Arrow Global shares rise nine per cent on boosted full-year profits

Shares in Arrow Global climbed nine per cent this morning as the credit management services provider reported boosted 2018 profits.

The firm’s share price hit 197.2p after it reported its 2018 full-year results, up 9.6 per cent from 179.8p, before dropping slightly to 195.2p this afternoon.

The figures

Arrow announced that underlying profit after tax in 2018 was £64.1m, up 13.3 per cent from £56.6m the previous year.

Assets under management also increased in 2018, climbing 11 per cent from 47.4 per cent to 52.6m.

Why it’s important

Arrow announced that the expansion of its pan-European platform was almost completed over the course of 2018, and outlined plans to double its asset management and servicing business’s income and increase its margins over the next five years.

What the company said

Arrow Global chief executive Lee Rochford said: "2018 was an important year as Arrow largely completed the build-out of its pan-European platform through the 'One Arrow' programme.

“This positions the business to deliver superior returns in a differentiated asset class through its broad access to niche markets and distinct operating skillset.

“Within the period we were pleased with financial progress, showing strong cash generation, improved investment returns and a reduction in leverage ratios.

“At the same time, we exited a non-core geography through the sale of our small Belgian business and continued to add scale to our Asset Management and Servicing platform, which ends the year at £52.6 billion of assets under management.

“As we look to the year ahead, we are mindful of volatile market conditions and pockets of high competition, but remain confident in our ability to deliver the goals we outlined at our November 2018 Capital Markets Day.

“We see potential for further growth, strong investment returns and continued momentum in capital-light revenues."

What analysts said

Shore Capital Markets analyst Gary Greenwood said Arrow is currently one of the most undervalued stocks on the market.

He said: “We believe that the market fundamentally misunderstands the group and that, in the fullness of time, its ability to generate cash and attractive returns to shareholders will be demonstrated…we reiterate our positive stance on this fundamentally and materially undervalued stock.”