Debt buyer Portfolio Recovery Associates Inc., Norfolk, Va., reported total revenues for the first quarter ended March 31 of $140.1 million, up 25% from the year-ago period.
The figure was driven by cash receipts - the total of cash collections plus fee income - of $233.9 million, up 28% from $182.5 million a year ago.
Steve Fredrickson, chairman, president and CEO, said the growth in the quarter continued momentum generated in 2011.
"Our expanded focus beginning this quarter on legal collections from those who can, but won't, pay back their debt, performed better than we anticipated. Legal collection costs of $23.7 million were on target, with legal cash collections increasing 42% over first quarter 2011," he said.
Cash collections from finance receivables rose 31% to $218.0 million in the first quarter from $166.7 million in the year-ago period. The jump came as the company spent $111.4 million to purchase 91 defaulted debt portfolios from 16 different sellers. The portfolios carried a face value of $1.46 billion.
In January, PRA announced it had acquired Mackenzie Hall Holdings Ltd., a large UK debt collection and purchasing group (see story). PRA purchased 100% of the equity interest in Mackenzie Hall for a maximum price of approximately $51 million in cash.
Mackenzie Hall, based in Kilmarnock, Scotland and founded in 2003, offered outsourced and contingent consumer debt recovery on behalf of banks, credit providers and debt buyers, as well as distressed and dormant niche portfolio purchasing. The company employs an estimated 170 people at its headquarters and contact center in Kilmarnock.
"Revenue from our fee-for-service businesses slightly improved year-over-year, largely due to the inclusion of Mackenzie Hall. We look forward to the growth and diversification opportunities that Mackenzie Hall provides us," he said. "Our focus on enhancing shareholder value - driven in part through our share repurchase program - has set the stage for sustained growth and success in 2012. We continue to identify opportunities to invest in our growth and improve our operational performance as PRA strives to be the standard by which all other firms in our industry are measured."