June 25, 2018 / 1:24 PM / 2 months ago

Italian debt collector Cerved expects M&A to boost profits

MILAN (Reuters) - Italian data provider and debt collector Cerved Group (CERV.MI), which this year bought Monte dei Paschi di Siena’s loan recovery business, expects acquisitions to boost its core profit growth further in the next three years.

Cerved said on Monday it was aiming for annual growth of 5-8.5 percent in adjusted earnings before interest, tax, depreciation and amortization in 2018-2020, with acquisitions contributing 2-3.5 percent.

Thanks mainly to the Monte dei Paschi (BMPS.MI) deal, Cerved sees a doubling this year in the volume of loans under management to 52.6 billion euros, cementing its position as Italy’s second-biggest debt recovery company after doBank (DOB.MI).

DoBank last week unveiled its own business plan targeting an annual core profit growth of more than 15 percent in 2017-2020.

Italy has become Europe’s biggest market for bad loans following a recession which wiped out a quarter of the country’s industrial output.

Cerved, which listed its shares in Milan four years ago, said debt servicing revenues had risen on average by more than 30 percent annually in the past six years.

Loan collection accounted for 23 percent of Cerved’s 401.4 million euros in revenues last year, while 71 percent came from the credit information business.

The Milan-based group also said it had recently sealed four acquisitions, without disclosing their value, and planned more bolt-on deals.

“We want to dial-up a bit on M&A,” CEO Marco Nespolo told an investor presentation in London.

Under the recently concluded deals, Cerved is taking majority stakes in big data analytics group SpazioDati and Swiss search engine optimization firm Pro Web Consulting.

It is also set to buy the big data analysis arm of Italian company Bauciweb as well as 30 percent of a joint-venture with law firm LaScala.

Reporting by Valentina Za and Massimo Gaia. Editing by Jane Merriman

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