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BEST Group records further increase in revenues and efficiency

BEST Group’s operating revenues in the first half of 2019 amounted to PLN 136.2 million and were 23% higher than in the corresponding period of 2018. Operating profit reached PLN 72.9 million, up by 33% YOY, while profit net attributed to BEST’s shareholders increased by 21% YOY to PLN 40.5 million.

 

BEST Group has used the difficult period on the non-performing debt market to increase our operational efficiency and improve the balance sheet structure. As a result, we have achieved some of the highest profitability ratios and one of the lowest debt ratios in the industry.

 

In Q2 2019 alone, BEST Group’s operating revenues increased by 28% YOY to PLN 71.5 million. Our operating profit for that period was PLN 37.7 million, while the net profit attributed to BEST’s shareholders amounted to PLN 20 million, up by 52% and 44% respectively compared to the second quarter of 2018.

 

– The supply of bank claims is gradually increasing, but the price expectations of sellers and buyers still often diverge, leading to failed tenders. That is why in the second quarter we still held back on the purchase of new claim portfolios. In that period, we purchased only one portfolio with a nominal value of over PLN 142 million – said Krzysztof Borusowski, President of the Management Board of BEST. – We have used the period of less intense investing activities to further improve our operating efficiency. This allows to generate a stable level of repayments under the managed claim portfolios. We also achieved an increase in profitability despite the significant costs associated with adjusting our debt collection strategies to the legislative changes and securing the value of our claim portfolios – added Krzysztof Borusowski.

 

In the first half of 2019, court and enforcement costs related to securing assets incurred by BEST Group, which will generate higher revenues from claims in the future, amounted to PLN 16.6 million, up by 85% compared to the same period of 2018. In turn, operating expenses, excluding court and enforcement fees, were slightly lower than a year ago thanks to cost discipline maintained in all areas of activity.

 

Considering that the growth rate of revenues exceeded the cost increases, in the first half of 2019, BEST Group recorded an increase in key financial results, both in nominal terms and in relation to revenues. Our operating profit margin increased to 54% from less than 50% a year ago, and the Group’s net profitability increased to 37% from 30% in the first half of 2018. Considering the net profit attributed to BEST’s shareholders, net profitability remained at a high level of around 30%.

 

At the same time, BEST Group continued to reduce its debt, as a result of which its debt ratio was decreased (net debt / equity) at the end of June 2019 to 1.06, which is one of the lowest in the debt collection industry.

 

– We do not intend to give up on potential opportunities on the debt market, which is why we also secured funds for refinancing and for investments in new portfolios by increasing the limit of the available bank loans by an additional PLN 100 million to PLN 250 million – said Marek Kucner, Vice-President of the Management Board of BEST.

 

An important event in BEST Group in the first half of this year was the launch of our own debt collection operations on the Italian market through the company BEST Italia. This will significantly reduce the need to outsource debt collection to local third parties. BEST Italia has accepted about 65% of the nominal value of the managed claim portfolios on the Italian market from previous servicers, and by the end of this year this figure is expected to increase to at least 95%. In the first half of 2019, revenues from the Italian market already accounted for about 12% of total revenues of BEST Group.

 

An important event on the Polish market in the first half of this year was the launch of the Payhelp platform. This is the first online comprehensive solution on the Polish market for micro and small business operating in the B2B and B2C sector, allowing them to recover money from unpaid invoices in a simple, effective and cost-efficient way.

 

 

Selected financial results of BEST Group

(PLN million)

Q2 19

Q2 18

change YOY

H1 19

H1 18

change YOY

operating revenues

71.5

56.0

28%

136.2

110.9

23%

operating profit (EBIT)

37.7

24.8

52%

72.9

54.9

33%

net profit, of which:

25.2

14.0

79%

50.4

33.7

49%

 attributable to BEST’s shareholders

20.0

13.9

44%

40.5

33.5

21%

adjusted cash EBITDA (without Kredyt Inkaso)

43.7

37.0

18%

83.5

77.3

8%

full cash EBITDA

57.2

50.8

13%

107.4

101.0

6%

 

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