UPDATE 1-Debt collector Arrow Global's adjusted core profit rises

Thu May 22, 2014 4:34am EDT

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(Adds details, CEO, analysts' comments, share movement)

May 22 (Reuters) - British debt collection company Arrow Global Group Plc reported a 17.6 percent rise in first-quarter adjusted core profit as it recovered more debt, and said it would pay its maiden dividend along with half-year results.

Shares in the company, which listed on the London Stock Exchange in October, rose as much as 4.2 percent in early trading.

"Key to Arrow's superior return is its ability to enhance the number of paying customers, which it typically enhances by 50 percent after the vendors and a number of DCAs (debt collection agencies) have already worked hard to collect on these accounts," Numis Securities analysts said in a note.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose to 22.3 million pounds from 19 million pounds a year earlier.

Arrow Global said core collection, or collection on the company's purchased loan portfolios, rose 16 percent to 31.8 million pounds ($53.7 million) in the quarter ended March 31.

"We continue to anticipate a normal weighting of portfolio purchases to the second half of the year," Chief Executive Tom Drury said in a statement.

The company said it acquired debt portfolios with face value of 246 million pounds for 33.2 million pounds during the quarter.

"With the number (of acquired debt) almost identical to last year's, which was said to be exceptionally high, Arrow has demonstrated that the growth in the debt buying market is robust and its share is growing," Jefferies analysts said in a note to clients.

Arrow Global manages more than 8 billion pounds of debt from businesses including retail banks and credit card and telecommunications companies.

Shares in the company were up 2.75 percent at 223.76 pence at 0831 GMT. The stock has lost about 18 percent since the beginning of the year.

"Following recent relative underperformance, the shares are attractively valued in relation to our 335 pence target," Panmure Godron said in a note. ($1 = 0.5925 British pounds) (Reporting by Roshni Menon; Editing by Ted Kerr and Gopakumar Warrier)

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