CapitalRise has reported a strong financial performance, achieving growth across all aspects of its business, despite challenging market conditions that led the company to prioritize bridging finance in the first half of the year.
The prime property finance platform recorded a trading profit of £105,000 for the 12 months ending 31 July 2024.
As first reported by Alternative Credit Investor, this figure represents core earnings adjusted for non-trading items and impairments related to previously recognized profits. However, the company did not disclose its unadjusted core earnings for the period.
Business activity picked up from the first quarter of 2024, culminating in a record-breaking July, during which CapitalRise originated £50 million in new loans.
The property market has faced headwinds in recent years due to elevated interest rates, inflation, and slow economic growth.
Chief executive Uma Rajah explained that CapitalRise responded to these difficult conditions by shifting its focus to bridging finance, particularly as development loans became more challenging to facilitate.
During the first half of the year, bridging loans accounted for over 60% of the company’s lending activity.
Rajah said:
“In the latter half of the financial year, market conditions improved, and development loans made up two-thirds of our lending, bringing us closer to our usual balance.”
She added that the company was pleased with its ability to adapt to market shifts and sees bridging finance as a key component of its portfolio moving forward, particularly with the support of a newly secured dedicated facility.
Over the course of the year, CapitalRise distributed a record £72 million to investors in capital and returns.
Additionally, the firm secured £290 million in new institutional funding, including a £250 million facility obtained from an undisclosed partner in January 2024.
Finance director Stuart Peel told Alternative Credit Investor:
“We currently have £300 million in institutional capital available for deployment, in addition to what’s already on our platform. Right now, the main focus is putting that capital to work.”
Looking ahead, Rajah expressed confidence in the market’s prospects.
She stated:
“As we transition into a period of declining interest rates, we anticipate this trend will persist. Lower borrowing costs and reduced inflation should improve the feasibility of development projects.”