REG - Distribution Finance - Half-year Report
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RNS Number : 8640Y Distribution Finance Cap. Hldgs PLC 11 September 2025
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).
11 September 2025
Distribution Finance Capital Holdings plc
("DF Capital" or the "Company" together with its subsidiaries the "Group")
Results for the six months ended 30 June 2025
Significant growth and momentum
Full year profit expected to materially exceed current market guidance
Distribution Finance Capital Holdings plc, the specialist bank providing
working capital solutions to dealers and manufacturers across the UK, today
announces its results for the six months ended 30 June 2025.
· Delivered £9.0m of profit before tax, up c.20% on the comparable period (30
June 2024: adjusted PBT £7.5m).
· Record new lending, up c.17% to £828m (30 June 2024: £710m); supported by
£1.4bn of facilities (30 June 2024: £1.1bn) and 1,491 dealers (30 June 2024:
1,250).
· Loan book reached £728m, (30 June 2024: £603 million; 31 December 2024:
£666 million), up c.21% on prior year.
· Net interest margin (NIM) remained strong at 7.9% (30 June 2024: 7.8%),
continuing to significantly exceed our previously communicated minimum 6%
target.
· Strong arrears management resulted in low cost of risk at 0.63% (30 June 2024:
0.61% Adjusted Cost of Risk), demonstrated by arrears balances (1 day+ past
due and including legal recoveries) remaining low at 0.9% of total loan book.
· Continued cost efficiency and management, despite significant investment in
asset finance, with improved cost-to-income ratio of 57% (30 June 2024: 59%).
· Retail deposits total £688m (30 June 2024: £579 million) from approximately
15,500 accounts.
· Adjusted EPS increased to 3.8p (30 June 2024: 3.0p Adjusted EPS).
· Adjusted Tangible Net Asset Value (TNAV) per share ended the period at 70.2p
(30 June 2024: 59.6p).
Post period end highlights and outlook
· Successful consumer lending authorisation and subsequent launch of asset
finance proposition to the market with more than 75 dealers onboarded and
first loans made.
· Loan book expectations unchanged with FY25 closing position expected to be
between £750m and £800m.
· c£950m lending capacity based on existing capital and latent headroom within
the BBB ENABLE Guarantee facility and Tier 2 facility, with a clear runway to
£1.3bn loan book without the requirement for additional Tier 1 equity raise.
· The Group is now guiding for medium term NIM in the core inventory lending
product of c7% over the medium term (previously 6%).
· As a result of our strong performance, particularly in net interest margin, we
expect full year profit to materially exceed current market expectations with
an improvement in market expectations for FY26 also anticipated.
30 June 2025 30 June 2024 31 December 2024
6-month 6-month 12-month
Financial Highlights
Gross revenues (£m)(1) 43.3 37.9 76.8
Adjusted profit before taxation (£m) (2) 9.0 7.5 14.4
Adjusted profit after taxation (£m) (3) 6.6 5.4 10.5
Gross loan book (£m) (4) 728 603 666
Net assets (£m) (5) 117.6 107.6 115.4
Customer deposits (£m) 688 579 650
Regulatory capital (£m)(6) 112 100 109
Common Equity Tier 1 capital ratio(7) 19.7% 23.2% 21.6%
Regulatory capital (as a % of RWA) (8) 21.7% 25.9% 23.8%
Gross yield(9) 12.2% 12.1% 12.2%
Net interest margin(10) 7.9% 7.8% 7.9%
Average customer rate for retail deposits(11) 4.80% 5.10% 5.16%
Adjusted cost of risk(12) 0.63% 0.61% 0.75%
Impairment loss coverage on loans to customers(13) 1.06% 1.32% 0.98%
Cost to income ratio(14) 57% 59% 59%
Adjusted basic earnings per share (pence) (15) 3.8 3.0 5.9
Adjusted tangible net assets per share(16) 70.2 59.6 63.8
Loans advanced to customers (£m) 828 710 1,440
Number of dealer customers(17) 1,491 1,250 1,334
Number of manufacturer partners(18) 97 90 88
Total credit available to dealers (£m)(19) 1,390 1,088 1,142
Carl D'Ammassa, Chief Executive Officer, commented: "The Group has made great
progress in achieving our strategic ambitions and enjoyed another period of
growth which underpins the significant increase in overall profitability. We
continue to scale the bank efficiently and the launch of our asset finance
product will significantly expand our addressable market opportunity whilst
also deepening our relationships with manufacturer and dealer customers in the
sectors we currently serve. With this fuller suite of products and services,
DF Capital has an abundance of opportunities to grow lending. The foundations
are now in place upon which we can build our medium-term growth plans."
"Given the progress during the period, we expect full year results to be
materially ahead of current market expectations, supporting the pace of our
journey to deliver on the medium-term targets we laid out at the start of the
year including ending FY28 with a loan book of c£1.3bn and a mid-teens return
on equity."
An overview video of the results by CEO Carl D'Ammassa is available to watch
here: https://bit.ly/DF_Capital_HY2025_Overview
(https://bit.ly/DF_Capital_HY2025_Overview) and on the Company's
website: https://www.dfcapital-investors.com/
(https://url.uk.m.mimecastprotect.com/s/nfoaCjYlEsnokzKiRhZtm4Txo?domain=dfcapital-investors.com/)
Analyst presentation
The Company will host an analyst webinar at 9am today relating to the results.
Analysts wishing to join can register by emailing dfcapital@almastrategic.com
(mailto:dfcapital@almastrategic.com)
Investor presentation
The Company will also provide a presentation to existing and potential
shareholders via the Investor Meet Company platform at 12:30pm today.
Investors can register for the webinar
here: https://www.investormeetcompany.com/distribution-finance-capital-holdings-plc/register-investor
(https://url.uk.m.mimecastprotect.com/s/KPupCk2mGCO2ZD8cQirtGgE4t?domain=investormeetcompany.com)
. A recording of the presentation will be made available on the Company's
website following the conclusion of the investor presentation.
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
Gaya Bhatt
Alma Strategic Communications +44 (0) 203 405 0235
Josh Royston
Hilary Buchanan
Hannah Campbell
Sarah Peters
About DF Capital
DF Capital is a speciality lender providing flexible financing solutions that
support the sales and growth of manufacturers, dealers and distributors
operating in attractive underserved retail markets across the UK. As a bank,
DF Capital's lending is underpinned by its award-winning savings products,
straightforward digital platform, and exceptional customer service.
Chief Executive's Statement
Further strategic progress, unlocking growth and enhancing shareholder value
DF Capital operates in attractive, specialised lending niches supporting the
growth of manufacturers, dealers and distributors operating predominantly in
the UK. We support them with their working capital needs, provide tailored
bespoke lending products to help them grow and, now having launched our asset
finance lending proposition, we also help them sell more of their products and
services to their customers directly.
It is this commitment to the sectors and markets in which we operate that
draws a significant distinction to other banks and lenders. We are experts in
what we do and deploy this experience, together with our unique digital-first,
yet human touch operation, to enable the growth ambitions of our customers.
Our lending is enabled by an award-winning deposit raising capability.
We believe our approach creates a competitive advantage and accordingly I'm
delighted to report another period of continued strong strategic and financial
momentum, delivering pre-tax profit of £9.0m for the first half of 2025
(adjusted PBT(a): 30 June 2024: £7.5m) up c.20% on prior year.
The Group's adjusted basic Earnings Per Share (EPS)(a) and adjusted Tangible
Net Asset Value (TNAV) per share(a) ended the period at 3.8p and 70.2p
respectively (30 June 2024: 3.0p and 59.6p respectively), reinforcing our
commitment to delivering sustainable shareholder returns and enhancing
shareholder value.
As you will read in this report, we are pleased with the performance of the
Group in the first half, and as a result we expect to materially exceed
current market expectations for the current year, supporting the pace of our
journey to deliver a mid-to-high teens return on capital over the medium term.
Disciplined approach to growth continues to underpin strong financial returns
It is now five years since our full authorisation as a bank; in that time, the
Company has seen a material increase in its loan book, supported by its retail
savings arm. Looking forward, it is this scaling of lending as a multi-product
lender that underpins our franchise and overall profit generation. We've
launched more products and services during the period, bringing these to life
through a frictionless service underpinned by a human touch when our customers
need us.
With an expanded suite of products and services, DF Capital has an abundance
of opportunities to grow lending. The foundations are now in place to deliver
on the medium term (FY28) targets we laid out at the start of the year and
which are re-iterated in the outlook section.
Our growth so far has been, and will continue to be, characterised by a strong
yet disciplined approach, successfully navigating macroeconomic volatility,
geopolitical uncertainty, and evolving regulatory requirements.
New loan originations reached a record £828 million in H1 2025, an increase
of £118 million compared to the prior period (30 June 2024: £710 million).
This drove a substantial increase in the loan book to £728 million (30 June
2024: £603 million; 31 December 2024: £666 million), up c.21% on the prior
year. Growth was particularly strong in sectors where the Group maintains a
competitive advantage, as we remained focused on gaining market share in
resilient, well-understood verticals.
Gross revenues(a), which predominantly consist of net interest income,
increased by c.14% to £43.3m (30 June 2024: £37.9m). Despite two Bank of
England base rate cuts in the period, net interest margin ("NIM") remained
robust at 7.9% (30 June 2024: 7.8%), continuing to significantly exceed our
previously communicated minimum 6% target. Effective pricing disciplines and
prudency in managing our funding cost should allow us to outperform on this
important performance indicator over the next 18-24 months; we now expect net
interest margin to ultimately settle at c.7% in our core inventory finance
lending product.
(a)Gross revenues, adjusted profit before tax, adjusted Basic Earnings Per
Share, and adjusted Tangible Net Asset Value per share are Alternative
Performance Measures ("APMs") as defined in the APM section.
As at 30 June 2025, DF Capital supported 97 manufacturer partners (30 June
2024: 90; 31 December 2024: 88) and 1,491 dealers (30 June 2024: 1,250; 31
December 2024: 1,334), reflecting our commitment to deepening existing dealer
relationships while actively onboarding new customers, and providing a
valuable base to support the Group's multi-product strategy. Aggregate dealer
loan facilities reached £1.4 billion at the end of the period, up c.28%
year-on-year (30 June 2024: £1.1 billion) and c.22% higher than at year-end
(31 December 2024: £1.1 billion). Looking forward, we expect the pace of
dealer network expansion to moderate as we continue to prioritise credit
quality and scalability of relationships over the medium term.
This strong financial and operational performance, underpinned by resilient
credit quality and a growing, diversified customer base, reinforces the
Board's confidence in our strategy. Our offering continues to resonate with
customers, enabling us to scale efficiently and sustainably.
Market landscape and sector outlook
We continue to demonstrate strength in our core inventory finance markets,
having a well-diversified portfolio across a broad range of end-user markets.
Despite ongoing macroeconomic and geopolitical uncertainty, we are well placed
to report strong loan book growth.
We are mindful of growing caution among some customers as they navigate
potential business headwinds-including the impact of fiscal policy changes
such as anticipated business rates increases, higher employer national
insurance contributions, and the likelihood of persistently elevated interest
rates in the near term. Notwithstanding this, we've seen particularly strong
momentum in key verticals including motorhomes and caravans, marine,
motorcycles, and specialist automotive. Despite sector-specific challenges,
our growth in these areas has been significant, highlighting the strength of
our proposition and the depth of our dealer and manufacturer relationships.
( )
The following table analyses the portfolio at the reporting date by principal
outstanding:
30 June 2025 30 June 2024 31 December 2024
£million % £million % £million %
Leisure:
Lodges and holiday homes 80.5 11.1% 117.8 19.5% 90.8 13.6%
Motorhomes and caravans 219.4 30.1% 163.4 27.1% 207.5 31.2%
Marine 83.9 11.5% 62.8 10.4% 71.9 10.8%
Motorsport 39.6 5.4% 33.6 5.6% 35.0 5.3%
Automotive 38.8 5.3% 21.6 3.6% 31.2 4.7%
462.2 63.5% 399.2 66.2% 436.4 65.5%
Commercial:
Transport 110.1 15.1% 104.3 17.3% 93.0 14.0%
Industrial equipment 40.5 5.6% 32.8 5.4% 32.9 4.9%
Agricultural equipment 20.4 2.8% 26.2 4.3% 24.4 3.7%
Other serialised assets 4.5 0.6% 3.5 0.6% 4.5 0.7%
175.5 24.1% 166.8 27.7% 154.8 23.3%
Wholesale and receivables funding 84.4 11.6% 6.1% 74.8 11.2%
36.6
Asset Finance 6.0 0.8% - 0.0% - 0.0%
Total loan book principal(b) 728.1 100% 602.6 100% 666.0 100%
(b) Principal balance outstanding at the reporting date for loans and advances
to customers.
In the motorhome & caravan sector, industry statistics suggest we are the
market leader, taking share from competitors. End user demand generally
across this sector remains high.
Whilst there has been stronger demand for both motorhomes and caravans since
Easter, overall retail sales for touring caravans (tourers) remains down
year-on-year. In response, most manufacturers have produced less tourers,
resulting in less unsold stock at the forecourts. In contrast motorhomes
continue to track in line with the previous year after several years of
double-digit growth.
Holiday home & lodge sales have continued with a more subdued trend,
though there is evidence of increased activity in recent months, with sales
increasing and parks starting to order more replacement stock. This market
continues to adjust following the failure of Royale Park Home Estates and
associated companies. Manufacturers, who have been on reduced hours for an
extended period, are starting to increase production.
The marine sector is showing continued signs of renewed momentum. Demand for
higher-value boats remains strong, with steady sales recovery in the leisure
and luxury segments. While this doesn't yet represent growth across all
categories, it's a clear indicator that confidence is returning among
well-capitalised buyers, which is fuelling confidence and growing optimism
amongst manufacturers and distributors.
The high-end automotive sector has continued to perform strongly, driven by
resilient demand from affluent buyers and limited production volumes. Despite
broader economic uncertainty and tighter credit conditions, the sector has
maintained robust order books and healthy margins, particularly in the
performance, electric, and SUV segments.
The plant and machinery segment of the industrial sector has shown steady
growth through the year, supported by strong infrastructure investment,
ongoing manufacturing modernisation, and the global shift toward cleaner
energy. Demand remains high for both new and used equipment, with
inventory-backed lending enabling dealers to maintain stock and meet market
needs.
The agricultural sector continues to experience the effects of weather
extremes, from last year's prolonged rainfall to this year's dry spring. These
shifting conditions have disrupted traditional buying cycles. Machinery sales
remain under pressure as farmers adjust their spending amid cost volatility,
fluctuating crop values, and weather uncertainty. Despite these headwinds,
we've seen the emergence of green shoots of recovery. Stabilising inflation
and reducing interest rates should help support confidence.
Our diversification across these sectors as well as the intimacy in our
customer relationships, allow us to successfully navigate market challenges
and opportunities, whilst expanding our funding solutions to support their
needs through unpredictable times, allowing them to capitalise on
opportunities presented to them and, in turn, support their growth.
Looking forward, we believe the relentless focus on supporting existing
manufacturer, dealer and distributor relationships, whilst at the same time
diversifying into new markets, will provide further downside protection should
certain markets deteriorate. Our recent entry into the renewables asset class,
specifically solar panels and batteries, is a great example of how we continue
to innovate and develop our product offering to support new and existing
customers through our asset-based lending expertise.
Over and above this, we have also continued to leverage existing relationships
and grow our Euro-zone lending, through the Group's subsidiary DF Capital
Financial Solutions Limited, to support selective dealers in Republic of
Ireland and Netherlands. At the period end, we had a total book value of £23m
across this customer cohort. Operations for this business line sit entirely in
the UK and the Group has no current plans to expand into Europe in any
meaningful way. However, developing our capability in this region and being
able to selectively support our existing dealer and manufacturer base has
allowed us to deepen those relationships and build our knowledge and
experience of operating on a multi-currency basis.
Tailored solutions that deepen relationships and grow markets
The Group has capitalised on opportunities to support existing customers,
partners or known sector participants with tailored lending solutions that
deepen our relationship and support the growth and vitality of the markets in
which we operate. Drawing on the extensive experience and expertise we have
across the Group, we have provided solutions that allow customers to acquire
businesses or new locations; unlock further working capital to support growth;
enable dealer and manufacturer sales by providing wholesale funding to other
non-bank lenders; as well as freeing up distributor working capital via
receivables financing. These unique opportunities are tailored to an
individual customer or partner's need and offer us attractive risk-adjusted
returns whilst fundamentally supporting growth in the markets in which we
operate.
Whilst always expected to be relatively small, and not representing more than
15% of our entire lending balance, we have successfully grown lending in this
area to £84.4 in H1 2025 (30 June 2024: £36.6m, 31 December 2024: £74.8m).
Asset Finance unlocks significant future growth opportunity
Unlocking the opportunity to provide loans "beyond the forecourt" has been a
long held strategic imperative for the Group. I am delighted that, following
receipt of regulatory approvals in February 2025 and a period of organic
product development, we have onboarded over 50 dealers and lending has
commenced. This is a natural extension to our existing manufacturer and dealer
relationships, allows us to fund the retail sales of our dealer customers and
should unlock sales growth for them. Hire purchase and leasing, commonly known
as asset finance, are typical lending products required by end-users to
purchase our dealer's products and is in high demand by them.
Our newly launched platform is fully digital, designed for straight-through
processing while still allowing for personalised, "human touch" engagement
when needed. Purpose-built for scalability, with no legacy system constraints
and full compliance with evolving regulatory and legal frameworks, our
proposition and how we will go to market represents a clear point of
differentiation from our competitors.
With an estimated addressable market within our existing dealer network of
£10 billion per annum, the Group sees significant headroom for growth in this
segment. Initial focus will be in the leisure sector, where the Group already
carries a significant presence, with gradual expansion into other sectors.
Retail savings and funding strategy supports our growth ambitions
As at 30 June 2025, total deposits stood at £688 million (30 June 2024: £579
million, 31 December 2024: £650m), across approximately 15,500 accounts (30
June 2024: c.14,600 accounts, December 2024: c15,600).
Our retail savings franchise remains a core strength of the Group and is
fundamental to our funding strategy, enabling the continued growth and
diversification of our balance sheet.
We remain visible and accessible to savers by featuring on "Best Buy" tables,
supported by a super-fast application journey-enabling customers to open an
account in minutes, with a dedicated sort code and account number issued
immediately upon approval. Our efforts have been recognised with multiple
Feefo Platinum Trusted Service Awards (2024 and 2025), and we continue to
achieve high customer satisfaction ratings for the quality and consistency of
our service.
Widening the jaws between income generation and cost
Operationally, we remain focused on growing into our well-established cost
base and operating model, maximising the benefits of our modern efficient
digital banking platform. We are committed, in all of our lending products, to
deliver a seamless and efficient service to customers, backed up by quality
human interaction and relationship management where needed. Whilst total costs
increased due to continued investment in our recently launched asset finance
proposition and general inflationary pressures, cost discipline has been well
maintained. Over time, we expect further operational leverage, enabling
continued growth and a widening of the jaws between cost and income. Much of
the cost relating to asset finance has been made in advance of revenues and
loan book growth.
The Group's headcount reached 153 employees at the period end (30 June 2024:
132 employees) with total operating expenses for the half year of £15.1m (30
June 2024: £13.2m). The cost to income ratio stood at 57% (30 June 2024:
59%), in line with expectations.
Strong credit risk performance
Despite a persistently challenging macroeconomic backdrop and elevated
interest rates, the Group's credit performance has remained exceptionally
strong. This resilience reflects the high quality of our customer base and the
effectiveness of our disciplined credit risk and portfolio management
strategies.
The number of dealers in arrears continued at an extraordinarily low level,
closing the period at 38 (30 June 2024: 20), representing just 2.5% of the
total dealer base. In line with our prudent risk framework, we classify any
account with payments one day or more overdue, as in arrears. As at 30 June
2025, 30 of these cases were in legal recovery, with appropriate credit loss
provisions recognised based on expected recoveries. The Group's total arrears
balance accounted for 0.9% of the loan book (30 June 2024: 0.5%).
The cost of risk for the period was 0.63%, demonstrating a consistent
performance year over year once adjusting for the £1.7m RoyaleLife recovery
in 2024 (30 June 2024: 0.61% adjusted Cost of Risk(c)). The strength of
performance in this area reflects our proactive approach to credit risk
management and our ability to mitigate dealer defaults through redistribution
of products within our existing customer network or, where necessary, by the
sale of secured assets to third parties.
30 June 2025 30 June 2024 31 December 2024
£'000 £'000 £'000
Arrears - principal repayment, fees and interest:
1 - 30 days past due 285 427 271
31 - 60 days past due 130 576 1,146
61 - 90 days past due 944 474 199
91 + days past due 5,516 1,519 2,646
6,875 2,992 4,262
Total % of loan book 0.9% 0.5% 0.6%
Associated principal balance:
1 - 30 days past due 1,056 2,587 1,305
31 - 60 days past due 377 1,200 2,623
61 - 90 days past due 4,144 439 449
91 + days past due 7,950 2,294 3,912
13,527 6,520 8,289
Total % of loan book 1.8% 1.1% 1.2%
Portfolio ageing
We use average outstanding loan tenor as the most appropriate stock days
measure to determine how our portfolio is ageing compared to our historical
experience and our sector tolerance levels used for portfolio oversight. We
have now seen a normalisation of seasonality trends, where typically there are
high levels of repayments over the spring/summer "selling" season and reduced
repayments during the autumn/winter "re-stocking" season.
Average stock days, which measure the average age of loans outstanding, have
reduced to 128 days (31 December 2024: 145 days; 30 June 2024: 149 days),
supporting our view of strong demand for dealer product on the forecourt. This
provides a positive signal for any future credit issues.
All sectors of the portfolio operate well within our tolerances.
Strong underlying security position
In our core inventory finance lending product, we take legal title against
individual assets to provide working capital to fund dealers' inventory or
stock. The Group's lending relative to its security position continues to
remain strong with a Loan to Wholesale Value ('LTV') of 86% (30 June 2024:
83%). We do not advance funds measured against retail prices, which typically
represent a mark-up of approximately 20% on the wholesale invoice price.
Accordingly, for the Group to incur losses on recovery of an asset in the
event of default there would need to be an average reduction of approximately
30% in retail prices across the sectors and products we lend against.
( )
(c)Adjusted Cost of Risk is an Alternative Performance Measures ("APMs") as
defined in the APM section.
Successful Share-Buy Back Programme
During the period, the Bank successfully executed a share buy-back programme,
reflecting the Board's confidence in the Group's financial strength, long-term
strategy, and the intrinsic value of its shares. A total of 12,966,866 of
ordinary shares were repurchased representing 7% of the share capital prior to
the commencement of the share buyback.
Growth ambitions underpinned by a well-capitalised balance sheet
Whilst capital is not a current constraint to lending, with existing capital
headroom, organic capital generation through good levels of profitability and
Tier 2 capital facility to draw down, we will continue to diligently and
ruthlessly ensure our capital is put to work where we can achieve the best
risk-adjusted returns. Across all capital instruments, the Group has current
capacity to grow lending to c£950m, generating further Tier 1 capital with
forward retained earnings.
As at 30 June 2025, the Bank's equity stood at £117.6m (30 June 2024:
£107.6m). Regulatory capital, which is the Common Equity Tier 1 capital
together with Tier 2 capital, increased to £111.9m (30 June 2024: £100.2m).
This includes £10m drawn in 2023 under the £20m Tier 2 capital facility with
British Business Investments.
Our participation in the British Business Bank's ENABLE Guarantee scheme,
which was entered in 2023, currently stands at £350m. The Group's CET1 ratio
ended the period at 19.7% (30 June 2024: 23.2%), well above our regulatory
minimum. Our total Regulatory Capital (Common Equity Tier 1 Capital + Tier 2
Capital) as a % of risk weighted assets ("RWAs") ended the period at 21.7%,
also well in excess of our regulatory minimum.
Outlook
We are at an exciting point in the Group's strategic journey, having more
opportunities to support the needs of our customers than ever before. We
continue to see potential in our core inventory finance to either grow market
share with existing relationships or enter new sectors where serialised assets
are held as stock.
Asset finance presents a material opportunity for further growth; the market
is much larger than our core inventory finance product, with longer lending
tenors that scale our loan book relatively quickly. We have crafted a
proposition that is different to incumbents and expect demand for this will
grow over time.
Whilst these two lending channels will substantively represent our loan book
over the medium term, our growth plan is ably complemented by tailored lending
solutions that help grow our markets, unlocking the ambitions of sector
participants through our lending expertise. These significant growth
opportunities, our financial performance to date, and our more favourable view
of net interest margin, underpins our confidence for the year, with the Board
now expecting performance to materially exceed market expectations for the
full year. We also remain firmly on track to hit our medium-term financial
goals of:
● Target loan book of c.£1.3bn by the end of FY28
● Continuation of strong NIM over the medium term; we have revised our guidance
of NIM over the medium term to c7% in the core inventory finance product
versus 6% previously
● Continued cost efficiency with scale, achieving <50% cost to income ratio
by FY28
● Progression of return on equity with a mid-teens target for FY28
● No further Tier 1 equity capital required to deliver these medium-term
financial targets
Whilst always cautious and vigilant about the uncertainties presented by the
macroeconomic and political environment, I'm excited about our future plans.
Carl D'Ammassa
Chief Executive Officer
Financial Highlights and Key Performance Indicators
Summarised Statement of Comprehensive Income
30 June 2025 30 June 2024 31 December 2024
6-month 6-month 12-month
£'000 £'000 £'000
Gross revenues(1) 43,254 37,889 76,805
Interest expense (16,942) (15,383) (31,208)
Net income 26,312 22,506 45,597
Other operating expenses (15,087) (13,226) (26,764)
Impairment charges (2,187) (106) 241
Profit before taxation 9,038 9,174 19,074
Taxation (2,432) (2,443) (5,053)
Profit after taxation 6,606 6,731 14,021
Other comprehensive income/(loss) - 74 75
Total comprehensive income for the period 6,606 6,805 14,096
Basic earnings per share (pence) 3.7p 3.8p 7.8p
(1) Sum of interest and similar income, fee income less fee expenses, net
gains/(losses) from derivatives measured at fair value through profit or loss
and other operating income
Summarised Statement of Financial Position
30 June 2025 30 June 2024 31 December 2024
£'000 £'000 £'000
Cash and balances at central banks 84,856 86,036 110,030
Loans and advances to banks 11,599 3,496 3,771
Investment securities - 6,175 769
Loans and advances to customers 722,031 596,771 660,772
Taxation asset 2,110 5,265 3,980
Other assets 11,388 8,462 7,218
Total assets 831,984 706,205 786,540
Customer deposits 688,128 579,012 649,665
Financial liabilities 2,643 1,127 90
Subordinated liabilities 10,234 10,225 10,230
Taxation liabilities 189 670 1,259
Other liabilities 13,165 7,598 9,942
Total liabilities 714,359 598,632 671,186
Total equity 117,625 107,573 115,354
Adjusted tangible net asset value per share (pence) 70.2p 59.6p 63.8p
30 June 2025 30 June 2024 31 December 2024
6-month 6-month 12-month
Financial Highlights
Gross revenues (£m) (1) 43.3 37.9 76.8
Adjusted profit before taxation (£m) (2) 9.0 7.5 14.4
Adjusted profit after taxation (£m) (3) 6.6 5.4 10.5
Gross loan book (£m) (4) 728 603 666
Net assets (£m) (5) 117.6 107.6 115.4
Customer deposits (£m) 688 579 650
Regulatory capital (£m) (6) 112 100 109
Common Equity Tier 1 capital ratio(7) 19.7% 23.2% 21.6%
Regulatory capital (as a % of RWA) (8) 21.7% 25.9% 23.8%
Gross yield(9) 12.2% 12.1% 12.2%
Net interest margin(10) 7.9% 7.8% 7.9%
Average customer rate for retail deposits(11) 4.80% 5.10% 5.16%
Adjusted cost of risk(12) 0.63% 0.61% 0.75%
Impairment loss coverage on loans to customers(13) 1.06% 1.32% 0.98%
Cost to income ratio(14) 57% 59% 59%
Adjusted basic earnings per share (pence) (15) 3.8 3.0 5.9
Adjusted tangible net assets per share(16) 70.2 59.6 63.8
Key Performance Indicators
Loans advanced to customers (£m) 828 710 1,440
Number of dealer customers(17) 1,491 1,250 1,334
Number of manufacturer partners(18) 97 90 88
Total credit available to dealers (£m)(19) 1,390 1,088 1,142
(1) Sum of interest and similar income, fee income less fee expenses, net
gains/(losses) from derivatives measured at fair value through profit or loss
and other operating income
(2) Profit before tax adjusted for the RoyaleLife write-back in 2024. No
adjustment was required for 2025.
(3) Profit after tax adjusted for the RoyaleLife write-back in 2024. No
adjustment was required for 2025.
(4) Principal balance outstanding for loans and advances to customers
(5) The equity held in the Group
(6) Regulatory capital is the Common Equity Tier 1 capital (which includes
current year profit) together with Tier 2 capital
(7) Common Equity Tier 1 capital (which includes current year profit) divided
by Risk Weighted Assets
(8) Regulatory capital divided by Risk Weighted Assets
(9) The effective interest rate we charge our customers comprising interest
income including fees
(10) Total operating income adding back fee expense as a % of average gross
receivables
(11) The weighted average interest rate we pay our depositors
(12) Impairment charges and recoveries and provisions in the period
(annualised) as a % of average gross receivables. 2024 periods have been
adjusted for the RoyaleLife write-back. No adjustment was required for 2025.
(13) Impairment allowance as a % of gross receivables at the period end
(14) Operating cost as a % of total operating income
(15) Adjusted profit after tax divided by the weighted average number of
shares in issue excluding treasury shares
(16) Net assets less intangible assets divided by the weighted average number
of shares in issue excluding treasury shares. No adjustment was required for
2024.
(17) Number of borrower relationships
(18) Number of vendors and manufacturers with whom we have programs that
support our lending
(19) Amount of credit available to our customers to draw (uncommitted)
including existing drawings
Alternative Performance Measures
Certain financial measures disclosed in the Interim Financial Report do not
have a standardised meaning prescribed by International Financial Reporting
Standards (IFRS) and may therefore not be comparable to similar measures
presented by other issuers. Gross revenues and net interest margin are deemed
to be Alternative Performance Measures ("APMs") and are defined in the
Appendix.
APMs may be considered in addition to, but not as a substitute for, the
reported IFRS results. The Group believes that these APMs together with the
other metrics presented above, when considered together with reported IFRS
results, provide stakeholders with additional information to better understand
the Group's financial performance.
Based on the Group's strategy and business model, there are six principal risk
categories used to help shape our policy and control framework. This
categorisation creates structure for the risk policy framework and clear
ownership/responsibility for assessing risk performance.
There are certain risk themes that run across many or all of these risk types.
We have chosen at this stage to not pull them out individually, but instead to
manage them across the principal risks framework. A good example of this are
the risks created by climate change. Whilst these risks may crystallise in
full over longer-time horizons, they are already becoming apparent in our
business operations and cut across more than one of the principal risk
categories below.
Principal Risks
Principal Risks
Operational risk Operational risk is defined as the risk of loss resulting from inadequate or Key risk mitigation tools: operational risk policies, standard operating
failed internal processes, people and systems, or from external events. We procedures, Risk and Control Self Assessments ("RCSAs"), risk event analysis,
have a framework in place which sets out our approach to Operational Risk, key controls testing, ongoing monitoring of risk metrics and limits, scenario
with associated roles and responsibilities further defined in a number of risk analysis, information security and cyber defences, operational risk training,
policies and standard operating procedures covering the various types of operational risk training, change management framework, operational resilience
Operational Risk. Although the overall scope of Operational Risk would cover framework, physical security and safety, regular risk training, Group Risk
areas of Conduct and Compliance (i.e. regulatory) risks, we believe it makes Committee oversight.
sense to separate these items out as individual principal risks - Conduct Risk
and Compliance Risk respectively given the importance of these risks in the
context of the bank's activities and regulatory environment.
Compliance Risk Compliance risk is the risk of legal or regulatory sanctions, material Key risk mitigation tools: compliance policies, regulatory monitor,
financial loss, or loss to reputation the firm may suffer as a result of its enterprise-wide compliance and customer-specific risk assessments, compliance
failure to comply with laws, regulations, rules, related self-regulatory monitoring plan, ongoing monitoring of risk metrics and limits, customer risk
organisation standards, and codes of conduct applicable to its activities. DF assessments, regulatory compliance training, Group Risk Committee oversight.
Capital operates within the context of the UK legal and regulatory
environment. Our Compliance Framework sets out the responsibilities within the
firm to ensure awareness of both current and upcoming legal and regulatory
changes and how the firm plans and implements those requirements
appropriately. Compliance risk also includes the Group's obligations under the
Money Laundering Regulations and covers the Groups exposure to
customer-specific risk assessments, compliance monitoring plan, ongoing
monitoring of risk metrics and limits, customer risk assessments, regulatory
compliance training, Executive Risk Committee oversight.
Conduct Risk We define conduct risk as the risk of detriment caused to DF Capital's Key risk mitigation tools: conduct risk policies, product governance,
customers or financial markets due to inappropriate execution of its business enterprise- wide conduct risk assessment, ongoing monitoring of risk metrics
activities and processes, including the sale of unsuitable products and and limits, monitoring of complaints and customer feedback, key controls
inappropriate behaviours. The Conduct Risk Framework outlines our approach for testing, Code of Ethics, conduct risk training and Group Risk Committee
ensuring good customer outcomes in line with the New Consumer Duty. It is oversight.
supported by specific policies covering topics such as product governance,
complaints, and vulnerable customers, which detail the specific steps and
responsibilities across the firm. The scope of conduct risk coverage includes
our AIM requirements, with policies such as a Market Abuse Regime Policy
(including Share Dealing Code) and a Substantial and Related Party
Transactions Policy.
Prudential Risk Prudential risk covers three financial risks relating to the bank maintaining Key risk mitigation tools: treasury policies, ICAAP, ILAAP, funds transfer
sufficient resources to ensure it is financially resilient: pricing policy, additional stress testing, ongoing monitoring of risk metrics
and limits, financial planning and forecasting, monitoring of external
· Funding and liquidity risk: The risk that DF Capital is not able environment, Asset & Liability Committee and Group Risk Committee
to meet its financial obligations as they fall due or that it does not have oversight.
the tenor and composition of funding and liquidity to support its assets.
· Capital risk: The risk that DF Capital has an insufficient amount
or quality of capital to support the regulatory requirements of its business
activities through normal and stressed conditions.
· Market risk (including interest rate risk): The risk of financial
loss through un-hedged or mismatched asset and liability positions due to
interest rate changes. This also includes the risk that assets and liabilities
reference different interest rate bases and the risk of adverse financial
impact from movements in market prices in the value of assets and liabilities.
Roles, responsibilities, and requirements for Liquidity and Capital management
are outlined in the Treasury Policy, with risk appetite taking into account
the results of the bank's ILAAP and ICAAP. The Treasury Policy also outlines
the roles and responsibilities required for identifying, measuring, monitoring
and controlling any interest rate risk which arises due to the mismatch
between assets and liabilities.
Credit Risk Credit risk is the risk of financial loss arising from a customer or Key risk mitigation tools: Credit underwriting criteria, asset audits, sector
counterparty failing to meet their financial obligations to DF Capital. Credit deep-dive reviews, portfolio monitoring, ongoing monitoring of risk metrics
risk is considered the most significant risk faced by DF Capital and can be and limits, hindsight reviews of default events, monitoring of external
broken down into the following categories: environment, Credit Committee and Group Risk Committee oversight.
· Client Default Risk: The risk of loss arising from a failure of a
borrower to meet their obligations under a credit agreement.
· Credit Concentration Risk: The risk of loss due to the
concentration of credit risk to a specific customer, counterparty, geography,
or industry.
· Repurchase Risk: The risk of loss arising from the failure of a
third-party to meet a claim under a repurchase agreement.
· Security Risk: The risk that an asset used as security to
mitigate a credit loss does not provide the protection to the Company that is
expected, leading to unanticipated losses.
· Counterparty Risk: The failure of a Group counterparty or
derivative provider.
A credit framework and policies are in place to manage DF Capital's credit
risk exposure, covering the roles and responsibilities of the Group's lending
and investment activities.
Strategic Risk Strategic risks are the risks which can adversely impact the ability of DF Key risk mitigation tools: Executive Committee and Board oversight,
Capital in achieving its strategic objectives. These risks may impact comprehensive risk assessments of strategic and financial plans, stress
shareholder value, earnings or growth from poor strategic decisions, improper testing, horizon scanning, ongoing monitoring of macro and microeconomic
implementation of business strategies or from external events. environment, change management framework.
The level 2 principal risks which fall under this category include:
· Strategic Planning Risk: The risk of strategic plans being
unachievable or unrealistic.
· Execution Risk: The risk of failing to execute the Group's
strategy and failing to deliver key strategic initiatives required to meet the
financial and commercial targets of the Group.
· Strategic Projects Risk: The risk of delay or failure of
strategic projects and programmes.
· External Environment: The risk of failing to address the impact
of external events and competitive threats.
Strategic risks are considered as part of DF Capital's strategic and financial
plans. Stress scenarios are modelled as part of the ICAAP and ILAAP to
determine what level of capital and liquidity the Group will need to hold in
support of its strategic and financial plans.
Statement of Directors' Responsibilities
We, the Directors, confirm that to the best of our knowledge:
● the interim condensed consolidated financial statements have been prepared in
accordance with IAS 34 'Interim Financial Reporting' as adopted by the United
Kingdom (UK);
● the interim report includes a fair review of the performance of the business
and the position of the Group and the undertakings included in the
consolidation taken as a whole, together with a description of the principal
risks and uncertainties that they face; and
● the interim report and financial statements, taken as a whole, are fair,
balanced and understandable.
By order of the Board
……………………………
Carl D'Ammassa
Director
10 September 2025
Independent Review Report to Distribution Finance Capital Holdings plc
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2025 which comprises the condensed consolidated statement of
comprehensive income, the condensed consolidated statement of financial
position, the condensed consolidated statement of changes in equity, the
condensed consolidated cashflow statement and related notes 1 to 30.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2025 is not prepared, in all
material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the AIM Rules of the London Stock Exchange.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the AIM rules of the London Stock Exchange.
In preparing the half-yearly financial report, the directors are responsible
for assessing the group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our conclusion, including our
conclusion relating to going concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
Manchester, United Kingdom
10 September 2025
Condensed Consolidated Statement of Comprehensive Income
6 months 6 months Year ended
ended ended 31 December
30 June 2025 30 June 2024 2024
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Interest and similar income 5 43,937 37,657 76,820
Interest and similar expenses 6 (16,942) (15,383) (31,208)
Net interest income 26,995 22,274 45,612
Fee income 7 607 695 1,237
Fee expenses 8 (796) (688) (1,626)
Gains/(losses) on derivatives at fair value through profit or loss (519) 225 372
Other income 25 - 2
Total operating income 26,312 22,506 45,597
Staff costs 9 (9,499) (7,823) (16,044)
Other operating expenses 10 (5,588) (5,403) (10,670)
Net impairment (loss)/gain on financial assets 12 (2,187) (106) 241
Other provisions - - (50)
Total operating profit 9,038 9,174 19,074
Profit before taxation 9,038 9,174 19,074
Taxation charge 13 (2,432) (2,443) (5,053)
Profit after taxation 6,606 6,731 14,021
Other comprehensive income/(loss):
Items that may subsequently be transferred to the income statement:
FVOCI investment securities:
Amounts transferred to the income statement - - 75
Fair value movements - 74 -
Total other comprehensive income for the period, net of tax - 74 75
Total comprehensive income for the period 6,606 6,805 14,096
Earnings per share: pence pence Pence
Basic EPS 28 3.7 3.8 7.8
Diluted EPS 28 3.5 3.6 7.4
Condensed Consolidated Statement of Financial Position
30 June 2025 30 June 2024 31 December 2024
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Assets:
Cash and balances at central banks 84,856 86,036 110,030
Loans and advances to banks 11,599 3,496 3,771
Investment securities 25 - 6,175 769
Derivatives held for risk management 306 210 295
Loans and advances to customers 14 722,031 596,771 660,772
Trade and other receivables 15 6,486 5,126 4,678
Deferred taxation asset 18 2,110 5,265 3,980
Non-current assets held for sale - 50 -
Property, plant and equipment 1,026 1,303 1,093
Right-of-use assets 19 2,744 1,141 202
Intangible assets 826 632 950
Total assets 831,984 706,205 786,540
Liabilities:
Customer deposits 22 688,128 579,012 649,665
Amounts due to banks - 180 180
Derivatives held for risk management 495 65 6
Fair value adjustments on hedged liabilities 26 287 182 136
Lease liabilities 23 2,643 1,127 90
Trade and other payables 11,961 7,101 9,335
Provisions 11 422 70 285
Current taxation liability 17 189 670 1,259
Subordinated liabilities 24 10,234 10,225 10,230
Total liabilities 714,359 598,632 671,186
Equity:
Issued share capital 21 1,793 1,793 1,793
Merger relief 21 94,911 94,911 94,911
Merger reserve (20,609) (20,609) (20,609)
Own shares 21 (473) (439) (440)
Retained earnings 46,880 31,917 39,699
Treasury Shares 21 (4,877) - -
Total equity 117,625 107,573 115,354
Total equity and liabilities 831,984 706,205 786,540
Condensed Consolidated Statement of Changes in Equity
Issued share capital Merger relief Merger reserve Own shares(1) Treasury Shares(2) Retained earnings/(loss)
Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 December 2023 (Audited) 1,793 94,911 (20,609) (401) - 24,720 100,414
Profit after taxation - - - - - 6,731 6,731
Other comprehensive loss - - - - - 74 74
Share-based payments - - - - - 493 493
Share premium account cancellation - - - (38) - (101) (139)
Balance at 30 June 2024 (Unaudited) 1,793 94,911 (20,609) (439) - 31,917 107,573
Profit after taxation - - - - - 7,290 7,290
Other comprehensive loss - - - - - 1 1
Share-based payments - - - - - 492 492
Employee Benefit Trust - - - (1) - (1) (2)
Balance at 31 December 2024 (Audited) 1,793 94,911 (20,609) (440) - 39,699 115,354
Profit after taxation - - - - - 6,606 6,606
Share-based payments - - - - - 614 614
Employee Benefit Trust - - - (33) - (39) (72)
Share buyback - - - - (4,877) - (4,877)
Balance at 30 June 2025 (Unaudited) 1,793 94,911 (20,609) (473) (4,877) 46,880 117,625
(1)The Group has adopted look-through accounting (see note 1 of the 2024
Annual Report and Accounts) and recognised the Employee Benefit Trust (EBT)
within the consolidated financial statements.
( )
(2)During the period, the Group repurchased 12,966,866 shares at a total cost
of £4,876,862 inclusive of commission. These treasury shares do not carry
voting rights or rights to dividends while held by the company.
Condensed Consolidated Cash Flow Statement
30 June 2025 30 June 2024 31 December 2024
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Cash flows from operating activities:
Profit before taxation 9,038 9,174 19,074
Adjustments for non-cash items and other adjustments 20 4,788 1,948 3,822
Included in the income statement
Increase in operating assets 20 (65,630) (28,693) (92,390)
Increase in operating liabilities 20 41,532 6,654 79,376
Taxation (paid)/received (1,631) 55 (681)
Net cash (used in)/generated from operating activities (11,903) (10,862) 9,201
Cash flows from investing activities:
Purchase of investment securities - (4,936) (9,918)
Proceeds from sale and maturity of investment securities - 15,000 25,000
Dividend income on money market fund 21 3 25
Coupon received from investment securities 25 - 75 75
Purchase of property, plant and equipment (570) (364) (397)
Purchase of right of use assets (87) - -
Purchase of intangible assets (9) (166) (623)
Net cash (used in)/generated from investing activities (645) 9,612 14,162
Cash flows from financing activities:
Repayment of lease liabilities 23 (108) (130) (252)
Coupon paid on subordinated liabilities (630) (634) (1,273)
Purchase of own shares (72) (138) (142)
Purchase of treasury shares 21 (4,877) - -
Net cash used in financing activities (5,687) (902) (1,667)
Net (decrease)/increase in cash and cash equivalents (18,235) (2,152) 21,696
Cash and cash equivalents at start of the period 112,563 90,867 90,867
Cash and cash equivalents at end of the period 94,328 88,715 112,563
Notes to the Interim Financial Report
1. Basis of preparation
1.1 General information
The interim condensed consolidated financial statements of Distribution
Finance Capital Holdings plc (the "Company" or "DFCH plc") include the assets,
liabilities and results of its wholly owned subsidiaries, DF Capital Bank
Limited ("the Bank"), DF Capital Financial Solutions Limited and DF Capital
Retail Finance Limited, which together form the "Group".
DFCH plc is registered and incorporated in England and Wales under company
registration number 11911574. The registered office is St James' Building,
61-95 Oxford Street, Manchester, M1 6EJ. The Company's ordinary shares are
admitted to trading on AIM, a market operated by the London Stock Exchange.
The principal activity of the Company is that of an investment holding
company. The principal activity of the Group is as a specialist personal
savings and commercial lending bank group. The Group provides niche working
capital funding solutions to dealers and manufacturers, enabled by
competitively priced personal savings products.
The interim report is presented in pounds sterling, which is the currency of
the primary economic environment in which the Group operates, and are rounded
to the nearest thousand pounds, unless stated otherwise.
1.2 Basis of accounting
The condensed consolidated set of financial statements included in this
Interim Financial Report have been prepared in accordance with International
Accounting Standard 34 'Interim Financial Reporting' ('IAS 34').
The condensed set of financial statements included within this Interim
Financial Report for the six months ended 30 June 2025 should be read in
conjunction with the annual audited financial statements of Distribution
Finance Capital Holdings plc for the year ended 31 December 2024.
The annual consolidated financial statements of Distribution Finance Capital
Holdings plc are prepared in accordance with International Financial Reporting
Standards ("IFRS") as issued by the International Accounting Standards Board
("IASB") and the UK adopted IFRS.
The condensed consolidated financial information for the six months ended 30
June 2025 has been prepared using accounting policies consistent with IFRS.
The interim information does not constitute statutory financial statements
within the meaning of section 434 of the Companies Act 2006. The financial
information for the periods ending 30 June 2025 and 30 June 2024 are unaudited
but have been reviewed by the Company's auditor, Deloitte LLP, and their
report appears on page 17 of this Interim Financial Report. The comparative
figures for the year ended 31 December 2024 are the Group's statutory accounts
and have been reported on by its auditor and delivered to the Registrar of
Companies. The report of the auditor on those statutory accounts was
unqualified, did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying their report, and did not
contain a statement under Section 498(2) or (3) of the Companies Act 2006.
1.3 Principal accounting policies
The principal accounting policies adopted in the preparation of this financial
information are set out below. These policies have been applied consistently
to all the financial periods presented.
1.4 Going concern
The financial statements are prepared on a going concern basis as the
Directors are satisfied that the Group has adequate resources to continue
operating for a period of at least 12 months from the date of approval of the
financial statements.
In making this assessment the Directors have considered the Group's current
available capital and liquidity resources, the financial projections of the
Group, including the outcome of stress testing. Based on this review, the
Directors believe that the Group is well placed to manage its business risks
successfully within the expected economic outlook. Accordingly, the Directors
have adopted the going concern basis in preparing the Interim Financial
statements.
1.5 Critical accounting estimates and judgements
In accordance with IFRS, the Directors of the Group are required to make
judgements, estimates and assumptions in certain subjective areas whilst
preparing these financial statements. The application of these accounting
policies may impact the reported amounts of assets, liabilities, income and
expenses and actual results may differ from these estimates.
Any estimates and underlying assumptions used within the statutory financial
statements are reviewed on an ongoing basis, with revisions recognised in the
period in which they are adjusted, and any future periods affected.
Further details can be found in note 3 of these financial statements on the
critical accounting estimates and judgements used within these financial
statements.
1.6 Foreign currency translation
The financial statements are expressed in Pounds Sterling, which is the
functional and presentational currency of the Group.
Transactions in foreign currencies are translated to the Group's functional
currency at the foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the
balance sheet date are retranslated to the functional currency at the foreign
exchange rate ruling at that date. Non-monetary assets and liabilities that
are measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction. Foreign exchange
differences arising on translation are recognised in the statement of income.
1.7 New accounting standards issued but not yet effective
In April 2024 the IASB issued IFRS18 - "Presentation and Disclosure in
Financial Statements". This is expected to impact the way in which information
is disclosed in financial statements without impacting materially on the
underlying accounting.
IFRS18 is expected to apply to the Group with effect from the financial year
ending 31 December 2027, if the standard is endorsed for use in the UK. A
detailed exercise to determine the impact of the new standard on the Group's
annual reporting will be carried out before the implementation date.
Other than IFRS18 there are no new reporting standards and interpretations in
issue but not effective which address matter relevant to the Group's
accounting and reporting.
2. Summary of material accounting policies
The same accounting policies, presentation and methods of computation are
followed in the condensed consolidated set of financial statements as applied
in the Group's latest annual audited financial statements for the year ended
31 December 2024.
3. Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial information in accordance with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and reported amounts of assets and
liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
The areas involving the most complex and subjective judgements and areas where
assumptions and estimates are considered to have the most significant effect
on the financial statements are the same as those set out in Note 3 of the
2024 Annual Report and Accounts. A summary and updates regarding these
critical accounting judgements and estimates are set out below.
Judgements
3.1. Expected credit losses loan impairment
Significant increase in credit risk for classification in stage 2
Counterparties are classified into stage 2 where the risk profile of the
borrower profile has significantly increased from inception of the exposure.
This increase in credit risk is signified by either increases in internal or
external credit ratings, the counterparty becoming over 30 days past due, or
forbearance measures being applied.
The Group has aligned its assessment of significant increases in credit risk
to its internal threshold criteria for prompting
customer pricing reviews for consistency.
Due to the short-term behavioural term of the current lending portfolio, the
Group has not applied a probationary ("cooling off") period to exposures which
are no longer triggering the stage 2 threshold criteria so these will move
back to stage 1 once the classification criteria is no longer met.
Definition of default
The Group aligns its definition of default to the regulatory definition for
default in all periods presented. The Group applies the regulatory guideline
of 90+ days in arrears and also uses internal and external information, along
with financial and non-financial information, available to the Group to
determine whether a default event has either occurred or is perceived to have
occurred.
Should a default event occur the Group applies a probationary ("cooling off")
period to Stage 3 counterparties before being transferred back to either stage
1 or 2. The probationary period is typically 3 months but is extended up to 12
months for more severe scenarios. During the probationary period the
counterparty must no longer meet the criteria for Stage 3 inclusion for the
entire applicable period.
Estimates
The Group has made the following estimates in the application of the
accounting policies that have a significant risk of material adjustment to the
carrying amount of assets and liabilities:
3.2. Expected credit losses loan impairment
See the Group's Annual Report for the year ended 31 December 2024 which
outlines the assumptions the Group includes to best estimate the probability
of default ("PD"), exposure at default ("EAD"); and loss given default ("LGD")
inputs within the impairment model in order to calculate the expected credit
loss ("ECL"). The general design of the impairment model remains unchanged for
the period ended 30 June 2025, however certain assumptions have been updated
to reflect changes in circumstances.
Probability of default ("PD")
In the absence of sufficient internal historical default data, the Group uses
an external credit rating agency to provide credit ratings and corresponding
probability of defaults ("PDs") for the vast majority of the Group's
counterparties. These are "Through-the-Cycle" PDs which represents a long-run
average probability of default, opposed to Point-in-Time PDs which are shorter
term and partially reflect the current economic outlook. Further, the primary
data points which impact credit ratings and PDs are derived from past events,
therefore, PDs are inherently a lagging indicator of expected default activity
over the following 12-month period and longer.
Consequently, the Group utilises external macroeconomic forecast data sourced
from an external economics research company to adjust PDs from
Through-the-Cycle to Point-in-Time, and further consider how default activity
may evolve in the future. Following this exercise, as at 30 June 2025 the
Group has applied a scalar to its PDs to reflect an expected marginal
improvement in the macroeconomic environment.
A 100% deterioration in PDs from average PD of 4.55% to 9.10% (excluding stage
3 exposures, which are already in default) would result in an additional
impairment charge of £3,900k at 30 June 2025 (30 June 2024: £2,429k; 31
December 2024: £1,445k).
Loss Given Default ("LGD")
The Group conducts a bi-annual review of LGD performance against modelled
assumptions. As at 30 June 2025, this analysis demonstrated that actual losses
were below our modelled LGD. Application of this change resulted in a £309k
reduction in ECL.
A 10% reduction in the expected discounted cashflows from the collateral held
by the Group would result in an additional impairment charge of £1,751k at 30
June 2025 (30 June 2024: £1,296k; 31 December 2024: £1,355k).
Forward looking macroeconomic scenarios
The Group considers four economic stress scenarios within its impairment
modelling whereby the Group stresses PD and LGD inputs in accordance with
expected macroeconomic outlooks. This provides an ECL impairment allowance for
each scenario which is multiplied by the likelihood of occurrence over the
next 12-month period from the balance sheet date to give a probability
weighted ECL.
Scenario Probability Weighting ECL Impairment ECL Coverage(1)
(%)
(£'000)
(%)
30 June 2025 (Unaudited)
Upside 20% 6,293 0.86%
Base 50% 6,842 0.93%
Downside 20% 8,275 1.13%
Severe downside 10% 14,274 1.95%
Weighted total 100% 7,762 1.06%
30 June 2024 (Unaudited)
Upside 20% 6,332 1.04%
Base 50% 7,118 1.17%
Downside 20% 8,722 1.44%
Severe downside 10% 14,110 2.33%
Weighted total 100% 7,980 1.32%
31 December 2024 (Audited)
Upside 20% 4,618 0.68%
Base 50% 5,621 0.83%
Downside 20% 7,384 1.08%
Severe downside 10% 13,656 2.01%
Weighted total 100% 6,577 0.97%
(1) ECL Coverage is calculated by dividing the ECL impairment by the Exposure
at Default (EAD). EAD is typically higher than the gross loan receivable
balance.
In the event one of the above scenarios occurs and applied a 100% probability
weighting the impact on the impairment allowances would be as follows:
30 June 2025 30 June 2024 31 December 2024
(Unaudited) (Unaudited) (Audited)
Scenario £'000 £'000 £'000
Upside (1,469) (1,648) (1,959)
Base (920) (862) (956)
Downside 513 742 807
Severe downside 6,512 6,130 7,079
4. Operating segments
IFRS 8 Operating segments requires particular classes of entities (essentially
those with publicly traded securities) to disclose information about their
operating segments, products and services, the geographical areas in which
they operate, and their major customers. Information is based on the Company's
internal management reports, both in the identification of operating segments
and measurement of disclosed segment information.
The Company's products and the markets to which they are offered are so
similar in nature that they are reported as one class of business. During H1,
the company introduced an asset finance product. As at the reporting date,
this line of business represents an immaterial amount of the total loan gross
receivable balance. Given its current scale, management has determined that it
does not meet the quantitative thresholds for separate segment disclosure
under IFRS 8, and therefore it has not been reported as an individual
operating segment at this stage. As a result, the chief operating decision
maker uses only one segment to control resources and assess the performance of
the entity, while deciding the strategic direction of the Company.
5. Interest and similar income
6 months ended 6 months ended Year ended
30 June 2025
30 June 2024
31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
At amortised cost (using effective interest rate method):
On loans and advances to customers 41,310 35,101 71,619
On loans and advances to banks 2,609 2,341 4,930
On money market fund 18 6 28
43,937 37,448 76,577
At FVOCI:
On investment securities - 209 243
Total interest and similar income 43,937 37,657 76,820
6. Interest and similar expenses
6 months ended 6 months ended Year ended
30 June 2025
30 June 2024 (Unaudited)
31 December 2024
(Unaudited)
(Audited)
£'000 £'000 £'000
At amortised cost (using effective interest rate method):
On customer deposits 16,307 14,341 29,482
On subordinated liabilities 629 633 1,272
16,936 14,974 30,754
At FVTPL:
Net interest expense on financial instruments hedging liabilities 6 409 454
Total interest and similar expenses 16,942 15,383 31,208
7. Fee Income
6 months ended 6 months ended Year ended
30 June 2025
30 June 2024
31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Facility-related fees 607 621 1,237
Other fee Income - 74 -
Total fee income 607 695 1,237
8. Fee Expense
6 months ended 6 months ended Year ended
30 June 2025
30 June 2024
31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Enable guarantee charges 414 469 988
Financial guarantee charges 364 196 576
Undrawn commitment facility fees 10 10 20
Non-incremental direct costs 8 13 23
Broker Fees - - 19
Total fee expense 796 688 1,626
9. Staff costs
6 months ended 6 months ended Year ended
30 June 2025
30 June 2024
31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Wages and salaries 7,193 5,993 12,367
Share-based payments 614 493 985
Contractor costs 72 53 59
Social security costs 1,105 868 1,784
Pension costs arising on defined contribution schemes 515 416 849
Total staff costs 9,499 7,823 16,044
Contractor costs are recognised within staff costs where the work performed
would otherwise have been performed by employees. Contractor costs arising
from the performance of other services is included within other operating
expenses.
10. Other operating expenses
6 months ended 6 months ended Year ended
30 June 2025
30 June 2024
31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Finance costs 117 52 103
Depreciation 588 295 641
Amortisation of intangible assets 132 152 285
Impairment of fixed assets 275 - -
Loss on disposal of fixed assets - - 5
Loss on disposal of intangible assets 1 - 6
Professional services expenses 1,414 1,498 2,998
Audit and accountancy fees 293 264 480
IT related expenses 1,812 1,710 3,502
Other operating expenses 1,488 1,403 2,546
Foreign Currency (Gain)/Loss (532) 29 104
Total other operating expenses 5,588 5,403 10,670
The foreign currency gain recognised within other operating expenses is
largely offset by the fair value loss on derivative financial instruments, as
reflected within the consolidated statement of comprehensive income.
11. Provisions
Analysis for movements in other provisions:
Leasehold dilapidations Other Provisions Total
£'000 £'000 £'000
6 months ended 30 June 2025 (Unaudited)
At start of period 235 50 285
Additions 126 - 126
Utilisation of provision (4) - (4)
Unused amounts reversed - - -
Unwinding of discount 15 - 15
Lease modification - - -
At end of period 372 50 422
6 months ended 30 June 2024 (Unaudited)
At start of period 67 - 67
Additions - - -
Utilisation of provision - - -
Unused amounts reversed - - -
Unwinding of discount 3 - 3
Lease modification - - -
At end of period 70 - 70
Year ended 31 December 2024 (Audited)
At start of period 67 - 67
Additions - 50 50
Utilisation of provision - - -
Unused amounts reversed - - -
Unwinding of discount 6 - 6
Lease modification 162 - 162
At end of period 235 50 285
12. Net impairment loss on financial assets
6 months ended 6 months ended Year ended
30 June 2025
30 June 2024
31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Movement in impairment allowance in the period 1,391 (6,769) (8,062)
Write-offs 796 6,875 7,821
Total net impairment losses on financial assets 2,187 106 (241)
See note 14 on further analysis of the movement in impairment allowances on
loans and advances to customers.
13. Taxation
Analysis of tax charge recognised in the period:
6 months ended 6 months ended Year ended
30 June 2025
30 June 2024
31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Current taxation charge:
UK corporation tax on profit for the current period 562 597 1,925
Adjustments in respect of prior years - - (3)
Total current taxation charge 562 597 1,922
Deferred taxation charge:
Current period 1,870 1,846 3,135
Adjustments in respect of prior years - - (4)
Total deferred taxation charge 1,870 1,846 3,131
Total taxation charge 2,432 2,443 5,053
Current tax on profits reflects UK corporation tax levied at a rate of 25% for
the period ended 30 June 2025 (30 June 2024: 25%; 31 December 2024: 25%). The
Company is not subject to the banking surcharge levied at a rate of 3% on the
profits of banking companies chargeable to corporation tax after an allowance
of £100 million per annum.
Expenses that are not deductible in determining taxable profits/losses include
impairment losses, amortisation of intangible assets, depreciation of fixed
assets, client and staff entertainment costs, and professional fees which are
capital in nature.
A deferred tax asset is only recognised to the extent the Group finds it
probable that the prior taxable losses can be utilised against future taxable
profits.
14. Loans and advances to customers
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Loan book principal 728,138 602,560 665,709
Accrued interest and fees 4,339 4,099 4,067
Gross carrying amount 732,477 606,659 669,776
less: impairment allowance (7,762) (7,980) (6,577)
less: effective interest rate adjustment (2,684) (1,908) (2,427)
Total loans and advances to customers 722,031 596,771 660,772
Refer to note 12 for further details on the impairment losses recognised in
the periods.
Ageing analysis of gross loan receivables:
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Not in default:
Not yet past due 720,710 598,697 661,391
Past due: 1 - 30 days 283 270 435
Past due: 31 - 60 days 142 144 168
Past due: 61 - 90 days 142 55 5
Past due: 90+ days - - -
721,277 599,166 661,999
Defaulted:
Not yet past due and past due 1 - 90 days 7,742 5,974 6,143
Past due 90+ days 3,458 1,519 1,634
11,200 7,493 7,777
Total gross carrying amount 732,477 606,659 669,776
Analysis of gross loan receivables in accordance with impairment losses:
Stage 1 Stage 2 Stage 3 Total
£'000 £'000 £'000 £'000
As at 1 January 2025 (Audited) 643,513 18,484 7,779 669,776
Transfer to Stage 1 5,333 (5,067) (266) -
Transfer to Stage 2 (35,268) 35,268 - -
Transfer to Stage 3 (10,811) (7,655) 18,466 -
Net lending/(repayment) 94,114 (16,629) (14,150) 63,335
Write-offs (4) (1) (629) (634)
Total movement in receivables 53,364 5,916 3,421 62,701
As at 30 June 2025 (Unaudited) 696,877 24,400 11,200 732,477
Impairment allowance coverage at 30 June 2025 0.63% 0.79% 28.23% 1.06%
Stage 2 Stage 3 Total
Stage 1
£'000 £'000 £'000 £'000
As at 1 January 2024 (Audited) 545,952 21,052 17,123 584,127
Transfer to Stage 1 16,689 (16,612) (77) -
Transfer to Stage 2 (41,655) 41,655 - -
Transfer to Stage 3 (5,530) (3,995) 9,525 -
Net lending/(repayment) 64,355 (22,746) (10,911) 30,698
Write-offs - - (8,166) (8,166)
Total movement in receivables 33,859 (1,698) (9,629) 22,532
As at 30 June 2024 (Unaudited) 579,811 19,354 7,494 606,659
Impairment allowance coverage at 30 June 2024 0.53% 1.02% 62.52% 1.32%
Stage 1 Stage 2 Stage 3 Total
£'000 £'000 £'000 £'000
As at 1 January 2024 (Audited) 545,952 21,052 17,123 584,127
Transfer to Stage 1 38,281 (38,204) (77) -
Transfer to Stage 2 (82,317) 82,416 (99) -
Transfer to Stage 3 (10,714) (7,327) 18,041 -
Net lending/(repayment) 152,311 (39,433) (19,943) 92,935
Write-offs - (20) (7,266) (7,286)
Total movement in receivables 97,561 (2,568) (9,344) 85,649
As at 31 December 2024 (Audited) 643,513 18,484 7,779 669,776
Impairment allowance coverage at 31 December 2024 0.57% 0.90% 34.95% 0.98%
Analysis of impairment losses on loans and advances to customers:
Stage 1 Stage 2 Stage 3 Total
£'000 £'000 £'000 £'000
As at 1 January 2025 (Audited) 3,692 166 2,719 6,577
Transfer to Stage 1 90 (90) - -
Transfer to Stage 2 (229) 229 - -
Transfer to Stage 3 (35) (64) 99 -
Remeasurement of impairment allowance (922) 46 2,112 1,236
Net lending/(repayment) 1,811 (94) (1,090) 627
Write-offs - - (678) (678)
Total movement in impairment allowance 715 27 443 1,185
As at 30 June 2025 (Unaudited) 4,407 193 3,162 7,762
Stage 1 Stage 2 Stage 3 Total
£'000 £'000 £'000 £'000
As at 1 January 2024 (Audited) 2,522 160 11,914 14,596
Transfer to Stage 1 147 (145) (2) -
Transfer to Stage 2 (231) 231 - -
Transfer to Stage 3 (46) (30) 76 -
Remeasurement of impairment allowance (71) 206 1,038 1,173
Net lending/(repayment) 777 (225) 251 803
Write-offs - - (8,592) (8,592)
Total movement in impairment allowance 576 37 (7,229) (6,616)
As at 30 June 2024 (Unaudited) 3,098 197 4,685 7,980
Stage 1 Stage 2 Stage 3 Total
£'000 £'000 £'000 £'000
As at 1 January 2024 (Audited) 2,522 160 11,914 14,596
Transfer to Stage 1 277 (275) (2) -
Transfer to Stage 2 (425) 479 (54) -
Transfer to Stage 3 (69) (173) 242 -
Remeasurement of impairment allowance (1,274) 560 3,191 2,477
Net lending/(repayment) 2,661 (582) (3,837) (1,758)
Write-offs - (3) (8,735) (8,738)
Total movement in impairment allowance 1,170 6 (9,195) (8,019)
As at 31 December 2024 (Audited) 3,692 166 2,719 6,577
15. Trade and other receivables
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Trade receivables 4,559 3,148 3,316
Impairment allowance (422) (106) (216)
4,137 3,042 3,100
Other debtors 265 403 528
Prepayments 2,084 1,681 1,050
2,349 2,084 1,578
Total trade and other receivables 6,486 5,126 4,678
All trade receivables are due within one year and typically due for payment
within 30 days of invoice.
The trade receivable balances are assessed for expected credit losses (ECL)
under the 'simplified approach', which requires the Group to assess all
balances for lifetime ECLs and is not required to assess significant increases
in credit risk.
Ageing analysis of trade receivables:
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Not in default:
Not yet past due 3,984 2,545 3,125
Past due: 1 - 30 days 159 504 45
Past due: 31 - 60 days 179 51 5
Past due: 61 - 90 days 7 29 8
Past due: 90+ days - - -
4,329 3,129 3,183
Defaulted:
Not yet past due and past due 1 - 90 days 83 9 94
Past due 90+ days 147 10 39
230 19 133
Total trade receivables 4,559 3,148 3,316
Analysis of movement of impairment losses on trade receivables:
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
At 1 January 216 259 259
Amounts written off (63) (206) (223)
Change in impairment allowance due to new trade and other receivables 269 53 180
originated net of those derecognised due to settlement
At period end 422 106 216
16. Current taxation asset
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
At 1 January - 55 55
Repayments - (55) (55)
At period end - - -
17. Current taxation liability
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
At 1 January (1,259) (73) (73)
Charge to profit and loss account (561) (597) (1,925)
Repayments 1,631 - 736
Adjustments in respect of prior years - - 3
At period end (189) (670) (1,259)
18. Deferred taxation asset
The table below shows the movement in net deferred tax assets:
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
At 1 January 3,980 7,111 7,111
Charge to profit and loss account (1,870) (1,846) (3,135)
Adjustments in respect of prior years - - 4
At period end 2,110 5,265 3,980
The Group has an unrecognised deferred tax asset value of £nil (30 June 2024:
£0.7m, 31 December 2024: £nil) which is not expected to be utilised for the
foreseeable future.
19. Right-of-use assets
Buildings
£'000
Cost:
31 December 2023 (Audited) 2,127
Additions 3
Disposals and write-offs -
Lease modifications -
As at 30 June 2024 (Unaudited) 2,130
Additions 5
Disposals and write-offs -
Lease modifications (836)
As at 31 December 2024 (Audited) 1,299
Additions 2,768
Disposals and write-offs -
As at 30 June 2025 (Unaudited) 4,067
Accumulated depreciation:
31 December 2023 (Audited) 900
Charge for the period 89
Disposals and write-offs -
As at 30 June 2024 (Unaudited) 989
Charge for the period 108
Disposals and write-offs -
As at 31 December 2024 (Audited) 1,097
Charge for the period 226
Disposals and write-offs -
As at 30 June 2025 (Unaudited) 1,323
Carrying amount:
At 30 June 2024 (Unaudited) 1,141
At 31 December 2024 (Audited) 202
At 30 June 2025 (Unaudited) 2,744
During the period, the Group entered into a lease agreement for a new office
space. This lease agreement commenced in March 2025 and therefore in
accordance with IFRS16, a right of use asset and lease liability were
recognised from that point within the consolidated financial statements.
The maturity analysis of lease liabilities is presented within note 23.
20. Notes to the cash flow statement
Cash and cash equivalents:
See below for reconciliation of balances classified as cash and cash
equivalents, which are recognised within the consolidated cash flow statement:
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Cash and balances at central banks 84,856 86,036 110,030
Loans and advances to banks 9,472 1,487 1,764
Money market fund - 1,192 769
Total cash and cash equivalents 94,328 88,715 112,563
The loans and advances to banks figure included on the face of the balance
sheet includes cash collateral on derivatives placed with banks, which has not
been classified as a cash and cash equivalent.
Adjustments for non-cash items and other adjustments included in the income
statement:
30 June 2025 30 June 2024 31 December 2024
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Depreciation of property, plant and equipment 362 206 444
Depreciation of right-of-use assets 226 89 197
Impairment of property, plant and equipment 275 - -
Loss on disposal of property, plant and equipment - - 5
Amortisation of intangible assets 132 152 285
Loss on disposal of intangible assets 1 - 6
Loss on lease modification - - 30
Share based payments 614 493 985
Impairment allowances on receivables 2,187 106 (241)
Movement in other provisions - - 50
Dividend income on money market fund (18) (3) (28)
Interest income on investment securities - (209) (243)
Realised loss on investment securities - - -
Finance costs 102 52 103
Unwind of discount 15 3 6
Interest on subordinated liabilities 629 633 1,272
Amortisation of subordinated liabilities acquisition costs 5 5 10
Interest in suspense 258 421 941
Total non-cash items and other adjustments 4,788 1,948 3,822
Net change in operating assets:
30 June 2025 30 June 2024 31 December 2024
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Increase in loans and advances to customers (63,020) (29,060) (93,048)
Derivative financial instruments (11) 327 241
(Increase)/decrease in other assets (2,599) 40 417
Increase in operating assets (65,630) (28,693) (92,390)
Net change in operating liabilities:
30 June 2025 30 June 2024 31 December 2024
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Increase in customer deposits 38,463 4,390 75,043
Derivative financial instruments 489 (500) (559)
Fair value adjustments for portfolio hedged risk 151 (242) (288)
Increase/(decrease) in other liabilities 2,429 3,006 5,180
Increase in operating liabilities 41,532 6,654 79,376
21. Equity
30 June 2025 30 June 2024 31 December 2024 30 June 2025 30 June 2024 31 December 2024
(Unaudited) (Unaudited) (Audited) (Unaudited) (Unaudited) (Audited)
No. No. No. £'000 £'000 £'000
Authorised:
Ordinary shares of 179,369,199 179,369,199 179,369,199 1,793 1,793 1,793
1p each
179,369,199 179,369,199 179,369,199 1,793 1,793 1,793
Allotted, issued and fully paid: Ordinary shares of 1p each
Included in the ordinary shares above are 12,966,866 shares repurchased by the
Company in the period at a total cost of £4,876,862 inclusive of commission.
These treasury shares do not carry voting rights or rights to dividends while
held by the company. See the table below for further details.
Analysis of the movements in equity:
Date No. of shares Issue Price Share Capital Merger Relief Total
# £ £'000 £'000 £'000
Balance at 1 January 2024 (Audited) 179,369,199 1,793 94,911 96,704
No transactions within the period - - - - -
Balance at 30 June 2024 (Unaudited) 179,369,199 1,793 94,911 96,704
No transactions within the period - - - - -
Balance at 31 December 2024 (Audited) 179,369,199 1,793 94,911 96,704
No transactions within the period - - - - -
Balance at 30 June 2025 (Unaudited) 179,369,199 1,793 94,911 96,704
Own shares:
Own shares represent 2,635,658 (30 June 2024: 2,677,859; 31 December 2024:
2,677,998) ordinary shares held by the Group's Employee Benefits Trust to meet
obligations under the Company's share and share option plans. The shares are
stated at cost and their market value at 30 June 2025 was £1,027,907 (30 June
2024: £780,463; 31 December 2024: £990,859).
22. Customer deposits
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Retail deposits 688,128 579,012 649,665
Total customer deposits 688,128 579,012 649,665
Maturity analysis:
Amounts repayable within one year 609,584 476,466 513,226
Amounts repayable after one year 78,544 102,546 136,439
688,128 579,012 649,665
23. Lease liabilities
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Current (78) 154 90
Non-current 2,721 973 -
Total lease liabilities 2,643 1,127 90
Maturity analysis:
Year 1 138 252 109
Year 2 274 252 -
Year 3 275 252 -
Year 4 544 253 -
Year 5 544 252 -
Onwards 2,444 231 -
Total lease payments 4,219 1,492 109
Less: unearned interest (1,576) (365) (19)
Total lease liabilities 2,643 1,127 90
During the period, the Group entered into a lease agreement for a new office
space. This lease agreement commenced in March 25 and therefore in accordance
with IFRS16, a right of use asset and lease liability were recognised from
that point within the consolidated financial statements.
The lease agreement includes a rent-free period in the first 12 months from
inception of the lease. As a result, in the 12 months from the reporting date
the expected lease repayments are lower than the associated finance cost.
Therefore, the liability is increasing in year 1, hence the current portion of
the lease liability is negative, whilst the non-current portion is higher than
the amount presented on the face of the balance sheet.
Movements in lease liabilities in the period:
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
At 1 January 90 1,205 1,205
Additions 2,561 - -
Finance costs 100 52 103
Lease payments (108) (130) (252)
Lease modification - - (966)
At period end 2,643 1,127 90
24. Subordinated liabilities
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000
Tier 2 notes 10,000 10,000 10,000
Accrued interest 267 269 268
Deferred acquisition costs (33) (44) (38)
Total subordinated liabilities 10,234 10,225 10,230
25. Investment securities
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Investments not measured at fair value:
Money market fund - 1,192 769
Investment securities measured at FVOCI:
Treasury bills - 4,983 -
UK government gilts - - -
Total investment securities - 6,175 769
Analysis of investment securities movements during the period:
At 1 January 769 14,839 14,839
Purchased investment securities 5,031 6,128 10,659
Proceeds from sold or maturing securities (5,818) (15,000) (25,000)
Coupons received - (75) (75)
Interest income 18 209 271
Unrealised Gains - 74 -
Amounts transferred to the income statement - - 75
At period end - 6,175 769
Maturity profile of investment securities:
Within 12 months - 1,192 769
Over 12 months - 4,983 -
During the period, the Group's only active investment security was a low
volatility money market fund which invests in a range of cash holding and
short dated securities held to maturity. This materially removes exposure to
market movements, meaning the fund consistently trades at par value. The Group
have therefore treated the investment as a cash and cash equivalent with
related purchases and sales not recognised in the cash flow statement.
In comparative periods, the Group held other investment securities such as
Government gilts and UK treasury bills which were not treated as cash and cash
equivalents and such were included in the cash flow statement.
26. Hedge accounting
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Hedged liabilities:
Current hedge relationships 305 199 167
Swap inception adjustment (18) (17) (31)
Fair value adjustments on hedged liabilities 287 182 136
As at the period ended 30 June 2025, the Group presently only hedges
liabilities in the form of its customer deposits and subordinated liabilities.
The Group currently hedges a small amount of its longer-term loans and
advances to customers. The majority of loans and advances to customers are
expected to reprice within a short time frame and are subsequently not hedged.
At present, the Group expects its hedging relationships to be highly effective
as the Group hedges liabilities and assets for which the fair value movements
between the hedged item and hedging instrument are expected to be highly
correlated.
Further, the Group does not anticipate having to rebalance the hedging
relationship once entered into due to the contractual terms of the hedged
liabilities meaning that the contractual cash flows are highly predictable,
with any deviation likely to be negligible. In the period ended 30 June 2025,
there has been no cancelled or de-designated hedge relationships due to failed
hedge accounting relationships.
27. Financial instruments
Analysis of financial instruments by valuation model
The Group measures fair values using the following hierarchy of methods:
· Level 1 - Quoted market price in an active market for an
identical instrument
· Level 2 - Valuation techniques based on observable inputs. This
category includes instruments valued using quoted market prices in active
markets for similar instruments, quoted prices for similar instruments that
are considered less than active, or other valuation techniques where all
significant inputs are directly or indirectly observable from market data
· Level 3 - Inputs for the assets or liabilities that are not based
on observable market data (unobservable inputs).
Financial assets and liabilities that are not measured at fair value:
Carrying amount Fair value Level 1 Level 2 Level 3
30 June 2025 (Unaudited) £'000 £'000 £'000 £'000 £'000
Financial assets not measured at fair value:
Cash and balances at central banks 84,856 84,856 84,856 - -
Loans and advances to banks 11,599 11,599 11,599 - -
Investment securities - - - - -
Loans and advances to customers 722,031 722,031 - - 722,031
Trade receivables 4,137 4,137 - - 4,137
Other receivables 265 265 - - 265
822,888 822,888 96,455 - 726,433
Financial liabilities not measured at fair value:
Customer deposits 688,128 686,851 - - 686,851
Amounts due to banks - - - - -
Other financial liabilities 2,643 2,643 - - 2,643
Subordinated liabilities 10,234 10,524 - 10,524 -
Trade payables 221 221 - - 221
Other payables 8,448 8,448 - - 8,448
709,674 708,687 - 10,524 698,163
Carrying amount Fair value Level 1 Level 2 Level 3
30 June 2024 (Unaudited) £'000 £'000 £'000 £'000 £'000
Financial assets not measured at fair value:
Cash and balances at central banks 86,036 86,036 86,036 - -
Loans and advances to banks 3,496 3,496 3,496 - -
Investment securities 1,192 1,192 1,192 - -
Loans and advances to customers 596,771 596,771 - - 596,771
Trade receivables 3,042 3,042 - - 3,042
Other receivables 403 403 - - 403
690,940 690,940 90,724 - 600,216
Financial liabilities not measured at fair value:
Customer deposits 579,012 579,500 - - 579,500
Amounts due to banks 180 180 180 - -
Other financial liabilities 1,127 1,127 - - 1,127
Subordinated liabilities 10,225 10,497 - 10,497 -
Trade payables 97 97 - - 97
Other payables 4,317 4,317 - - 4,317
594,958 595,718 180 10,497 585,041
Carrying amount Fair value Level 1 Level 2 Level 3
31 December 2024 (Audited) £'000 £'000 £'000 £'000 £'000
Financial assets not measured at fair value:
Cash and balances at central banks 110,030 110,030 110,030 - -
Loans and advances to banks 3,771 3,771 3,771 - -
Investment securities 769 769 769 - -
Loans and advances to customers 660,772 660,772 - - 660,772
Trade receivables 3,100 3,100 - - 3,100
Other receivables 528 528 - - 528
778,970 778,970 114,570 - 664,400
Financial liabilities not measured at fair value:
Customer deposits 649,665 650,736 - - 650,736
Amounts due to banks 180 180 180 - -
Other financial liabilities 90 90 - - 90
Subordinated liabilities 10,230 10,567 - 10,567 -
Trade payables 524 524 - - 524
Other payables 4,384 4,384 - - 4,384
665,073 666,481 180 10,567 655,734
Fair values for level 3 assets were calculated using a discounted cash flow
model and the Directors consider that the carrying amounts of financial assets
and liabilities recorded at amortised cost are approximate to their fair
values.
Cash and balances at central banks
This represents cash held at central banks where fair value is considered to
be equal to carrying value.
Loans and advances to banks
This mainly represents the Group's working capital current accounts with other
banks with an original maturity of less than three months. Fair value is not
considered to be materially different to carrying value.
Investment securities
The investment securities carried at amortised cost represent the Groups
investment in a money market fund. Due to the short-term nature of the
underlying investments which are held to maturity, the fund has never deviated
from par value. The carrying value is therefore considered to be approximately
equal to the fair value.
Loans and advances to customers
Due to the short-term nature of loans and advances to customers, their
carrying value is considered to be approximately equal to their fair value.
These items are short term in nature such that the impact of the choice of
discount rate would not make a material difference to the calculations.
Customer deposits
The fair value of fixed rate retail deposits has been estimated by discounting
future cash flows at current market rates of interest. Retail deposits at
variable rates and deposits payable on demand are considered to be at current
market rates and as such fair value is estimated to be equal to carrying
value.
Subordinated liabilities
The fair value of the subordinated liabilities is estimated by discounting the
expected cashflows using an interest rate for
similar liabilities with the same remaining maturity rate and credit profile.
Trade and other receivables, other borrowings and other liabilities
These represent short-term receivables and payables and as such their carrying
value is considered to be equal to their fair value.
Financial assets and liabilities included in the statement of financial
position that are measured at fair value:
Carrying Amount Principal Amount Level 1 Level 2 Level 3
30 June 2025 (Unaudited) £'000 £'000 £'000 £'000 £'000
Financial assets measured at fair value:
Investment securities - - - - -
Derivative assets 306 25,000 - 306 -
306 25,000 - 306 -
Financial liabilities measured at fair value:
Derivative liabilities 495 55,156 - 495 -
495 55,156 - 495 -
Carrying Amount Principal Amount Level 1 Level 2 Level 3
30 June 2024 (Unaudited) £'000 £'000 £'000 £'000 £'000
Financial assets measured at fair value:
Investment securities 4,983 5,000 4,983 - -
Derivative assets 210 10,000 - 210 -
5,193 15,000 4,983 210 -
Financial liabilities measured at fair value:
Derivative liabilities 65 10,000 - 65 -
65 10,000 - 65 -
Carrying Amount Principal Amount Level 1 Level 2 Level 3
31 December 2024 (Audited) £'000 £'000 £'000 £'000 £'000
Financial assets measured at fair value:
Investment securities - - - - -
Derivative assets 295 10,000 - 295 -
295 10,000 - 295 -
Financial liabilities measured at fair value:
Derivative liabilities 6 5,000 - 6 -
6 5,000 - 6 -
Investment securities
The investment securities carried at fair value by the Company are treasury
bills and government gilts. Treasury bills and government gilts are traded in
active markets and fair values are based on quoted market prices.
There were no transfers between levels during the periods, all investment
securities have been measured at level 1 from acquisition.
Derivatives
Derivative instruments fair values are provided by a third party and are based
on the market values of similar financial
instruments. The fair value of investment securities held at FVTPL is measured
using a discounted cash flow model.
Capital management
The Group manages its capital to ensure that it will be able to continue as a
going concern while providing an adequate return to shareholders.
Refer to the audited financial statement of the Group for the year ended 31
December 2024 for further details of the Group's approach to capital
management.
Financial risk management
The Group's activities and the existence of the disclosed financial
instruments expose it to a variety of financial risks.
The Board has overall responsibility for the determination of the Group's risk
management objectives and policies. The overall objective of the Board is to
set policies that seek to reduce ongoing risk as far as possible without
unduly affecting the Group's competitiveness and flexibility.
The Group is exposed to the following financial risks:
· Credit risk
· Liquidity risk
· Interest rate risk
Credit risk
Credit risk is the risk that a customer or counterparty will default on its
contractual obligations resulting in financial loss to the Group. One of the
Group's main income-generating activities is lending to customers and
therefore credit risk is a principal risk. Credit risk mainly arises from
loans and advances to customers. The Group considers all elements of credit
risk exposure such as counterparty default risk, geographical risk and sector
risk for risk management purposes.
Refer to the audited financial statement of the Group for the year ended 31
December 2024 for further details of the Group's approach to credit risk
management and impairment provisioning.
Collateral held as security:
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Fully collateralised
Loan-to-value* ratio:
Less than 50% 19,589 14,123 15,539
51% to 70% 44,938 63,736 75,391
71% to 80% 121,738 113,066 120,027
81% to 90% 110,189 109,306 104,174
91% to 100% 373,420 274,914 305,906
Asset Finance 6,011 - -
Total collateralised lending 675,885 575,145 621,037
Unsecured lending 56,592 31,514 48,739
* Calculated using wholesale collateral values. Wholesale collateral values
represent the invoice total (including applicable VAT) from the invoice
received from the supplier of the product. The wholesale amount is lower than
the recommended retail price (RRP) of the product.
The Group's lending activities are asset based so it expects that the majority
of its exposure is secured by the collateral value of the asset that has been
funded under the loan agreement. The Group has title to the collateral which
is funded under loan agreements. The collateral includes boats, motorcycles,
recreational vehicles, caravans, light commercial vehicles, industrial and
agricultural equipment. The collateral has low depreciation and is not subject
to rapid technological changes or redundancy. There has been no change in the
Group's assessment of collateral and its underlying value in the reporting
period.
The assets are generally in the counterparty's possession, but this is
controlled and managed by the asset audit process. The audit process checks
on a periodic basis that the asset is in the counterparty's possession and has
not been sold out of trust or is otherwise not in the counterparty's control.
The frequency of the audits is initially determined by the risk rating
assessed at the time that the borrowing facility is first approved and is
assessed on an ongoing basis.
Additional security may also be taken to further secure the counterparty's
obligations and further mitigate risk. Further to this, in many cases, the
Group includes a repurchase agreement with the counterparty to sell-back the
underlying collateral.
Based on the Group's current principal products, the counterparty repays its
obligation under a loan agreement with the Group at or before the point that
it sells the asset. If the asset is not sold and the loan agreement reaches
maturity, the counterparty is required to pay the amount due under the loan
agreement plus any other amounts due. In the event that the counterparty does
not pay on the due date, the Group's customer management process will maintain
frequent contact with the counterparty to establish the reason for the delay
and agree a timescale for payment. Senior Management will review actions on a
regular basis to ensure that the Group's position is not being prejudiced by
delays.
In the event the Group determines that payment will not be made voluntarily,
it will enforce the terms of its loan agreement and recover the asset,
initiating legal proceedings for delivery, if necessary. If there is a
shortfall between the net sales proceeds from the sale of the asset and the
counterparty's obligations under the loan agreement, the shortfall is payable
by the counterparty on demand.
Concentration of credit risk:
The Group maintains policies and procedures to manage concentrations of credit
at the counterparty level and industry level to achieve a diversified loan
portfolio. The Group's gross receivable balance for loans and advances to
customers is split by industry as follows:
30 June 2025 30 June 2024 31 December 2024
£'000 % £'000 % £'000 %
Leisure:
Lodges and holiday homes 81,240 11.1% 118,549 19.5% 91,473 13.7%
Motorhomes and caravans 220,375 30.1% 164,020 27.0% 207,948 31.0%
Marine 84,566 11.5% 63,403 10.5% 72,120 10.8%
Motorsport 39,884 5.4% 33,813 5.6% 35,264 5.3%
Automotive 39,273 5.4% 21,803 3.6% 31,562 4.7%
465,338 63.5% 401,588 66.2% 438,367 65.4%
Commercial:
Transport 110,560 15.1% 104,854 17.3% 93,314 13.9%
Industrial equipment 40,796 5.6% 32,986 5.4% 33,128 4.9%
Agricultural equipment 20,749 2.8% 26,488 4.4% 24,720 3.7%
Other serialised assets - 0.0% 3,575 0.6% - 0.0%
172,105 23.5% 167,903 27.7% 151,162 22.6%
Wholesale and receivables funding 89,023 12.2% 37,168 6.1% 80,247 12.0%
Asset Finance 6,011 0.8% - 0.0% - 0.0%
Total gross receivables 732,477 100% 606,659 100% 669,776 100%
Credit quality of borrowers:
An analysis of the Group's credit risk exposure for loan and advances per
class of financial asset, internal rating and stage is provided in the
following tables. Refer to the audited financial statements of the Group for
the year ended 31 December 2024 for description of the meanings of stages 1, 2
and 3.
30 June 2025 (Unaudited) Stage 1 Stage 2 Stage 3 Total
£'000 Portfolio % £'000 Portfolio % £'000 Portfolio % £'000 Portfolio %
Gross carrying
amount:
Above average (Risk rating 1-2) 496,124 67.7% 768 0.1% 2,138 0.3% 499,030 68.1%
Average 182,682 24.9% 15,832 2.2% 4,177 0.6% 202,691 27.7%
(Risk rating 3-5)
Below average (Risk rating 6+) 18,071 2.5% 7,800 1.1% 4,885 0.7% 30,756 4.2%
Total gross carrying amount 696,877 95.1% 24,400 3.4% 11,200 1.5% 732,477 100%
£'000 ECL coverage % £'000 ECL coverage % £'000 ECL coverage % £'000 ECL coverage %
Impairment allowance:
Above average (Risk rating 1-2) (1,838) 0.4% (1) 0.1% (343) 16.0% (2,182) 0.4%
Average (2,177) 1.2% (95) 0.6% (538) 12.9% (2,810) 1.4%
(Risk rating 3-5)
Below average (Risk rating 6+) (392) 2.2% (97) 1.2% (2,281) 46.7% (2,770) 9.0%
Total impairment allowance (4,407) 0.6% (193) 0.8% (3,162) 28.2% (7,762) 1.1%
Stage 1 Stage 2 Stage 3 Total
30 June 2024 (Unaudited)
£'000 Portfolio % £'000 Portfolio % £'000 Portfolio % £'000 Portfolio %
Gross carrying amount:
Above average (Risk rating 1-2) 441,583 72.8% - 0.0% 251 0.0% 441,834 72.8%
Average (Risk rating 3-5) 118,170 19.5% 15,912 2.6% - 0.0% 134,082 22.1%
Below average (Risk rating 6+) 20,058 3.3% 3,442 0.6% 7,243 1.2% 30,743 5.1%
Total gross carrying amount 579,811 95.6% 19,354 3.2% 7,494 1.2% 606,659 100%
£'000 ECL coverage % £'000 ECL coverage % £'000 ECL coverage % £'000 ECL coverage %
Impairment allowance:
Above average (Risk rating 1-2) (1,544) 0.3% - 0.0% (47) 18.7% (1,591) 0.4%
Average (Risk rating 3-5) (1,346) 1.1% (131) 0.8% - 0.0% (1,477) 1.1%
Below average (Risk rating 6+) (208) 1.0% (66) 1.9% (4,638) 64.0% (4,912) 16.0%
Total impairment allowance (3,098) 0.5% (197) 1.0% (4,685) 62.5% (7,980) 1.3%
31 December 2024 (Audited) Stage 1 Stage 2 Stage 3 Total
£'000 Portfolio % £'000 Portfolio % £'000 Portfolio % £'000 Portfolio %
Gross carrying amount:
Above average (Risk rating 1-2) 459,277 68.6% 13,996 2.1% 4,075 0.6% 477,348 71.3%
Average (Risk rating 3-5) 173,037 25.8% 2,092 0.3% 1,157 0.2% 176,286 26.3%
Below average (Risk rating 6+) 11,199 1.7% 2,396 0.4% 2,547 0.4% 16,142 2.4%
Total gross carrying amount 643,513 96.1% 18,484 2.8% 7,779 1.2% 669,776 100.0%
£'000 ECL coverage % £'000 ECL coverage % £'000 ECL coverage % £'000 ECL coverage %
Impairment allowance:
Above average (Risk rating 1-2) (1,686) 0.4% (89) 0.6% (1,700) 41.7% (3,475) 0.7%
Average (Risk rating 3-5) (1,839) 1.1% (11) 0.5% (430) 37.1% (2,280) 1.3%
Below average (Risk rating 6+) (167) 1.5% (66) 2.8% (589) 23.1% (822) 5.1%
Total impairment allowance (3,692) 0.6% (166) 0.9% (2,719) 35.0% (6,577) 1.0%
See note 14 for analysis of the movements in gross loan receivables and
impairment allowances in terms of IFRS 9 staging.
Analysis of credit quality of trade receivables:
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Status at balance sheet date:
Not past due, nor defaulted 3,984 2,545 3,125
Past due but not in default 345 584 58
Defaulted 230 19 133
Total gross carrying amount 4,559 3,148 3,316
Impairment allowance (422) (106) (216)
Carrying amount 4,137 3,042 3,100
See note 14 for analysis of the movements in gross trade receivables and
impairment allowances in terms of IFRS 9 staging.
Liquidity risk
Liquidity risk is the risk that the Group does not have sufficient financial
resources to meet its obligations as they fall due or will have to do so at an
excessive cost. This risk arises from mismatches in the timing of cash flows
which is inherent in all finance operations and can be affected by a range of
Group-specific and market-wide events.
Refer to the audited financial statement of the Group for the year ended 31
December 2024 for further details of the Group's approach to liquidity risk
management.
Market risk
Market risk is the risk that movements in market factors, such as foreign
exchange rates, interest rates, credit spreads, equity prices and commodity
prices will reduce the Group's income or the value of its assets.
The principal market risk to which the Group is exposed is interest rate risk.
The Group's treasury function is responsible for managing the Group's exposure
to all aspects of market risk within the operational limits set out in the
Group's treasury policies, with the overall objective of managing market risk
in line with the Group's risk appetite. The Asset and Liability Committee
approves the Group's treasury policies and receives regular reports on all
aspects of market risk exposure, including interest rate risk.
Refer to the audited financial statement of the Group for the year ended 31
December 2024 for further details of the Group's approach to market risk
management.
28. Earnings per share
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
Earnings attributable to ordinary shareholders £'000 £'000 £'000
Profit after tax attributable to the shareholders 6,606 6,731 14,021
Weighted average number of shares, thousands
Basic 179,369 179,369 179,369
Dilutive impact of share-based payment schemes 10,231 8,606 9,669
Diluted 189,600 187,975 189,038
Earnings per share, pence per share
Basic 3.7 3.8 7.8
Diluted 3.5 3.6 7.4
29. Related party disclosures
During the six months period ended 30 June 2025, related party transactions
have had no material effect on the financial position or performance of the
Group. The related party transactions remain similar in nature to those
disclosed in the audited financial statements of the Group for the year ended
31 December 2024.
30. Subsequent events
Subsequent to 30 June 2025, the Group agreed a VAT recovery, which is expected
to be approximately £1.4m with HMRC in respect of an updated Partial
Exemption Special Method. This amount was recognised after the reporting date
and is therefore not included in the results for the 6 months to 30 June 2025.
Alternative Performance Measures
Certain financial measures disclosed in the Interim Financial Report do not
have a standardised meaning prescribed by International Financial Reporting
Standards (IFRS) and may therefore not be comparable to similar measures
presented by other issuers. These measures (defined below) are deemed to be
Alternative Performance Measures ("APMs")
APMs may be considered in addition to, but not as a substitute for, the
reported IFRS results. The Group believes that these APMs together with the
other metrics presented above, when considered together with reported IFRS
results, provide stakeholders with additional information to better understand
the Group's financial performance.
Gross revenues (£m):
30 June 2025 30 June 2024 31 December 2024
6-month 6-month 12-month
(Unaudited) (Unaudited) (Audited)
Interest and similar income 43.9 37.7 76.8
Fee income 0.6 0.7 1.2
Fee expenses (0.8) (0.7) (1.6)
Net gains/(losses) on derivatives at fair value through profit or loss and (0.5) 0.2 0.4
other operating income
Total gross revenues (£m) 43.3 37.9 76.8
Sum of interest and similar income, fee income less fee expenses, net
gains/(losses) on disposal of financial assets at fair value through other
comprehensive income, net losses from derivatives measured at fair value
through profit or loss and other operating income.
Gross yield (%):
30 June 2025 30 June 2024 31 December 2024
6-month 6-month 12-month
(Unaudited)
(Unaudited)
(Audited)
Interest and similar income on loans and advances to customers (£m) 41.3 35.1 71.6
Fee income (£m) 0.6 0.7 1.2
41.9 35.8 72.8
Average gross receivables (£m) 689.7 591.0 595.0
Gross yield (%) 12.2% 12.1% 12.2%
The effective interest rate we charge our customers including fees.
Net interest margin (%):
30 June 2025 30 June 2024 31 December 2024
6-month 6-month 12-month
(Unaudited) (Unaudited) (Audited)
Total operating income (£m) 26.3 22.5 45.6
Add back: Fee expenses (£m) 0.8 0.7 1.6
Adjusted total operating income (£m) 27.1 23.2 47.2
Average gross receivables (£m) 689.7 591.0 595.0
Net interest margin (%) 7.9% 7.8% 7.9%
Total operating income adding back fee expense, as a % of gross receivables at
the year end.
Adjusted cost of risk (%):
30 June 2025 30 June 2024 31 December 2024
6-month 6-month 12-month
(Unaudited)
(Unaudited)
(Audited)
Impairment charges (£m) (2.2) (0.1) 0.2
Less: impact of RoyaleLife write-back in 2024 (£m) - (1.7) (4.7)
Adjusted impairment charge (£m) (2.2) (1.8) (4.5)
Average gross receivables (£m) 689.7 591.0 595.0
Adjusted cost of risk (%) (0.63%) (0.61%) (0.75%)
Impairments charges in the year adjusted for the RoyaleLife write-back in
2024, as a % of average gross receivables. No adjustment was required for
2025.
Cost to income ratio (%):
30 June 2025 30 June 2024 31 December 2024
6-month 6-month 12-month
(Unaudited)
(Unaudited)
(Audited)
Staff costs (£m) 9.5 7.8 16.0
Other operating expenses (£m) 5.6 5.4 10.7
Total operating expenses (£m) 15.1 13.2 26.7
Total operating income (£m) 26.3 22.5 45.6
Cost to income ratio (%) 57% 59% 59%
Total operating expenses as a % of total operating income.
Adjusted tangible net asset value per share:
30 June 2025 30 June 2024 31 December 2024
6-month 6-month 12-month
(Unaudited)
(Unaudited)
(Audited)
Total assets (£m) 832.0 706.2 786.5
Total liabilities (£m) (714.4) (598.6) (671.2)
Net assets (£m) 117.6 107.6 115.4
Less: Intangible assets (0.8) (0.6) (1.0)
Net assets less intangible assets (£m) 116.8 106.9 114.4
Period end number of shares in issue 179,369 179,369 179,369
Less: treasury shares ('000) (12,967) - -
Adjusted period number of ordinary shares outstanding excluding treasury 166,402 179,369 179,369
shares ('000)
Adjusted tangible net asset value per share (pence) 70.2p 59.6p 63.8p
Net assets less intangible assets divided by the period end number of shares
in issue during the year excluding treasury shares.
Impairment loss coverage on loans to customers (%):
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
7.8 8.0 6.6
Impairment allowance on loans and advances to customers (£m)
Gross carrying amount of loans and advances to customers (£m) 732.5 606.7 669.8
Impairment coverage on loans to customers (%) 1.06% 1.32% 0.98%
Impairment allowance as a % of gross carrying amount of loans and advances to
customers at the period end.
Adjusted return on customer assets (%)
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
Profit after tax (£m) 6.6 6.7 14.0
Less: post tax impact of RoyaleLife write-back in 2024 (£m) - (1.3) (3.5)
Adjusted profit after tax (£m) 6.6 5.4 10.5
Average gross receivables (£m) 689.7 591.0 595.0
Adjusted return on customer assets (%) 1.9% 1.8% 1.8%
Profit after tax adjusted for the RoyaleLife write-back in 2024, divided by
average gross receivables during the year.
Adjusted return on equity (%)
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
Profit after tax (£m) 6.6 6.7 14.0
Less: post tax impact of RoyaleLife write-back in 2024 (£m) - (1.3) (3.5)
Adjusted profit after tax (£m) 6.6 5.4 10.5
Average equity (£m) 116.9 103.6 107.4
Adjusted return on equity (%) 11.3% 10.5% 9.8%
Profit after tax adjusted for the RoyaleLife write-back in 2024, divided by
average equity during the year.
Adjusted basic earnings per share
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
Profit after tax (£m) 6.6 6.7 14.0
Less: post tax impact of RoyaleLife write-back in 2024 (£m) - (1.3) (3.5)
Adjusted profit after tax (£m) 6.6 5.4 10.5
Weighted average number of ordinary shares outstanding ('000) 179,369 179,369 179,369
Less: weighted average treasury shares ('000) (6,292) - -
Adjusted weighted average number of ordinary shares outstanding excluding 173,077 179,369 179,369
treasury shares ('000)
Adjusted basic earnings per share (pence) 3.8p 3.0p 5.9p
Adjusted basic EPS is calculated by dividing profit attributable to ordinary
equity holders of the Company adjusted for the RoyaleLife write-back in 2024,
divided by the weighted average number of ordinary shares outstanding during
the period less treasury shares held.
Adjusted profit before tax (£m)
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Audited)
Profit before tax (£m) 9.0 9.2 19.1
Less: pre-tax impact of RoyaleLife write-back in 2024 (£m) - (1.7) (4.7)
Adjusted profit before tax (£m) 9.0 7.5 14.4
Profit before tax adjusted for the RoyaleLife write-back in 2024. No
adjustment was required for 2025.
Regulatory capital (£m)
30 June 2025 30 June 2024 31 December 2024
(Unaudited)
(Unaudited)
(Unaudited)
Common Equity Tier 1 capital 101.7 90.0 98.8
Tier 2 capital 10.2 10.2 10.2
Regulatory capital (£m) 111.9 100.2 109.0
Regulatory capital is the Common Equity Tier 1 capital together with Tier 2
capital.
Number of dealers
Number of borrower relationships.
Number of manufacturer partners
Number of vendors and manufacturers with whom we have programs that support
our lending.
Total credit available to dealers
Amount of credit available to our customers to draw (uncommitted) including
existing drawings.
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