The following is a summary of the Encore Capital Group, Inc. (ECPG) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Encore Capital Group reported record U.S. deployments in Q1, with portfolio purchases amounting to $296 million, a 7% increase from the same period last year.

• Q1 collections totaled $511 million, a 10% increase from Q1 2023.

• The Group's GAAP net income and earnings per share (EPS) in Q1 rose by 25% and 27% respectively compared to the same period the previous year.

• Cash generation was up 14% compared to Q1 2023.

• Encore's leverage at the end of Q1 was 2.8x, a slight reduction from 2.9x at the end of 2023.

Business Progress:

• Q1 marked strong US portfolio purchasing, with a record deployment of $237 million in the US market due to favorable purchasing conditions.

• Despite the competitive European market with inconsistent higher cost of capital, the company primarily allocated its capital to the US market because of higher returns.

• Selectivity is being practiced in UK and Europe due to less attractive returns.

• The company successfully issued $500 million of 2029 senior secured notes in Q1, marking its entry in the U.S. high yield bond market.

• The company plans to use the funds from this offering to redeem its 2026 sterling senior secured notes in November 2024.

• They reiterated their 2024 guidance, projecting that their portfolio purchasing will exceed the 2023 total, and expecting collections to grow approximately 8% to over $2 billion.

• The company achieved an efficiency ratio of 52% on a trailing 12-month basis, with flat expenses and increased collections in the quarter.

• Management anticipates improved efficiency ratios and growing operating leverage due to increasing collections and plans to continue bolstering purchasing in 2024.

More details: Encore Capital Group IR

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