Debt collector gears up for IPO

Cabot Credit Management, Britain’s biggest debt collector, has pushed the button on a £1 billion stock market flotation in London.

The group, owned by US investors Encore and JC Flowers, will look to raise £195 million from the initial public offering (IPO) in November.

Plans for a flotation were put on hold earlier this year after Peter Crook, former chief executive of Provident Financial, resigned from Cabot’s board.

But yesterday the Kentbased firm’s chief executive Ken Stannard said: “As one of the largest players in Europe it now feels right to be listing on the London Stock Exchange. We are faced with significant untapped growth potential in each jurisdiction as creditor clients continue to partner with us to improve their own performance.”

Cabot, which also operates in Spain, France and Portugal, added that it will continue to acquire “portfolios in the attractive UK market and underpenetrated European geographies”.

The flotation comes amid concerns over rising consumer debt levels in Britain. Last month the Bank of England warned that banks could be left nursing a £30bn hit if their consumer loans books turn sour. Lenders are currently sitting on £145bn of outstanding consumer debt.

Cabot’s business model involves buying unsecured consumer debt from financial services institutions and then taking responsibility for recovering the loans. Last year it clocked adjusted operating profit of £247.8m.

Andy Haste, chairman-elect at Cabot, said: “At a time when there is an increased focus on consumer credit, Cabot continues to lead the industry as it works to identify affordable solutions.”