STOCKHOLM--(BUSINESS WIRE)--Regulatory News:
Fourth quarter 2014
- Consolidated net revenues for the fourth quarter of 2014 amounted to SEK 1,370 M (1,231).
- Operating earnings (EBIT) amounted to SEK 360 M (340). Operating earnings include revaluations of purchased debt portfolios amounting to SEK 7 M (7), and items affecting comparability amounting to a negative net of SEK 35 M (0). The operating margin excluding revaluations and items affecting comparability was 28 percent (27).
- Net earnings for the quarter amounted to SEK 294 M (236) and earnings per share were SEK 3.85 (3.00).
- Cash flow from operating activities amounted to SEK 784 M (664).
- The carrying amount of purchased debt has increased by 15 percent compared with the fourth quarter 2013. Disbursements in the quarter for investments in purchased debt amounted to SEK 454 M (266).
- Consolidated revenues during the 2014 full-year amounted to SEK 5,184 M (4,566).
- Operating earnings (EBIT) amounted to SEK 1,430 M (1,207). Operating earnings include revaluations of purchased debt portfolios amounting to SEK 35 M (7), and items affecting comparability of net -SEK 35 M (0). The operating margin excluding revaluations and items affecting comparability was 28 percent (26).
- Net earnings for the year amounted to SEK 1,041 M (819) and earnings per share totaled SEK 13.48 (10.30).
- Cash flow from operating activities amounted to SEK 2,672 M (2,305).
- The carrying amount of purchased debt has increased by 15 percent compared with the year-end 2013. Disbursements during the year for investments in purchased debt amounted to SEK 1,950 M (2,475).
- The Board of Directors proposes a dividend of SEK 7.00 (5.75) per share, totaling SEK 517 M calculated on the number of shares outstanding as per December 31, 2014 (445).
Comment by President and CEO Lars Wollung
Intrum Justitia's strong performance continued into the fourth quarter. Consolidated income rose by 8 percent and operating earnings increased by 13 percent compared with the yearearlier period, adjusted for currency effects, revaluations of purchased debt portfolios and items affecting comparability. It is mainly the Central Europe and Western Europe regions that are contributing to growth and the improvement in earnings. We are retaining a high level of profitability in Northern Europe, but the performance remains relatively unchanged compared with the year-earlier period. For our service lines, both Financial Services and Credit Management contributed to the improvement in earnings in the fourth quarter.
Investments in purchased debt in the fourth quarter totaled SEK 454 M, which contributed to a healthy increase of 15 percent in the carrying amount of purchased debt since the end of 2013. Moreover, the fourth quarter has seen a solid return for purchased debt of 21 percent excluding items affecting comparability. The supply of purchased debt has been relatively good in several countries, but we have also seen persistently high price competition in a number of markets.
We can look back on a very positive financial development for the full-year 2014. In relation to our financial objectives, we are achieving an increase in earnings per share of 31 percent, which is well above our target of a minimum 10 percent increase, and a return on purchased debt of 20 percent, which exceeds our target of a return of at least 15 percent. For our third objective regarding debt (net debt in relation to operating earnings before depreciation and amortization), we report a ratio of 1.9, which is just short of our target of a minimum of 2.0.
Intrum Justitia is well positioned to achieve continued healthy growth during the coming years. We have an effective business model, with credit management services and financial services combining to provide mutual support. Our organization has a strong focus on constant improvements, with continual development and follow up of a vast number of change management projects in all countries. Over the next few years, we therefore see good opportunities for profitable growth, mainly through increased operational efficiency, growth within purchased debt, acquisitions within Credit Management and development of new services for financing before an invoice has fallen due.
Presentation of the year-end report
The interim report and presentation material are available at www.intrum.com/Investor relations. President amp; CEO Lars Wollung and Chief Financial Officer Erik Forsberg will comment on the report at a teleconference today, starting at 9:00 am CET. The presentation can be followed at www.intrum.com and/or www.financialhearings.com. To participate by phone, +44 (0) 203 428 1434 (UK) or +46 (0) 8 566 426 92 (SE).
For further information, please contact:
Erik Forsberg, CFO
Tel: +46 8 546 102 02
Intrum Justitia is Europe's leading Credit Management Services (CMS) group, offering comprehensive services, including purchase of receivables, designed to measurably improve clients' cash flows and long-term profitability. Founded in 1923, Intrum Justitia has some 3,600 employees in 20 markets. Consolidated revenues amounted to about SEK 4.6 billion in 2013. Intrum Justitia AB is listed on NASDAQ OMX Stockholm since 2002. For further information, please visit www.intrum.com
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By Caroline SimsonLaw360, New York (January 29, 2015, 3:00 PM ET) -- A California federal judge on Wednesday tossed a proposed class action accusing a debt collector of providing misleading information to consumers regarding their credit records, finding the plaintiffs couldnt prove the company was acting as a credit repair organization.
Granting Midland Credit Management Inc.s motion to dismiss, US District Judge Cynthia Bashant concluded that the company had never implied that it was acting as a credit repair organization by telling consumers it could help [them] get back on track, and that the company never offered credit-improvement...
US Rep. Steve Cohen sponsored legislation in the Tennessee Senate that led to creation of the HOPE Scholarship, which provides four-year college students with $4,000 a year for their studies.
Yet, it isnt coming close to covering the cost of a university degree, especially with tuition and fees nearly doubling over the last decade as state funding for higher education has stagnated.
Consequently, more than half of Tennessee students are graduating with some $25,000 in student loans, putting a burden on their finances before they can become entrenched in a career, if theyre fortunate enough to find one in their field of study.
Many students find themselves unable to pay their debt, even though they can receive a deferment until they land a good job, and that often leads to default and potential bankruptcy.
In May 2014, Cohen, a Memphis Democrat, joined several US senators and representatives in urging Secretary of Education Arne Duncan to bring more fairness to struggling students by establishing clear standards of eligibility for lsquo;undue hardship discharge of federal student loans in bankruptcy.
The idea is to create more consistency in how Department of Education contractors handle claims for undue hardships, allowing the federal government to focus efforts on cases in which it is more likely to recover loans.
Contractors such as Educational Credit Management Corporation aggressively challenge the efforts of debtors to show undue hardship in having their student loans discharged in bankruptcy, the representatives and senators say.
While we recognize the Departments prerogative to fairly collect on student loan debts owed to it, we do not find it sensible or cost-effective for the Department or its contractors to engage in lengthy legal challenges and appeals against bankrupt student loan borrowers who have demonstrated a clear and legitimate inability to repay their loans, a joint statement from the congressional group reads.
In addition, Cohen is lead sponsor of a bill designed to restore fairness in student lending by ensuring privately issued student loans are treated the same as other private debt in bankruptcy cases.
Cohen says the law was changed unjustifiably in 2005, and he wants to amend the US Bankruptcy Code to allow debt from private loans made by for-profit lenders to be discharged, as it was before 2005.
People who seek higher education to better their futures should not be dissuaded from doing so by the threat of financial ruin, Cohen says
The bankruptcy system should work as a safety net that allows people to get the education they want with the assurance that, should their finances come under strain by layoffs, accidents, or other unforeseen life events, they will be protected.
Have a strategy. What are your criteria for giving credit; which customers will you monitor; how will you spot potential defaulters? The Better Payment Practice campaign says: Cash flow is the life blood of a business and should be protected as a priority. Good credit management includes a strategy for credit checking customers, a well-planned collection process and a system for dealing with queried invoices.
Get checking. According to Experian, less than half of SMEs conduct any due diligence on new customers or suppliers. A basic credit report includes a credit score, a credit limit and details of County Court judgments. Ade Potts, managing director of Experians SME business, says: Carrying out a credit check on any new business partner should be standard practice.
Its not a one-off. Its not enough to credit check once, or even once a year. A credit report gives you a snapshot at a moment in time, he explains. So, monitor on an ongoing basis.
Choose your focus. You may not have time to monitor all your customers. Using the Pareto Principle, you could focus on the 20% that contribute 80% of your turnover or profits. Dont work through in alphabetical order.
Look for red flags. Alarm bells are often sounded by a changing pattern of behaviour, says Nick Hood of financial risk specialist Company Watch. Orders going up suddenly could mean another supplier has put a stop on this customer. Delays in taking deliveries or in paying are also warning signs, says Hood. If a company asks for more credit or says it can only pay a round sum this month, those are both classics.
Visit Companies House. Company accounts give you the financial picture, but theres more to look for: a new owner can affect creditworthiness, while departing directors may indicate a business in decline. Late filing of accounts is a red flag, says Hood, 80% of companies going into liquidation have overdue accounts.