LendInvest plc (AIM: LINV); which claims to be the UK’s leading platform for mortgages, is pleased to announce its audited results “for the year ended 31 March 2023.”
Rod Lockhart, Chief Executive of LendInvest, commented:
“I am pleased with the progress we have made over the past 12 months, despite a challenging market environment. We have continued to grow Platform Assets under Management, build new funding relationships, introduce new products and make significant advancements in technology. Our ability to adapt to changing market dynamics has been evident through our product offerings and pricing strategies. Additionally, we have also focused on reducing our credit risk profile and enhancing our capital efficiency. Whilst the economic backdrop remains uncertain, we remain confident in the resilience of our business model and funding strategy, the increasingly capital-efficient nature of our lending and the long-term opportunities for our disruptive, differentiated offering.”
As noted in the update:
- Platform Assets under Management (Platform AuM) (£m)1 2,587.0 2,146.1 21%
- Funds under management (FuM) (£m)1 3,605.9 2,936.6 23%
- Net operating income (£m) 54.7 50.5 8%
- Total operating expenses (£m) (40.4) (36.3) 11%
- Adjusted EBITDA (£m)1 14.3 20.3 (30)%
- Profit before tax (£m) 14.3 14.2 1%
- Profit after tax (£m) 11.4 10.9 5%
- Diluted earnings per share1 8.0p 8.0p –
- Full year dividend per share1 4.5p 4.4p 2%
1 Unaudited
Financial Highlights:
- Platform AuM increased by 21% to £2.6 billion (2022: £2.1 billion), driven by a 21% increase in Buy-to-Let (“BTL”) Platform AuM.
- FuM increased by 23% to £3.6 billion (2022: £2.9 billion).
- Net operating income increased by 8% to £54.7 million (2022: £50.5 million), reflecting the increase in Platform AuM with net interest income increased by 45% and net fee income reduced by 37%.
- Adjusted EBITDA decreased by 30% to £14.3 million (2022: £20.3 million) primarily driven by expected launch costs for the new residential mortgage product in addition to an increase in impairment charges to £5.9 million (2022: £4.4 million) which was largely in relation to two legacy defaulted loans.
- Profit before tax increased by 1% to £14.3 million (2022: £14.2 million).
Diluted earnings per share was stable at 8.0 pence per share (2022: 8.0 pence per share). - The Board is recommending a final dividend of 3.2p per share resulting in a full year dividend of 4.5p per share (2022: 4.4p per share).
- Effective interest rate accounting: behaviour patterns of borrowers on the reversion rate are reviewed regularly.
Strategic highlights:
Products
- In December 2022, LendInvest successfully launched our first residential mortgage product to underpin our future growth.
- LendInvest completed our first Residential Investment Portfolio Loan product, launched in partnership with a US-based asset manager.
- In October 2022, in response to the interest rate volatility following the mini-budget, LendInvest launched a new two year tracker product range.
Funding
Lloyds Bank, as “a new source of FuM, committed £300 million to support the growth of our BTL business and our entry into the residential mortgage market.”
LendInvest also “secured an upsized commitment from J.P. Morgan from £725 million to £1 billion and increased the investment period by three years.”
HSBC provided “up to £100 million in funding for our development finance program, supported by the British Business Bank’s ENABLE Guarantee scheme.”
LendInvest issued their third listed bond, “the LendInvest Secured Income II plc 6.50% bonds due 2027, raising £38 million.”
The firm reportedly completed their fourth securitisation, which “comprised £270 million of prime BTL mortgages with demand drawn from a broad range of institutional investors.
Post year end, we completed a new £500 million partnership with Chetwood Financial to fund residential mortgages.”
Strategic transactions
In line with their strategy to increase the proportion of their Platform AuM managed “for third parties they completed the sale of their residual economic interest” in:
- the Mortimer BTL 2020-1 securitization for £7 million in March 2023.
- the Mortimer BTL 2022-1 securitization for £5.8 million in August 2022.
ESG, people and culture
As previously announced, Michael Evans will “step down as CFO and as an Executive Director on 31 July 2023.”
David Broadbent joined the Company “on 9 May 2023 and will become our CFO on Michael’s departure in a non-board capacity, with the intention of joining the Board at a later date to be announced in due course.”
As mentioned in the announcement:
“Our business operations were declared carbon neutral by third party Climate Care Partners. We launched our first Green Bond Framework aligned with the ICMA green bond principles. We opened our second UK office in Glasgow, providing access to a pool of talent with great industry expertise. In November, we received the highest possible rating from ARC Ratings, highlighting our technology creates a seamless application process.”