How do we evaluate a year in which the world turned upside down? In March 2020, we announced our full-year results, which revealed a strong financial performance, new partnerships and much to look forward to. Ten days later, the UK was in lockdown.
At Lowell, we have long talked of the pride we have in our professionalism and the resilience of the business. This was never more tested, or better demonstrated, than in 2020. At a time of global chaos, we had to keep our colleagues safe while being there when our customers needed us most.
Throughout the crisis, our colleagues showed extraordinary resilience, adaptability and skill. In the most trying of circumstances, the business not only stayed on track but has come out the other side of 2020 stronger.
Lowell can look ahead to the rest of 2021 and beyond with confidence, as shown by another strong set of full-year results, which were posted last week. This was underpinned by a complete refinancing of the balance sheet with new equity investment, a bond raise and an extension of our debt maturity. The support we received showed the confidence the market has in us and reaffirmed our position as a leader in the sector.
We ended the year a leaner, better business. At a group level, our cash EBITDA margins expanded by 300 basis points. In the UK specifically, our cash EBITDA margin for FY20 was 63%, up from 59% at FY19. We are confident this focus on efficiency will continue, generating an annualised cost saving of around £50m by the end of the year at a Group level.
Another reason for our confidence, as we look to the rest of 2021 and beyond, is with the Group ending last year with £466m of liquidity, we are in an excellent position to take advantage of market opportunities. The financial impact of the pandemic is likely to see a stark rise in Non-Performing Loans, and our new capital structure has put us in an excellent position to leverage their increased supply.
But, as we take advantage of these market opportunities, we will not lose sight of our commitment to customers and indeed society. As a company, we always look to the people beyond the numbers, and we pride ourselves on the compassion and understanding of each customer’s circumstances. We engage with those struggling with debt by treating them with care. Our services are highly rated – our Trustpilot score is 4.5 out of 5 from around 10,000 reviews – and we want to continue to build on that. Last year in the UK, we helped 335,321 people clear their debts with us and take huge steps on the path to a better financial future. We are all extremely proud of that.
Last week was Debt Awareness Week, and a reminder that Covid-19 has left countless households struggling financially. Our research found two-thirds of Brits don’t discuss their debt with others and half of those asked were too embarrassed to talk about it. We know, however, that the sooner people engage with their debts, the more likely they are to save money, alleviate stress and find the right solution. Early engagement is critical to help households restore their financial health. That is why one of our key areas of focus this year is to collaborate with other key players in the sector to understand and breakdown those initial barriers to seeking support.
We’ve always said we want to make credit work better for all and the best way to do that is to build trust with colleagues, consumers and clients. This promise to helping our customers was never more visible than during those early days of the pandemic. Lowell published a list of customer commitments to help those with financial difficulties, such as extended breathing spaces, additional payment flexibility, and no new litigation claims or bailiff action.
Beyond the impact of the pandemic, part of making things easier for our customers has been improving the digital tools to support them, which has changed how they interact with us. We have already worked on improving the speed, ease, and certainty of our website, which has proved hugely successful – it helped boost digitally created plans to 40% of the total number in the fourth quarter.
We take our environmental, social and governance (ESG) responsibilities very seriously, and will provide regular ESG updates to be as transparent as possible. In addition to the critical role we play in society, we have also launched a number of initiatives through Lowell Giving. Our donation to Leeds Cares supported the NHS throughout an extremely difficult year, and our contribution of 20 laptops to Debden Primary Academy helped make learning accessible for students.
We are always looking to improve industry standards – over the past year this included working with the Centre for Social Justice to champion the Debt Management Bill, which seeks to raise standards in public sector debt collecting. This is a business whose whole reputation has suffered from many of the bad practices employed in the public sector. It is time to change that story and show what an ethical, responsible and fair debt management company looks like.
We want to promote discussion around debt and those who are struggling with it. In partnership with research organisation the Urban Institute, we launched the Financial Vulnerability Index, a major data tool to track financial vulnerability across the UK. As the economic fall-out of coronavirus bites, this offers a clear and detailed picture of the financial state of the nation. At a time that policymakers need to know how constituents are faring, this is a vital resource.
As for Lowell, we will continue to focus on responsibility as well as performance. The crisis meant a move to homeworking, a remarkably smooth process under the circumstances, so what happens post-coronavirus? We believe in the office, but after this year we won’t be going back in the same way. After the pandemic, hybrid working is clearly the future, and we will do everything to support our colleagues in developing the skills to really embrace it.
The government has announced its roadmap to navigate out of this crisis, and with that comes optimism, though not certainty as yet. We can take real pride in how we have responded to this most challenging of years. We navigated it well and cemented our financial position. That will now provide a springboard for the future.
