There is little evidence that consumers are having a difficult time making ends meet and paying their debts, according to executives at PRA Group, which shared that insight and more during a conference call with analysts this week to discuss its third quarter financial performance.
By The Numbers: The company lost $12.2 million during the third quarter of 2023, compared with a profit of $24.7 million during the same period last year. Revenue during the third quarter was $216 million, down from $245 million last year. The company purchased $311 million worth of portfolios worldwide during the third quarter, compared with $183 million last year. The company collected $419.5 million worldwide, up from $412 million in 2022.
The Context: Mentioning that there has been a lot of attention about the state of the economy and the impact that trends like rising inflation are having on consumers, Rakesh Sehgal, the chief financial offer at the company, said that the fact that the company’s cash collections during the first nine months of the year, especially on older debts, is proof that consumers aren’t struggling or worried.
- “In these markets, we have observed fewer large one-time payments,” Sehgal said. “However, the proportion of customers paying us has remained stable, so we think that this will cause a timing delay instead of an overall reduction in cash collections.”
Looking Ahead: The company anticipates that cash collections will continue to be strong in the coming quarters, especially as a result of a number of initiatives that the company has undertaken recently, Sehgal said in response to an analyst’s question.
The Last Word: “So all-in-all, between the consumer, where they are, and they are our customers today, and the increased supply coming, we view that as a tailwind for our business,” Sehgal said.
