PRA Group purchased more than $1.2 billion of debts in 2023 — it’s third-highest annual total ever — but still lost $8.8 million during the last three months of the year, compared with profit of $15.9 million during the same period of 2022. For all of 2023, the company recorded a loss of $83.4 million, compared with net income of $117.1 million a year earlier. During a conference call with analysts yesterday after releasing its financials, the senior leadership of the company discussed the state of its financial turnaround and shared some of the initiatives it has in store for 2024.
Vikram Atal took over as chief executive of PRA Group last May, after the company announced a loss of nearly $59 million. Since then, the leadership has been focused on stabilizing the financial performance of the company and implementing initiatives to turn the business around, Atal said on the call with analysts. Atal said the turnaround is being built on three pillars — growing its portfolio of debts to collect with discipline, maximizing cash collected per dollar invested to optimize operational effectiveness, and managing its expenses more closely than it has in the past.
Atal said the company expects another “strong” year in 2024 for portfolio purchases, which is being driven by an increase in the amount of credit card portfolios that are available for purchase. Changes in pricing have even led the company to go back and renegotiate forward flow arrangements from last year, Atal said.
To optimize operational effectiveness, the company has adjusted its dialer strategies, enhanced its customer engagement processes, and reconfigured offers and rebuilt capacity to support portfolio growth, Atal said. A review of its process processes led the company to test an additional change in contact strategies to drive customer engagement, which was fully rolled out in the fourth quarter, and “has shown very encouraging results with regard to incremental payment plans being established,” Atal said.
Atal also identified changes in the post-judgment activity at the company that could yield an additional $100 million in cash collections for the company going forward.
