In Q1 2016, the BEST Group achieved record results with a net profit of 34.3 million PLN and revenues of 65.5 million PLN. This is, respectively, an increase of 146% and 68% over the previous year. Debt repayment figures, which are of key importance for the Group, have considerably improved as well, increasing by 28% to reach 40.9 million PLN.
Q1 of this year was by far the best in the Group's history. Two- and three-digit growth dynamics were recorded by key indicators: revenue, profit, debt repaid and investments in the purchase of new debt portfolios.
"We are constantly developing and expanding our operations. We are most happy about the fact that the huge dynamics from the last three months of 2015 still continue this year. This proves that our investments in our IT system and the changes in the strategy of amicable debt collection are starting to deliver some tangible results. I am convinced that the upcoming months will also abound in good news for the Group," said Krzysztof Borusowski, President of BEST.
In Q1, the repayments of debt portfolios benefitting the BEST Group totalled 40.9 million PLN, which was 28% more than in the same period of the previous year. The dynamic growth in this area began at the end of last year, and Q4 was the best in the entire year for 2015. One of the reasons for the significant improvement in the growth rate is the partial implementation of a new IT system, which has facilitated the debt management process. The system, whose development has already cost 7 million PLN, will become fully operational in H2 2016.
The Group is consistently heading towards a planned increase in investments. Once it had doubled its outlays on the purchase of debt portfolios last year, in Q1 2016, the Group purchased portfolios with a nominal value of 321.7 million PLN for 44.7 million PLN – this is more than half the funds allocated for that purpose throughout the whole of 2015, when spending amounted to 85.9 million PLN (with a nominal value of the portfolios purchased of 897 million PLN). Investments in debt portfolios are treated as an organic path for the Group's development. Such a large scale investment is also possible because of the BEST programme of public bond issues, which brought in 300 million PLN over 2 years.
Already in 2016, the company has managed to place programme bonds worth 90 million PLN. In February and April, as part of two public issues addressed to retail investors, more than 2000 investors acquired the company's bonds. In fact, on two occasions the company had to close the lists after two days due to significant oversubscription.
"The bond programme is one of the most important incentives for the Group's development, which proved very helpful in increasing the scale of operations. Investors' interest in the two issues we have made this year was so high that we had to apply reductions of 64% and 50%, which is, in turn, tangible proof of their trust in our debt securities as an interesting and safe investment. On the other hand, for us, bonds make an attractive source of funding, which is why we will return to the market with another bond programme in H2," said Krzysztof Borusowski.
Despite the large investments, the Group maintains a low debt ratio. This is possible thanks to a systematic increase in equity. In Q1 2016 it was increased by one fourth, to 354 million PLN, which was not only related to the retained earnings but also the issue of shares. In March, the main shareholders increased the company’s capital by 36.5 million PLN. The new issue of shares were taken for 26.78 PLN, which accounts for the valuation of 600 million PLN, almost twice that of the current company share price on the Warsaw Stock Exchange.
BEST Company Overview
BEST S.A. is a company listed on the Warsaw Stock Exchange since 1997. It specialises in trading in and management of non-performing debt. The BEST Group actively invests in debt portfolios (mainly bank portfolios) using securitisation funds; it also provides debt collection services on a commission basis: to banks, telecoms, power sector companies and other providers of mass-market services.
BEST is also a shareholder of BEST TFI, which manages investment funds with total assets of 984 million PLN (as at 30 December 2015). With its combined expertise in debt collection and the creation and management of investment funds, BEST has been able to aggregate all the components of its business model within one capital group.
The total nominal value of own debt and the debt of other entities managed by BEST is over 10.6 billion PLN (as at 30 December 2015). In 2015, the BEST Group generated a net profit of 82.2 million PLN with operating revenues of 140.1 million PLN.
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