Portfolio Recovery Associates, a Norfolk, Va.-based debt buyer, reported strong results for the third quarter ended Sept. 30, including increases in cash collections, net income and revenue.
The company in the quarter paid $94 million to purchase $1 billion face value of portfolios. The receivables were acquired from 12 different sellers as part of 95 defaulted portfolios. The amount the company spent on bankrupt account purchases declined 36 percent from the same period a year ago.
Total revenues in the quarter were $151 million, up 32 percent from the year-ago period. The revenue increase was led largely by a 26 percent jump in cash collections, which were $229 million for the quarter. Net income in the quarter increased 31 percent to $33 million.
“As the US economy slowly recovers, more and more consumers are paying down their debt, resulting in strong, year-over-year growth in cash collections, as well as record revenue and net income for PRA,” said Steve Fredrickson, chairman, president and chief executive. “Our business model of diversified purchases and cash collections from both bankrupt and non-bankrupt portfolios of debt, combined with domestic-led call centers and fees earned from our business services, continued to drive our record results.”
PRA’s businesses services units generated fee-for-service income of $14.8 million, compared with $11.4 million in the year-ago period. The jump was primarily as result of income generated by the company’s UK business, which it acquired in January. PRA named a new CEO for that company in July.
The company counted 3,103 employees at the end of the third quarter 2012, up 24 percent from the same period a year ago. Among those, 1,992 are classified as collectors, up 31 percent from 2011.
Earlier this week, PRA announced plans to hire more than 100 employees at its call center in Jackson, Tenn.