REG - Distribution Finance - Trading Update

Distribution Finance Capital HoldingsAnnouncement

06/12/2024 07:00

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RNS Number : 0288P  Distribution Finance Cap. Hldgs PLC  06 December 2024

This announcement contains inside information as stipulated under the UK
version of the Market Abuse Regulation (EU no. 596/2014) as it forms part of
UK law by virtue of the European Union (Withdrawal) Act 2018 (as amended from
time to time).

 

6 December 2024

 

Distribution Finance Capital Holdings plc

("DF Capital" or the "Company" together with its subsidiaries the "Group")

 

 

Trading Update

Full year results expected to be significantly ahead of market expectations

 

Distribution Finance Capital Holdings plc, a specialist bank providing working
capital solutions to dealers and manufacturers across the UK, is pleased to
provide a trading update for the 12 months ending 31 December 2024.

Trading Update

Loan origination continues to perform in line with expectations and as a
result its loan book will end the year in the range of £650-700m.The Group's
net interest margin ('NIM') continues to perform ahead of expectations, with
operating costs being well managed and cost of risk running well below the
Group's target of 1%. Accordingly, the Group expects its full year underlying
pre-tax profit (excluding recoveries and write-backs relating to RoyaleLife)
to be significantly ahead of market expectations at not less than £14m, more
than a threefold increase on its FY23 outturn (FY23: £4.6m).

Additionally, the Group is pleased to confirm that it has updated its expected
credit loss provision relating to RoyaleLife, having now successfully secured
the previously reported £3m settlement against property that is currently
pending sale and is subject to a new counterparty loan. This settlement was
originally expected to be recognised in FY25. Accordingly, the Group will
write-back a further £3.0m of credit loss provisions bringing the total
recovery relating to RoyaleLife for FY24 to £4.7m. As a result, total pre-tax
profit for the 12 months ending 31 December 2024 is expected to be
significantly ahead of market expectations at not less than £18.7m, more than
a fourfold increase on its FY23 outturn.

The Group continues to make good progress in the build of its asset
finance/hire purchase lending capability, having now fully completed its
application to the Financial Conduct Authority for consumer lending
permission. The launch of this product, which remains on track for H1 2025, is
expected to result in a significant expansion of our market opportunity with
the addressable market for asset finance being several times larger than the
Group's existing core lending product. This product will be distributed
through the Group's existing dealer and manufacturer customers to end-user
obligors. The Group will provide a further update on progress in due course.

The Company expects to announce its full year trading update in mid-January
2025.

Carl D'Ammassa, Chief Executive, commented: "2024 marks another year of strong
delivery and execution against our business plan. The Group remains well
positioned in its strategy to become a multi-product lender and we remain
excited by the level of interest in our asset finance product ahead of its
expected launch in the first half of 2025."

 

The person responsible for arranging the release of this announcement on
behalf of the Company is Karen D'Souza (Company Secretary).

 

 

For further information contact:

 Distribution Finance Capital Holdings plc
 Carl D'Ammassa - Chief Executive Officer                                  +44 (0) 161 413 3391
 Kam Bansil - Head of Investor Relations                                   +44 (0) 7779 229508
 http://www.dfcapital-investors.com (http://www.dfcapital-investors.com/)

 Panmure Liberum Limited (Nomad and Broker)                                 +44 (0) 203 100 2000
 Chris Clarke
 William King
 Anake Singh

 Alma Strategic Communications                                             +44 (0) 203 405 0235
 Josh Royston
 Hilary Buchanan
 Kieran Breheny

 

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