PRA Group reported its second quarter financial results earlier this week, and while the news at the company was good, there were a number of interesting nuggets that the company disclosed during a conference call with analysts that might be of more interest. The company provided updates on the turnaround project it initiated a year ago, including ways that it is improving operational execution and managing expenses. One example is how it has increased the size of its call center staff by 50% in the past year because of all the portfolios it has acquired, but how 25% of the company’s representatives are now working in offshore call centers.
Overall, the company reported net income of $21 million for the second quarter of 2024, compared with a net loss of $3.8 million a year ago. On an earnings-per-share basis, the company earned $0.54 during the second quarter, compared with a loss of $0.10 per share during the same quarter a year ago. Total cash collected worldwide during the second quarter was $474 million, up from $450 million last year.
Here are some of the additional nuggets that were shared during the company’s call with analysts.
We are highly encouraged that in this relatively short period of time we have onboarded teams in two separate low-cost locations in Asia. Today, more than 25% of our collectors supporting the US business are based offshore and we expect this proportion to increase over time. In addition to the absolute level of expense savings, we expect that our outsourcing initiatives will help us enhance our calling strategies and better navigate the cyclical nature of our industry Vikram Atal, PRA Group CEO
What we are also very encouraged by in the US in particular, I mentioned in my comments, is that we’re seeing that the number of payment plans are increasing, and that is a positive from our perspective. Atal, when asked about impact of inflation on consumers
The general learning in the industry is that it takes between six and 12 months, maybe nine to 12 months, for a collector to get seasoned, right? So, none of the collectors that we have in our offshore locations have had nine months of experience. Right? So, we’re going to watch and track effectiveness and full performance and stability of those relationships over certainly the balance of this year before we decide how much further to ramp that up. … In terms of the cost differential, we don’t disclose that, but I would say to you it’s a meaningful differential, which is what led us to evaluating this alternative, right? Atal, when asked about cost to collect using offshore vs. U.S. call centers
Learn More. Access the transcript of the call
