.6 (EUR -2.1).

Portfolio purchases back to pre-pandemic levels
Axactor deployed portfolio purchases of EUR 76.9m, which is higher than our expected EUR 55m (cons. 48m), coming in at an IRR of 20% (above the current portfolio stack average IRR of 16.5%). In addition to forward flow contracts, EUR 158m is secured for 2022 (up from EUR 117m in Q4’21), at IRR of ~21%. This indicates improved profitability going forwards. They still expect EUR 200-250 in total NPL investments for 2022. For 3PC, they have seemingly signed several contracts during Q1’22, and guide for a strong pipeline throughout 2022.

EPS 3% higher than cons.; just positive for the stock
The EPS (excl. REOs) came in at EUR 0.024, 15% higher than ABGSC estimates and 3% higher than consensus. As such, we believe the share could be ...
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Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/axactor/Equity-research/2022/4/axactor---npl-purchases-back-to-pre-pandemic-levels/