RCS - Together Fin. Svc. - Q2 2022/23 (corrected)

AlphabetAnnouncement

24/02/2023 11:45

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230224:nRSX9184Qa&default-theme=true

RNS Number : 0054R  Together Financial Services Limited  24 February 2023

The following amendment has been made to the announcement released on 24(th)
February 07.00am under RNS No 9184Q.

 

Financial highlights: quarter ended December 31, 2023 changed to Financial
highlights: quarter ended December 31, 2022

 

All other details remain unchanged.

 

The full amended text is shown below.

 

Together Financial Services Limited

24 February 2023

Together Financial Services Limited

24(th) February 2023

Together Financial Services Limited ('Together' or 'the Group'), one of the
UK's leading non-bank relationship lenders, is pleased to announce its results
for the quarter ended December 31, 2022.

Commenting on today's results, Gerald Grimes, Group CEO Designate of Together,
said:

"Together delivered another robust performance in the period, against a
backdrop of extreme macroeconomic uncertainty, growing the loan book to
£5.9bn while controlling origination volumes, increasing rates and
maintaining prudent LTVs. The Group remained highly profitable and cash
generative, and the successful launch of our £467m FABS warehouse facility in
December added further strength and diversity to our funding.

 "We continued to deliver our strategic change agenda during the quarter,
making further incremental progress on delivering the right experience for our
customers and creating a more agile, efficient, and scalable platform. We also
rolled out new training programmes to support growth and performance for all
of our colleagues and made good progress against our sustainability targets
and measures.

"While inflation has started to show signs of trending lower and the pace of
interest rate rises has slowed, some economists are forecasting the UK economy
could enter recession during 2023, and this continued uncertainty may result
in increasing numbers of people looking to specialist lenders for support.
With a clear purpose, a proven and well-funded business model and a successful
multi-cycle track record, we believe Together is well placed to help many more
customers realise their ambitions."

Financial highlights: quarter ended December 31, 2022

·      Robust loan book growth at conservative LTVs with low arrears

-       Average monthly lending of £212.5m, up 6.3% on Q2'22
(£199.9m), down 26.5% on Q1'23 (£289.7m), reflecting a controlled approach
to originations

§ Conservative weighted average origination LTVs of 60.8% (Q2'22: 61.4%;
Q1'23: 62.0%)

-       Group net loan book increased to £5.9bn, up 33.3% on Q2'22
(£4.4bn) and up 3.6% on Q1'23 (£5.7bn)

§ Weighted average indexed LTV remains very low at 53.4% (Q2'22: 51.6%;
Q1'23: 51.9%)

§ Arrears profile remains benign, reflecting robust loan book quality

§ Impairment coverage increased slightly from previous quarter at 1.85%
(Q1'23: 1.63%) due to increased impairment provisioning resulting from future
macroeconomic uncertainty in forward-looking IFRS 9 modelling, however down
from prior year comparable quarter (Q2'22: 2.02%)

·      Resilient and sustainable financial performance

-       Interest receivable and similar income of £133.6m, up 40.2% on
Q2'22 (£95.3m) and up 12.3% on Q1'23 (£119.0m)

-       Underlying net interest margin of 4.8% (Q2'22: 5.8%; Q1'23:
4.9%), reflecting the continued impact of the extent and timing of rising
interest rates

-       Annualised cost of risk of 1.3% (Q2'22: 0.03%; Q1'23: 0.9%),
with change due to an increased impairment charge as a result of increased
IFRS 9 provisioning, due to greater macroeconomic uncertainty

-       Group remains highly profitable and cash generative

§ Underlying profit before tax of £25.8m, down 40.0% on Q2'22 (£43.0m) and
down 25.6% on Q1'23 (£34.7m) primarily due to higher impairment charges

§ Cash receipts of £559.9m (Q2'22: £507.4m; Q1'23: £541.8m) as redemptions
remain strong

                                                                                           Q2                          Q2       Q1
 Key metrics                                                                               2023                        2022     2023

 Interest receivable and similar income (£m)                                               133.6                       95.3     119.0
 Underlying interest cover ratio(( 1  (#_ftn1) ))                                          1.4:1                       2.4:1    1.7:1
 Interest cover ratio                                                                      1.3:1                       2.3:1    1.8:1
 Underlying net interest margin(( 2  (#_ftn2) )) (%)                                       4.8                         5.8      4.9
 Net interest margin (%)                                                                   4.8                         5.8      4.9
 Underlying cost-to-income ratio(1) (%)                                                    35.7                        31.9     32.3
 Cost-to-income ratio (%)                                                                  47.2                        36.5     28.0
 Underlying cost-to-asset ratio(1) (%)                                                     1.6                         1.8      1.6
 Cost-to-asset ratio (%)                                                                   2.2                         2.0      1.3
 Cost of risk (%)                                                                          1.3                         0.03     0.9
 Underlying profit before taxation(1) (£m)                                                 25.8                        43.0                34.7
 Profit before taxation (£m)                                                               17.8                        40.1                37.7
 Underlying EBITDA(1)                                                                      91.0                        76.5     88.3
 Loans and advances to customers(( 3  (#_ftn3) )) (£m)                                     5,891.9                     4,421.5          5,684.9
 Net debt gearing (%)                                                                      82.3                        76.9     81.2
 Shareholder funds(( 4  (#_ftn4) )) (()£m)                                                         1,046.0             984.4               1,093.6
 Underlying return on equity(1) (%)                                                        8.3                         15.6     11.1
 Return on equity (%)                                                                      5.8                         14.6     12.0

 

Operational highlights

·      Shaping our business for the future

-       Further enhanced customer experience, redesigning and
relaunching website, delivering digital portal into alpha testing and
improving document management, collections and call handling infrastructure

-       Progressed with embedding new 'ABS Suite' securitisation
platform and implementing agile change practices as we build an agile and
rapidly scalable platform

-       Continued to empower colleagues to grow and deliver value for
stakeholders, running a 'Learnfest' learning and development week and rolled
out new training programmes to support growth and performance for all of our
colleagues

·      Further strengthened and diversified funding to support growth
plans

-       Oct'22: S&P upgraded Together to 'BB' (previously 'BB-'),
citing our resilient earnings, capital buffers and asset quality. S&P also
upgraded Together's Senior Secured Notes to 'BB' (previously 'BB-') and
Bracken Midco1 PLC's PIK Toggle Note to 'BB-' (previously 'B+')

-       Dec'22: successful completion of £467m FABS warehouse facility
for first charge owner occupied and buy-to-let loans

-       31 Dec'22: £1.3bn facility headroom and £344.1m immediately
available liquidity

·      Continued progress against Sustainability targets

-       Our planet

§ Climate Risk Management Framework approved and Climate Working Group
established to progress ambitions to reduce emissions, consumption and become
Net Zero

§ Signed partnership with Inspired Energy to progress Net Zero ambitions,
including disclosure of Scope 3 emissions

-       Our customers

§ Maintained over 4 out of 5 star ratings on Feefo, Trustpilot and Google 5 
(#_ftn5) and received Platinum Trusted Service Award from Feefo for the third
year running

§ Achieved 'Crystal Mark' accreditation from Plain English for
post-completion correspondence and website content

-       Our colleagues

§ Signed Race at Work Charter, joined Business Disability Forum and Age
Inclusive Accredited by 55/Redefined

§ 30% women in senior management positions at Dec'22, up from 26% at Dec'21

-       Our communities

§ Approved plan to support charitable giving in excess of £1m per annum

§ We have now financed 341 social and affordable housing properties, securing
homes for 1,207 tenants including key workers, vulnerable women and the
elderly

Q2 2022/23 results presentation

Together will be presenting its Q2 2022/23 results via audio webcast today at
14:00 GMT (9:00 EST), for the quarter ended December 31, 2022.

 

The presentation for analysts and investors is expected to last for
approximately 30 minutes, followed by a Q&A.

 

The slides will be available on the Investor Relations website
(https://investors.togethermoney.com/ (https://investors.togethermoney.com/) )
ahead of the presentation.

 

The live audio webcast will be available via the following link:

https://
(https://www.investis-live.com/together/637231ab757dae0c007ad3fb/refss)
(https://www.investis-live.com/together/637231ab757dae0c007ad3fb/refss)
www.investis-live.com/together/63e51aacaaec340f00952cb6/efcsdc
(https://www.investis-live.com/together/637231ab757dae0c007ad3fb/refss)

 

It will also be accessible via a live conference call:

·      Access code: 792622

·      From the UK: +44 (0) 20 3936 2999/ 0800 640 6441

·      From outside the UK: +44 20 3936 2999

For further enquires please contact:

 Together
 Mike Davies, Director of Corporate Affairs  + 44 7753 138185

                                             mike.davies@togethermoney.com

 Camarco (Financial PR)

 Ben Woodford

                                             +44 2037818333

 Eddie Livingstone-Learmonth                 ben.woodford@camarco.co.uk (mailto:ben.woodford@camarco.co.uk)

                                             +44 2037574993

                                             Edward.Livingstone-Learmonth@camarco.co.uk
                                             (mailto:Edward.Livingstone-Learmonth@camarco.co.uk)

About Together

One of the UK's leading non-bank relationship lenders, Together has been
making finance work to help our customers realise their ambitions for nearly
50 years.

A strong, diverse and financially inclusive lender, we support a wide range of
underserved customers including the self-employed, those with more complex
incomes, in later life or with thin or impaired credit, landlords and SME and
business customers. We offer our customers a wide range of flexible lending
products including short-term finance, auction finance, residential,
buy-to-let and commercial mortgages, secured loans and development finance.

Our expertise in lending means we can look beyond mainstream lending criteria
to consider individual circumstances and treat each application on its own
merits to help our customers solve problems and realise opportunities.

Together is the trading name of Together Financial Services Limited, which has
its registered office address at Lake View, Lakeside, Cheadle, Cheshire SK8
3GW.

 

 

 1  (#_ftnref1) December 31, 2022 excluded a £8.4m one-off discretionary
bonus and a £0.4m release of costs accrued in a prior period relating to the
Group's strategic options review (Q2'22: £4.2m accrued share incentive scheme
costs and release of £1.3m customer redress provisions, whilst Q1'23 excluded
a £3.0m release of costs accrued in a prior period relating to the Group's
strategic options review).

 2  (#_ftnref2) There are no exceptional items impacting upon net interest
income recorded in the current or comparable prior periods.

 3  (#_ftnref3) Net loan book is the net of gross loans and advances to
customers and impairment allowances.

 4  (#_ftnref4) Includes subordinated shareholder loans of £32.5m (Q2'22:
£30.4m, Q1'23: £32.0m).

 

 5  (#_ftnref5) Based on 157 reviews collated by Feefo, Trustpilot and Google
Reviews during Q2'23

This information is provided by Reach, the non-regulatory press release distribution service of RNS, part of the London Stock Exchange. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

Reach is a non-regulatory news service. By using this service an issuer is confirming that the information contained within this announcement is of a non-regulatory nature. Reach announcements are identified with an orange label and the word “Reach” in the source column of the News Explorer pages of London Stock Exchange’s website so that they are distinguished from the RNS UK regulatory service. Other vendors subscribing for Reach press releases may use a different method to distinguish Reach announcements from UK regulatory news.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  NRATIMMTMTJTBIJ