Linv: Annual Financial Report
LENDINVEST SECURED INCOME III PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2026
Registered No: 16743095
Table of Contents
Officers and professional advisors
1
Strategic report
2
Directors' report
8
Directors' responsibility statement
11
Independent auditor's report to the members of LendInvest secured income III plc
12
Statement of profit and loss
19
Statement of other comprehensive income
20
Statement of financial position
21
Statement of changes in equity
22
Statement of cash flows
23
Notes to the financial statements
24
OFFICERS AND PROFESSIONAL ADVISORS
Directors Roderick Lockhart
Ian Thomas
Secretary Indigo Corporate Secretary Limited (Resigned 1 May 2026)
Gracie Governance Solutions Limited (Appointed 1 May 2026)
Company Number 16743095
Registered Office 4-8 Maple Street
London
England
W1T 5HD
Auditors BDO LLP
55 Baker Street
London
W1U 7EU
Banker HSBC Bank PLC
8 Canada Square
London
E14 5HQ
Strategic Report for the period ended 31 March 2026
The Directors present their strategic report for LendInvest Secured Income III PLC (the "Company") for the period ended 31 March 2026.
The Directors, in preparing this strategic report, have complied with section 414C of the Companies Act 2006.
The company was incorporated in England and Wales on 25 September 2025 as a public listed company with the registered number of 16743095.
Principal activity
The principal activity of the Company during the financial period was to provide secured property finance to third party borrowers in the United Kingdom on behalf of the LendInvest Group. This is now done both directly through underlying loans to third party borrowers, and indirectly where proceeds are used within an intermediary vehicle that feeds others, stretching the reach of the Company.
Performance in the period
The Company was incorporated on 25 September 2025. The Company subsequently issued a prospectus dated 13 October 2025 offering fixed rate secured loan notes to be listed on the London Stock Exchange's Order Book for Retail Bonds (ORB) market and guaranteed by the Company's parent, LendInvest plc.
As at 31 March 2026 the Company had £69.5 million of issued bonds by principal value outstanding. The company had a gross loan book of £18.0 million of which a £214k fair value adjustment was posted in the period.
The Company has a number of covenants which it is required to comply with as outlined in the prospectus issued on 13 October 2025. Quarterly, the Company is required to report to bondholders, an analysis of its loan portfolio, via the London Stock Exchange's Regulatory News Service and on the LendInvest website. These have all been complied with in the period to 31 March 2026.
The Company's Interest Coverage Ratio, which compares interest earned from borrowers to interest paid to bondholders, indicates that the Company's earnings from loans at the period end date, are expected to cover the cost of interest paid to bondholders 1.18 times.
The Company generated a profit after tax of £240k during the period.
Directors
The Directors of the Company who were in office during the period and up to the date of signing of the financial statements, were as follows:
Roderick Lockhart
Ian Thomas
Future outlook
The Company continues to invest in short term loans to property professionals and may issue further notes according to the strategy of the LendInvest Group (the "Group")
Strategic Report (Continued) for the period ended 31 March 2026
Principal risks and uncertainties
The Board has the overall responsibility for the establishment and oversight of the Company's risk management framework. The risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and ensure any limits are adhered to. The Company's activities are reviewed regularly, and potential risks are considered. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the competitiveness and flexibility of the business.
Creating a positive impact on the environment, the communities our borrowers serve, and our talented people is at the heart of our approach. From rewarding borrowers that use environmentally sound practices and contributing to social regeneration, to supporting our employees' career development and seek to do right by all of our stakeholders.
The Company has exposure to the following risks from its use of financial instruments: market, liquidity and credit risk:
Market risk management
There is a risk that the Company will be adversely hit by market rate or price movements. The company has fixed price liabilities which should mitigate any pressure from market risk on that side. The Company's assets are also fixed rate, but loan values will deviate through fair value adjustments should interest rates move. This is substantiated in note 10. We have continued to see elevated interest rates and inflation which are impacting our financing costs and operations. This pressure has alleviated through FY26 and resilient demand has been evident from a range of investors. The business continues to monitor the level of headline pricing, the size and nature of pipeline commitments and to seek to ensure refinancing transactions and contingencies are developed on a timely basis.
Strategic Report (Continued) for the period ended 31 March 2026
Liquidity risk management
There is a risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's position. The Company's liquidity position is monitored and reviewed on an ongoing basis by the Directors and the Assets and Liabilities Committee. The Company's strategy is to grow the portfolio and then periodically securitise the assets.
The table below analyses the Company's contractual undiscounted cash flows of its financial assets and liabilities:
Carrying amount
Gross nominal inflow/(outflow)
Amount due in less than six months
Amount due in six to twelve months
Amount due between one and five years
At 31 March 2026
Financial assets
Cash and cash equivalents
1,540
1,540
1,540
-
-
Receivables from related parties
53,289
76,907
2,553
4,908
69,446
loans and advances
18,192
19,581
5,251
14,330
-
Total
73,021
98,028
9,344
19,238
69,446
Financial liabilities
Other payables
(293)
(293)
(293)
-
-
Payables to related parties
(1,670)
(1,670)
(1,670)
-
-
Interest bearing liabilities
(69,870)
(96,067)
(2,874)
(2,858)
(90,335)
Total
(71,833)
(98,030)
(4,837)
(2,858)
(90,335)
Strategic Report (Continued) for the period ended 31 March 2026
Credit risk management
Credit risk is the risk that the Company's loans and advances are subject to borrower default. It arises principally from the Company's loans and advances to customers, receivables from related parties and cash and cash equivalents held at bank.
Credit risk management lies at the core of the business and the Company has continued to develop its strong credit risk management framework which includes:
· A clearly defined credit risk policy.
· The continued recruitment of specialist skills in credit underwriting.
· A Credit Committee which meets monthly.
· An Impairment and Modelling Committee - specifically formed for the governance of IFRS 9 - which meets quarterly.
In addition to managing the credit risk associated with borrowers, the Company manages other risks including:
Climate risk management
The Company gives consideration to climate risk also and as part of the Group.
The Company considers climate risk as part of the wider LendInvest Group approach. Emerging EPC legislation may require properties to hold a minimum EPC rating of C by 2026 in order to qualify for a mortgage or remain suitable for rental. We therefore monitor this risk closely, as energy-inefficient properties could become harder to refinance, increasing default risk at term. Our lending activity is closely tied to energy performance: by funding upgrades and retrofits, our products help borrowers meet evolving Minimum Energy Efficiency Standards ("MEES") and contribute to the transition to a lower-carbon housing stock.
Capital management
The Company considers its capital to comprise of its equity share capital plus retained earnings. The Company's objectives when maintaining capital are to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns to shareholders. The Company sets the amount of capital it requires in proportion to risk. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
Strategic Report (Continued) for the period ended 31 March 2026
Director's responsibilities under the Companies Act 2006
Under section 172 of the Companies Act 2006, a Director of a UK Company must act in the way they consider would be most likely to promote the long-term success of the Company while having regard to the interests of stakeholders and the broader impacts of our decisions. This section sets out how we have discharged those duties during the financial period ended 31 March.
We identify key stakeholder groups based on their direct influence on our ability to deliver our strategy and operate sustainably.
Customers and brokers
Why they matter:
Our customers - including landlords, developers and brokers - rely on our speed, technology and reliability to seize opportunities and scale portfolios.
How we considered their interests:
Customer and broker feedback directly informed enhancements to our digital mortgage portal and product offering. As market conditions evolved, we prioritised responsiveness, including rate reductions and faster decision-making to maintain customer confidence and trust.
Investors and capital partners
Why they matter:
We rely on continued confidence from institutional and retail investors to grow our lending platform and deliver shareholder value.
How we considered their interests:
The Board engaged regularly with shareholders and funding partners throughout the year, supporting a number of strategic milestones. These decisions were guided by our commitment to improving returns, reducing capital intensity and enhancing transparency across all aspects of reporting and investor communications.
Regulators
Why they matter:
Regulatory compliance is fundamental to our licence to operate and reputation as a responsible financial services provider.
How we considered their interests:
Our governance framework remained robust, with Board-level oversight of risk and compliance.
Suppliers and delivery partners
Why they matter:
Our third-party providers support key operational functions, from legal services to platform infrastructure.
How we considered their interests:
We engaged with our partners through structured reviews and clear commercial terms. As part of our continued digital investment, we strengthened several relationships to ensure delivery reliability and platform scalability, aligned with our capital-light strategy and customer expectations.
Strategic Report (Continued) for the period ended 31 March 2026
Director's responsibilities under the Companies Act 2006 (Continued)
Communities and the environment
Why they matter:
We recognise the impact of our activities on the communities we lend to and our responsibility to support environmental sustainability in the built environment.
How we considered their interests:
We continued to promote energy-efficient property financing across our product suite and maintained our carbon neutrality status for operational emissions. Board discussions included ESG progress updates and supported initiatives that contribute to the long-term resilience and sustainability of the housing sector.
The Board remains focused on acting in good faith, fairly between members, and in a manner aligned with our purpose, culture and long-term goals.
Key performance indicators
The Company uses key performance indicators to track progress against its plans. The performance of the main indicators in this reporting period were:
31 March 2026
Gross amounts of loans outstanding (£m)
18,003
Net amounts of loans outstanding (£m)
17,978
Expected credit loss provision (£k)
(25)
Cash not deployed (£k)
1,540
Euro Medium Term Note loan notes issued (£m)
69,479
Total loan losses realised (annualised %)
0.14%
Weighted average Loan to Value of loans (%)
73.7%
Profit before tax (£k)
320
For further details of the loan and ECL provision movements, please see note 8.
Events after the reporting date
There are no events after the reporting period that require disclosure.
Approved by the Board on 28 July 2026 and signed on its behalf by:
Roderick Lockhart
Director
Directors Report for the period ended 31 March 2026
The Directors present their report and the audited financial statements of the Company for the year ended 31 March 2026.
Future outlook
See strategic report on page 2. Principal risks and uncertainties. See strategic report on pages 3 to 5.
Going concern
The financial statements are prepared on a going concern basis. To assess the appropriateness of this basis, the Directors considered a wide range of information relating to present and future conditions, including the Company's current financial position and future projections of profitability, cash flows and capital resources.
The Company benefits from a Group support arrangement through its ultimate parent LendInvest plc as when required. The Directors believe the Group is well capitalised and efficiently funded, with sufficient levels of liquidity. The Directors have reviewed the Group's capital and liquidity plans, which have been stress tested under a range of severe but plausible scenarios as part of the annual planning process. The stressed forecasts indicate that under stressed scenarios the Group continues to operate with sufficient levels of liquidity and capital for the next 12 months.
The Directors also considered the impact of the funding lines maturing in the next 12 months from the date of approval of the financial statements. In line with the normal operations of the Group, there are a number of facilities which mature during this period. The Directors believe that the Group will be able to refinance these facilities either with the existing funding provider or with new third parties to continue its growth trajectory. A comprehensive review of all covenants attached to the listed bonds has also been conducted to ensure ongoing compliance with both under expected circumstances and potential stressed scenarios.
If these facilities were not to be refinanced, the Group would be able to sell individual loans or portfolio of loans to facilitate the repayment of the outstanding amounts. This strategy is in line with the existing approach of the Group to both hold assets on its balance sheet and sell to the third parties. The Directors do not consider that this creates a material uncertainty in the going concern assessment of the Group.
Based on the above, the Directors believe the Group has sufficient resources to continue its activities for a period of at least 12 months from the date of approval of these financial statements. Accordingly, the Directors have concluded that it is appropriate to adopt the going concern basis in preparing these financial statements. Through reliance on its ultimate parent, the Directors have concluded that it is appropriate to adopt the going concern basis in preparing these financial statements for the Company.
Results and dividends
The statutory profit after tax for the period ended 31 March 2026 amounted to £240k. The Company paid no dividends during the period and the Directors do not recommend a final dividend.
Director's responsibilities under the Companies Act 2006
See strategic report on pages 2 to 7.
Financial risk management objectives (including credit, market and liquidity risk)
See strategic report on pages 3 to 5.
Directors Report (Continued) for the period ended 31 March 2026
Political donations
No political donations were made during the period.
Events after the reporting date
On 6th July 2026 £25.0m of new funding was subscribed through Retail Bond 6 into the Company.
Directors
The Directors of the Company who were in office during the period and up to the date of signing of the financial statements, were as follows:
Roderick Lockhart
Ian Thomas
Directors Report (Continued) for the period ended 31 March 2026
Qualifying third party indemnity insurance
The Company has arranged qualifying third-party indemnity insurance for all its Directors.
Director confirmations
Each of the persons who is a Director at the date of approval of this report confirms that:
· so far as the Directors are aware, there is no relevant audit information of which the Company's auditor is unaware; and
· each Director has taken all the steps he/she ought to have taken as a Director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
The confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006.
Appointment of auditors
In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of BDO LLP as auditors of the Company is to be proposed at the forthcoming Annual General Meeting.
Approved by the Board on 28 July 2026 and signed on its behalf by
Roderick Lockhart
Director
DIRECTORS' RESPONSIBILITIES STATEMENT
The Directors are responsible for preparing the Directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that act the Directors have elected to prepare the financial statements in accordance with UK adopted International Accounting Standards. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and prudent;
· state whether they have been prepared in accordance with IFRS, subject to any material departures disclosed and explained in the financial statements; and
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LENDINVEST SECURED INCOME III PLC
Report on the audit of the financial statements
Opinion
In our opinion:
• the financial statements give a true and fair view of the state of Company's affairs as at 31 March 2026 and of its profit and cash flows for the period then ended;
• the Company financial statements have been properly prepared in accordance with UK adopted international accounting standards; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of LendInvest Secured Income III PLC (the 'Company') for the period ended 31 March 2026 which comprise of the following:
1
Statement of profit and loss
2
Statement of comprehensive income
3
Statement of financial position
4
Statement of changes in equity
5
Statement of cash flows
6
Notes 1 to 15 to the financial statements
7
Material accounting policy information
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remain independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by the FRC's Ethical Standard were not provided to the Company and we remain independent of the Company in conducting our audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included:
· reviewing minutes of meetings of those charged with governance and correspondence with regulators, such as the Financial Conduct Authority, for any factors which could be of higher risk in relation to going concern;
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LENDINVEST SECURED INCOME III PLC (CONTINUED)
· challenging the appropriateness of the Directors' assumptions and judgements made in the base forecast and stress-tested forecast. In doing so we agreed key assumptions such as forecast growth to historic actuals and relevant data and considered the historical accuracy of the Directors' forecasts by comparing them to actual results;
· enquiring with the Directors to determine whether there were any breaches of borrowing covenants within the period or subsequent to period end and the ability for the Company to meet the requirements of the covenants;
· performing a review of compliance with borrowing covenants which comprised obtaining and reviewing covenant compliance statements to verify that no covenant breaches have occurred which may trigger penalties or repayment of borrowings ahead of the maturity dates;
· obtaining and assessing the Directors plans in respect of funding lines which are approaching maturity within the next 12 months by considering the Company's past experience of extending the maturity of facilities, their discussions with new providers of funding and experience of portfolio sales;
· inspecting the latest post period end management accounts and reviewed minutes of the meeting to determine if there were any significant matters which could affect the going concern of the Company; and
· reviewing the going concern disclosure in note 1 to the financial statements to assess that it gives a complete and accurate description of the Directors' assessment of going concern.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Overview
Key audit matters
No key audit matter has been identified.
Materiality
£730,000 based on 1% of total assets
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the Company and its environment, the applicable financial reporting framework and the Company's system of internal control. We identified and assessed the risks of material misstatement of the Company's financial statements. We then applied professional judgement to focus our audit procedures on the areas that posed the greatest risks to Company the financial statements. We continually assessed risks throughout our audit, revising the risks where necessary, with the aim of reducing the Company's risk of material misstatement to an acceptable level, in order to provide a basis for our opinion.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LENDINVEST SECURED INCOME III PLC (CONTINUED)
How Climate change affected the scope of our audit
The Company has determined that climate change does not currently have a material impact on its operations. Our work on the assessment of potential impacts of climate-related risks on the Company's operations and financial statements included:
· Enquiries and challenge of management to understand the actions they have taken to identify climate-related risks and their potential impacts on the financial statements;
· Our own qualitative risk assessment taking into consideration the sector in which the Company operates and how climate change affects this particular sector;
· Review of the entity's loan book to identify collateral types and exposures vulnerable to climate related risks such as flooding and assess whether these factors materially impact expected recoveries and in turn the expected credit loss; and
· Review of the minutes of Board related to climate change and performed a risk assessment as to how this may affect the financial statements and our audit.
The management disclosures on page 5 form part of the strategic report. Our responsibilities in relation to these disclosures are described in the relevant section of this report and our procedures on these disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements or our knowledge obtained from the audit or otherwise appear to be materially misstated.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team.
We have determined that there are no key audit matters to be communicated in our report.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LENDINVEST SECURED INCOME III PLC (CONTINUED)
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:
2026
£
Materiality
£730,000
Basis for determining materiality
Materiality is based on 1 % of total assets.
Rationale for the benchmark applied
The entity is primarily an investment entity as it was established to issue listed debt and from its proceeds, issue financing to customers. As such a total assets basis, which in turns drives the funding of the entity, is considered to be the most appropriate.
Performance materiality
£547,500
Basis for determining performance materiality
75%
Rationale for the percentage applied for performance materiality
Determined on the basis of our risk assessment together with our assessment of the overall control environment
Reporting threshold
We agreed with the Board of Directors that we would report to them all individual audit differences in excess of £36,500. We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact
We have nothing to report in this regard.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LENDINVEST SECURED INCOME III PLC (CONTINUED)
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and Directors' report
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the Strategic report and the Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
· the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the Directors' report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
· the Parent Company financial statements are not in agreement with the accounting records and returns; or
· certain disclosures of Directors' remuneration specified by law are not made; or
· we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors' responsibilities statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company'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 audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LENDINVEST SECURED INCOME III PLC (CONTINUED)
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the Company and management.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
· Our understanding of the Company and the industry in which it operates;
· Discussion with management and those charged with governance; and
· Obtaining and understanding of the Company's policies and procedures regarding compliance with laws and regulations
· we considered the significant laws and regulations to be:
· London Stock Exchange Listing rules;
· UK tax legislation; and
· UK-adopted International Accounting Standards.
The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be the Financial Conduct Authority rules.
Our procedures in respect of the above included:
· enquires of management whether there were any litigations and claims;
· enquires of the legal team of the Company
· review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations;
· review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and regulations;
· review of financial statement disclosures and agreeing to supporting documentation;
· involvement of tax specialists in the audit; and
· review of legal expenditure accounts to understand the nature of expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:
· enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
· obtaining an understanding of the Company's procedures relating to:
o Detecting and responding to the risks of fraud; and
o Internal controls established to mitigate risks related to fraud.
· review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;
· discussion amongst the engagement team as to how and where fraud might occur in the financial statements; and
· performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LENDINVEST SECURED INCOME III PLC (CONTINUED)
Based on our risk assessment, we considered the area most susceptible to fraud to be management override of controls.
Our procedures in respect of the above included:
· testing journal entries throughout the period, which met a defined risk criterion, by agreeing to supporting documentation;
· Involvement of forensic specialists in the audit to review our risk assessment on fraud risks identified; and
· evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Other matters which we are required to address
We were appointed by the Board of Directors on 13 March 2026 to audit the financial statements for the period ended 31 March 2026.
Our audit opinion is consistent with the additional report to the Board of Directors.
Use of our report
This report is made solely to the Parent Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company's members those matters we are required to state to them in an auditor's 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 Parent Company and the Parent Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.15R - 4.1.18R, these financial statements will form part of the Electronic Format Annual Financial Report filed on the National Storage Mechanism of the FCA in accordance with DTR 4.1.15R - DTR 4.1.18R. This auditor's report provides no assurance over whether the Electronic Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R - DTR 4.1.18R.
Stefan Beyers (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, United Kingdom
28 July 2026
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
STATEMENT OF PROFIT AND LOSS
FOR THE PERIOD ENDED 31 MARCH 2026
Notes
2026
£'000
Interest income calculated using the effective interest rate
2,587
Interest expense and similar charges
4
(2,240)
Net Interest Income
347
Administrative expenses
(2)
Impairment provisions
8
(25)
Profit before tax
320
Tax charge
7
(80)
Profit for the year
240
All amounts relate entirely to continuing activities and to owners of the Company.
The notes on pages 24 to 50 form an integral part of these financial statements.
STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 MARCH 2026
Notes
2026
£'000
Profit for the period
240
Fair value gain on loans and advances measured at fair value through other comprehensive income
214
Deferred tax charge
(54)
Other comprehensive income
160
Total comprehensive profit for the period
400
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2026
Notes
2026
£'000
Assets
Cash and cash equivalents
1,540
Receivables from related parties
53,289
Loans and advances
8
18,192
Total assets
73,021
Liabilities
Other payables
(293)
Payables to related parties
(1,670)
Interest bearing liabilities
9
(69,870)
Deferred tax liability
(54)
Total liabilities
(71,887)
Net assets
1,134
Equity
Share capital
11
50
Fair value reserve
160
Capital contribution reserve
12
684
Retained earnings
12
240
Total equity
1,134
The notes on pages 24 to 50 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on 28 July 2026, they were signed on its behalf by:
Roderick Lockhart
Director
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2026
Share capital
£'000
Fair Value reserves
£'000
Retained earnings
£'000
Capital Contribution Reserve
£'000
Total
£'000
Balance as at 25 September 2025
-
-
-
-
-
Issue of share capital
50
-
-
-
50
Capital contribution from parent
-
-
-
684
684
Profit for the period
-
-
240
-
240
Other comprehensive income1
-
160
-
-
160
Total comprehensive income
-
160
240
-
400
Balance at 31 March 2026
50
160
240
684
1,134
1Other comprehensive income consists of fair value adjustments on loans and advances through OCI of £214k less deferred tax charge of £54k.
The notes on pages 24 to 50 form an integral part of these financial statements
STATEMENT OF CASH FLOW FOR THE PERIOD ENDED 31 MARCH 2026
Notes
2026
£'000
Cash flow from operating activities
Profit for the period
240
Adjusted for:
Tax charge
7
80
Impairment provision
8
25
Amortisation of pre-paid funding costs
111
Accrued interest expenses
4
2,129
Intercompany lending interest income
3
(1,796)
Working capital adjustments
Increase in loans and advances
8
(11,268)
Increase in receivables from related parties and other receivables
(4,696)
Increase in trade and other payables
1,883
Net cash flow used in operating activities
(13,292)
Cash flows from financing activities
Increase in interest bearing liabilities
9
24
Proceeds from an equity share issue
11
50
Proceeds from issuance of retail bonds
15,947
Cost of bond issuance
(1,189)
Net cash flow from financing activities
14,832
Net increase in cash and cash equivalents
1,540
Cash and cash equivalents at start of period1
-
Cash and cash equivalents at end of period1
1,540
Interest received was £2.5million and interest paid was £nil.
1Cash and cash equivalents wholly consists of cash held within bank accounts which is immediately accessible.
The notes on pages 24 to 50 form an integral part of these financial statements
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2026
1 Accounting policies
General information
LendInvest Secured Income III PLC is a public company limited by share capital which was incorporated on 25 September 2025 in England and Wales and is domiciled in the United Kingdom under the Companies Act 2006. The address of its registered office is given on page 1.
The principal activity of the Company was to provide secured lending to third party borrowers in the United Kingdom.
The Company is a 100% subsidiary of LendInvest Loan Holdings Limited (which is in turn a 100% subsidiary of LendInvest PLC) and its results are included in the consolidated financial statements of the Group.
Basis of accounting
The financial statements have been prepared in accordance with the Companies Act 2006 and the UK-adopted international accounting standards. These financial statements for the period ended 31 March 2026 are the first the Company has prepared in accordance with UK-adopted International Accounting Standards. The Company has applied IFRS (International financial reporting standards) 1, in the preparation of these financial statements.
The financial statements have been prepared on a historical cost basis, except as required in the valuation of certain financial instruments which are carried at fair value. The preparation of financial statements, in conformity with IFRS, requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 1. The financial statements have been prepared on a going concern basis, see note 1 for further details.
Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates ("functional currency"). The Company maintains its books and records in pound sterling ("£") and its financial statements are presented in pounds sterling, which is the Company's functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.
New standards not yet effective
The IASB has issued a number of amendments to reporting standards which the Company has determined as being applicable to its financial reporting. These amendments are effective in future accounting periods and the Company has not opted for any early adoption, with a full assessment to be carried out in subsequent periods. The following amendments are effective for the period beginning on or after 1 January 2027:
• IFRS 18 Presentation and Disclosure in Financial Statements; and
• IFRS 19 Subsidiaries without Public Accountability: Disclosures.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
1 Accounting policies - (continued)
Revenue recognition
Revenue represents interest and other income from borrowers and for the provision of finance. Revenue recognised on loans held by related and third parties is recognised as follows:
Recognised under IFRS 9
· Interest income calculated using the effective interest rate Interest on loans and advances made by the Company is recognised in the Consolidated statement of profit and loss using the effective interest rate method. Under the effective interest rate method fees earned from borrowers and transaction costs incurred which are integral to the creation of a loan such as arrangement, valuation and broker fees are amortised over the expected life of the loan.
Revenue comprises the fair value of the consideration received or receivable in the ordinary course of the Company's activities.
All revenue recorded in the financial statements is generated in the UK and sourced from transactions relating to property loans. Fees on these transactions are calculated based on the above revenue recognition policy.
Interest expense and similar charges
This represents interest expenses on interest bearing liabilities which are accounted for under IFRS 9 on an effective interest rate (EIR) basis, inclusive of directly attributable incremental transaction costs and fees including structuring fees, uncommitted fees, and set up costs (legal fees).
Administrative expenses
Expenses are recognised in the statement of profit and loss in the period in which they are incurred (on an accruals basis).
Cash and cash equivalents
Cash and cash equivalents comprise of cash balances and short-term balances that are highly liquid and are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Financial Instruments
As per IFRS 9, the Company classifies its financial instruments with reference to both the Group's business model for managing the assets and the contractual cash flow characteristics of the instrument.
Financial assets
(i) At amortised cost
These are assets for which the business model is to hold the asset and collect the contractual cash flows. The cash flows are solely payments of principal and interest and are on specified dates.
The Company measures cash and cash equivalents and trade and other receivables at amortised cost.
On initial recognition the asset is held at its fair value minus any transaction costs. Subsequent measurement is calculated on the effective interest rate method and is subject to impairment where the recoverable value falls below the carrying value. This assessment is performed quarterly.
(ii) At fair value through other comprehensive income
These are assets for which the business model is to collect the contractual cash flows and to sell the assets. The contractual cash flows are solely payments of principal and interest and are on specified dates.
The Company measures drawn loans and advances held under this business model at fair value through other comprehensive income.
These assets are initially recognised at fair value, plus any attributable costs. Subsequent changes in fair value are recognised in equity, except for impairment losses which are recognised in the Consolidated statement of profit and loss.
For further information on the measurement of impairment losses, please see note 8.
Upon derecognition, any accumulated movements in fair value previously recognised in equity (fair value reserve) are reclassified to profit or loss in the consolidated statement of profit and loss.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
1 Accounting policies - (continued)
Financial Instruments - (continued)
(iii) At fair value through profit or loss
These are assets for which the business model is neither to hold nor to hold or sell, or where contractual cash flows are not solely payments of principal and interest. The assets that result on origination of the loans are initially recognised at fair value, adjusting for the recorded fair value to date.
Financial liabilities
(iv) At amortised cost
All financial liabilities are measured at amortised cost, unless IFRS 9 specifically determines they should be valued at fair value through profit or loss. The Company holds trade and other payables and interest-bearing liabilities at amortised cost. On initial recognition the liability is held at its fair value plus any transaction costs. Subsequent measurement is based on the effective interest rate method.
(v) At fair value through profit or loss
Financial liabilities are measured at fair value through profit or loss when they meet the definition of held for trading, or when they are designated as such to eliminate or significantly reduce an accounting mismatch that would otherwise arise.
Forbearance
The Company maintains a forbearance policy for the servicing and management of customers who are in financial difficulty and require some form of concession to be granted, even if this concession entails a loss for the Company. A concession may be either of the following:
· A modification of the previous terms and conditions of an agreement, which the borrower is considered unable to comply with due to its financial difficulties, to allow for sufficient debt service ability, that would not have been granted had the borrower not been in financial difficulties; or
· A modification of the previous terms and conditions of an agreement, which the borrower is considered unable to comply with due to its financial difficulties, to allow for sufficient debt service ability, that would not have been granted had the borrower not been in financial difficulties; or
Forbearance in relation to an exposure can be temporary or permanent depending on the circumstances, progress on financial rehabilitation and the detail of the concession(s) agreed. The Company excludes short-term repayment plans that are up to three months in duration from its definition of forborne loans.
Modification of financial assets and financial liabilities
When a financial asset or financial liability is modified, a quantitative and qualitative evaluation is performed to assess whether or not the new terms are substantially different to the original terms. For financial assets, the Company considers the specific circumstances including:
· If the borrower is in financial difficulty, whether the modification merely reduces the contractual cash flows to amounts the borrower is expected to be able to pay;
· Whether any substantial new terms are introduced that substantially affects the risk profile of the loan;
· Significant extension of the loan term when the borrower is not in financial difficulty;
· Significant change in the interest rate; and
· Insertion of collateral, other security or credit enhancements that significantly affect the credit risk associated with the loan.
The Company specifically, but not exclusively, considers the outcome of the '10% test'. This involves a comparison of the cash flows before and after the modification, discounted at the original EIR (Effective interest rate), whereby a difference of more than 10% indicates the modification is substantial.
If the terms and cash flows of the modified financial instrument are deemed to be substantially different, the derecognition criteria are met and the original financial instrument is derecognised and a 'new' financial instrument is recognised at fair value. The difference between the carrying amount of the derecognised financial instrument and the new financial instrument with modified terms is recognised in the statement of profit and loss.
If the terms and cash flows of the modified financial instrument are not deemed to be substantially different, the financial instrument is not derecognised and the Company recalculates the 'new' gross carrying amount of the financial instrument based on the revised cash flows of the modified financial instrument discounted at the original EIR and recognises any associated gain or loss in the statement of profit and loss. Any costs and fees incurred are recognised as an adjustment to the carrying amount of the financial instrument and are amortised over the remaining term of the modified financial instrument by recalculating the EIR on the financial instrument.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
1 Accounting policies - (continued)
Financial Instruments - (continued)
Derecognition of financial assets and liabilities
Financial instruments are only derecognised when the contractual rights/obligations to receive/deliver cash flows from them have expired or when the Company has transferred substantially all risks and rewards of ownership.
Interest income and expense
Interest income and expense on all financial instruments is recognised in interest receivable or payable in the statement of profit and loss. Interest income, any fees considered an integral part of effective interest rate of the loan and interest expense are calculated using the effective interest rate method for financial assets and liabilities held at amortised cost and at FVOCI.
The effective interest rate method is a method of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortised cost of a financial liability.
Specifically, for loans and advances, the effect of this policy is to spread arrangement, broker and valuation fees, and costs directly attributable and incremental to setting up the loan, over the expected life of the contractual period.
Current and deferred tax
The tax expense for the period comprises current and deferred tax. Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the period end date.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affect neither accounting nor taxable profit and loss. Deferred tax is determined using tax rates and laws that have been enacted or substantially enacted at the year-end date and are expected to apply when the related deferred tax asset is realised, or the deferred tax liability is settled. Deferred tax balances are not discounted. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Going concern
The Directors have considered the Company's business activities alongside those of the Group's, together with the factors likely to affect its future development and position. The Company benefits from a Group support arrangement through its ultimate parent LendInvest plc when required.
In line with the normal operations of the Group, there are a number of facilities which mature during this period. The Directors believe that the Group will be able to refinance these facilities either with the existing funding provider or with new third parties to continue its growth trajectory. A comprehensive review of all covenants attached to the listed bonds has also been conducted to ensure ongoing compliance with both under expected circumstances and potential stressed scenarios.
Directors have a reasonable expectation that the Company will have adequate resources to continue to operate for a period of at least 12 months from the signing of these accounts including severe yet plausible downside scenarios that the Company will have sufficient funds to meets its liabilities as they fall due for that period. Therefore, it is on this basis that the Directors have continued to prepare the accounts on a going concern basis. More information on the Directors' assessment of going concern is set out in the Directors' report.
Write-offs
Loans and advances are written off (either partially or in full) when there is no reasonable prospect of recovery. This is generally the case when the primary security has been realised and the Company is unable to reach an agreement with the borrower for immediate or short-term repayment of the amounts subject to the write-off. Financial assets that are written off can still be subject to enforcement activities in order to recover amounts due. Amounts subsequently recovered on assets previously written off are recognised in impairment losses on financial assets in the statement of profit and loss.
Critical accounting estimates and judgements
The preparation of these financial statements in accordance with IFRS requires the use of estimates. It also requires management to exercise judgement in applying the accounting policies.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
1 Accounting policies - (continued)
Critical judgements in applying the Company's accounting policies
Significant increase in credit risk
The determination of how significant an increase in lifetime PD should be to trigger a move between credit risk stages for impairment requires significant judgement. Management have adopted a test-based approach to derive objective thresholds such that credit deterioration is recognised at the appropriate point. Similarly significant judgement is also applied when assessing the risk of a default occurring following the modification of a financial asset that does not result in derecognition.
Fair value measurement
Judgements were applied to determine the unobservable inputs to the fair value models used to calculate the fair values of loans and advances. These include the discount rate, prepayment rates, PDs, LGDs (Loss given default), recovery costs and cure probabilities driven from the ECL models.
Estimates and assumptions
Fair value measurement
A number of assets and liabilities included in the Company's financial statements require disclosure of fair value such as loans and advances and interest bearing liabilities. The fair value measurement of the Company's financial and non-financial assets and liabilities utilises market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are ('the fair value hierarchy'):
Level 1: Quoted prices in active markets for identical assets;
Level 2: Observable direct or indirect inputs other than Level 1 inputs;
Level 3: Unobservable inputs (i.e., not derived from market data and require a level of estimates and judgements within the model).
For further discussion around the key estimates and sensitivity, please refer to note 10.
Expected Credit Loss Calculation
The accounting estimates with the most significant impact on the calculation of impairment loss provisions under IFRS 9 are macroeconomic variables, in particular UK house price inflation and unemployment, and the probability weightings of the macroeconomic scenarios used. The Group has used three macroeconomic scenarios, which are considered to represent a range of possible outcomes over a normal economic cycle, in determining impairment loss provisions:
The baseline scenario reflects the most profitable economic outlook, the downside scenarios account for plausible stress conditions and an upside scenario representing the impact of modest improvements to assumptions used in the baseline scenario.
For the period ended 31 March 2026 management have applied 60%/10%/30% to the central, downside and upside scenarios respectively.
Changes to macroeconomic assumptions, as expectations change over time, are expected to lead to volatility in impairment loss provisions and may lead to pro-cyclicality in the recognition of impairment provisions.
Sensitivity Analysis
Sensitivity analysis on the ECL models has been completed. Due to the high number of loans which are individually assessed, the model demonstrates very low levels of sensitivity, as can be seen from the two changes below:
• An 10% increase in the forced sale discount. This would increase the ECL by £3k.
• A 100% downside was applied to all the models. This would increase the ECL by £7k.
• A 100% upside was applied to all the models. This would decrease the ECL by £8k.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
1 Accounting policies - (continued)
Critical judgements and accounting estimates - (continued)
Write-offs
Loans and advances are written off (either partially or in full) when there is no reasonable prospect of recovery. This is generally the case when the primary security has been realised and the Company is unable to reach an agreement with the borrower for immediate or short-term repayment of the amounts subject to the write-off. Write-offs constitute a derecognition event as detailed under Financial Instruments in note 1. Financial assets that are written off can still be subject to enforcement activities in order to recover amounts due. Amounts subsequently recovered on assets previously written off are recognised in impairment losses on financial assets in the statement of profit and loss.
Funding
All borrowings are initially recorded at fair value plus any transaction costs. Borrowings are subsequently measured using the effective interest rate method. The interest is calculated using effective interest rate method and recognised to the income statement over the period of the relevant borrowing.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
2 Financial risk management
The Board has the overall responsibility for the establishment and oversight of the Company's risk management framework. The risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and ensure any limits are adhered to. The Company's activities are reviewed regularly, and potential risks are considered. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the business's competitiveness and flexibility.
The Company has exposure to the following risks from its use of financial instruments: credit risk, liquidity risk, market risk:
Credit risk management
Credit risk is the risk that the Company's loans and advances are subject to borrower default. It arises principally from the Company's loans and advances to customers, receivables from related parties and cash and cash equivalents held at banks. The Company's maximum exposure to credit risk by class of financial asset is as follows:
2026
Assets
£'000
Gross loans and advances
18,003
Cash and cash equivalents
1,540
Receivables from related parties
53,289
Total
72,832
The Company manages its exposure to credit losses by assessing borrowers' affordability of loan repayments, risk profile, and stability during the underwriting process. Impairments are monitored and provided for under IFRS 9. The credit policy is designed to ensure that the credit process is efficient for the applicant while providing the Group with the necessary details to make an informed credit decision.
The fair value of cash and cash equivalents at 31 March 2026 approximates the carrying value. Credit risk relating to cash and cash equivalents is mitigated as cash and cash equivalents are held with reputable institutions. These institutions have a Moody's credit rating of Prime-1 (superior ability to repay short-term debt obligations).
The risk of movements in the price of the underlying collateral secured by the Company against loans to borrowers is actively managed by the Company. Security over loan collateral is registered with the Land Registry, and only properties within England, Wales and Scotland are suitable for security. Loans are capped at 85% of the open market value of the property against which security is held, and minimum loan period interest is retained on completion for some short-term loans.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
2 Financial risk management - (continued)
Liquidity risk management
There is a risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's position. The Company's liquidity position is monitored and reviewed on an ongoing basis by the directors and management.
The table below analyses the Company's contractual undiscounted cash flows of its financial assets and liabilities:
Carrying amount
Gross nominal inflow
/ (outflow)
Amount due in
less than six
months
Amount due in
six to twelve
months
Amount due
between one to
five years
At 31 March 2026
£'000
£'000
£'000
£'000
£'000
Financial assets
Cash and cash equivalents
1,540
1,540
1,540
-
-
Receivables from related parties
53,289
76,907
2,553
4,908
69,446
loans and advances
18,192
19,581
5,251
14,330
-
Total
73,021
98,028
9,344
19,238
69,446
Financial liabilities
Other payables
(293)
(293)
(293)
-
-
Payables to related parties
(1,670)
(1,670)
(1,670)
-
-
Interest bearing liabilities
(69,870)
(96,067)
(2,874)
(2,858)
(90,335)
Total
(71,833)
(98,030)
(4,837)
(2,858)
(90,335)
All gross nominal inflows and outflows on financial assets and financial liabilities are due within 5 years at the reporting date.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
3 Segmental analysis
The Company's lending operations are carried out solely in the UK, and were carried out solely from the Company's LendInvest Mortgages and Capital Divisions, reflective of the product offerings. The results and net assets of the Company are derived from the provision of property related loans only. The following describes the operations of the two reportable segments for the year ended 31 March 2026:
LendInvest Mortgages
LendInvest Mortgages provides a range of short term mortgages to customers.
LendInvest Capital
The LendInvest Capital division provides larger, more structured finance primarily to property developers and larger Bridging
loans and houses the Fund and Self-Select Platform.
Please see below for a segmental analysis of the profit and loss and statement of financial position balances:
Year ended 31 March 2026
Mortgages
Capital
Central
Total
Statement of profit and loss information
£'000
£'000
£'000
£'000
Interest income calculated using the effective interest rate
1,070
1,517
-
2,587
Interest expense and similar charges
(801)
(1,439)
-
(2,240)
Net interest income
269
78
-
347
Administrative expenses
(2)
-
-
(2)
Impairment provisions
(19)
(6)
-
(25)
Profit before tax
248
72
-
320
As at 31 March 2026
Mortgages
Capital
Central
Total
Statement of financial position information
£'000
£'000
£'000
£'000
Assets
Cash and cash equivalents
-
-
1,540
1,540
Receivables from related parties
-
-
53,289
53,289
Loans and advances
12,082
6,110
-
18,192
Total assets
12,082
6,110
54,829
73,021
Liabilities
Other payables
-
-
(293)
(293)
Payables from related parties
-
-
(1,670)
(1,670)
Interest bearing liabilities
(60,002)
(9,868)
-
(69,870)
Deferred tax liability
-
-
(54)
(54)
Total liabilities
(60,002)
(9,868)
(2,017)
(71,887)
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
4 Interest expense and similar charges
2026
£'000
Interest Expense
2,129
Funding Line Costs
111
2,240
5 Auditor's remuneration
2026
£'000
Audit of financial statements
35
35
Fees payable to the Company's auditors for audit services of £34,600 in the current year are borne by LendInvest PLC and disclosed in note 10 of the consolidated financial statements of the Group.
6 Staff costs
Key management personnel compensation
Key management personnel, whom are only the Directors, are those persons having authority and responsibility for planning, directing and controlling the activities of the Company.
2026
£'000
Salary, short-term benefits and pension
391
Equity Based compensation
252
643
The Company employed no employees for the year ended 31 March 2026. The Directors' emoluments are paid by LendInvest PLC for their work across all 26 Group Companies. The highest paid Director had emoluments of £536k for the period ended 31 March 2026.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
7 Taxation
Tax charge
The charge for the period in the statement of profit and loss and other comprehensive income
Tax related to items charged or credited to the statement of profit and loss:
2026
£'000
Current taxation
UK corporation tax
80
Deferred Taxation
Origination and reversal of temporary differences
-
Total deferred income tax charge
-
Total tax charge
80
Deferred tax
2026
£'000
Fair value movement on loans and advances
54
Tax charge in the statement of other comprehensive income
54
The tax on profit before tax for the period is the same as the standard rate of corporation tax in the UK of 25%. The differences are reconciled below:
2026
£'000
Profit before tax
320
Corporation tax at standard UK corporation tax rate of 25%
80
Total tax charge
80
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
8 Loans and advances
2026
£'000
Gross loans and advances
18,003
ECL provision
(25)
Fair value adjustment
214
Loans and advances
18,192
Fair value adjustment to gross loans and advances due to classification as FVOCI, based on the Company's business model for managing these financial assets.
ECL Provision
2026
£'000
Movement in the period
Under IFRS 9 at the beginning of the period
-
Additional provisions made during the period1
25
Utilised in the period2
-
Under IFRS at the end of the period
25
1The ECL provision of £25k is stated including the expected credit losses incurred on the interest income recognised on loans and advances. The net ECL impact on the statement of profit and loss is £25k. Expected credit losses have been calculated using internal modelling and outcome statements on the loans in question.
Loans that are written off can still be subject to enforcement activities in order to comply with the Company's procedures for recovery of amounts due. The contractual amount outstanding on loans and advances that were written off during the reporting period and are still subject to enforcement activity is nil.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
8 Loans and advances
Analysis of loans and advances by stage
Stage 1
Stage 2
Stage 3
Total
Period ended 31 March 2026
£'000
£'000
£'000
£'000
Gross loans and advances
11,978
6,025
-
18,003
ECL
(19)
(6)
-
(25)
Fair value adjustment
239
(25)
-
214
Loans and advances
12,198
5,994
-
18,192
The maximum LTV on stage 1 loans is 82%. The maximum LTV on stage 2 loans is 65%. The average LTV on stage 1 loans is 75%. The average LTV on stage 2 loans is 54% and total value of collateral (capped at the gross loan value) held on stage 3 loans is nil.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
8 Loans and advances
Movement analysis of Net loans by stage
Stage 1
Stage 2
Stage 3
Total
£'000
£'000
£'000
£'000
As at 25 September 2025
-
-
-
-
Transfer to stage 1
-
-
-
-
Transfer to stage 2
-
-
-
-
Transfer to stage 3
-
-
-
-
New financial assets originated
17,115
-
-
17,115
New financial assets originated and transferred to stage 2 & stage 3
(4,917)
4,917
-
-
Financial assets which have repaid
-
-
-
-
Balance movements in loans
-
1,077
-
1,077
Write-offs
-
-
-
-
Total movement in loans and advances
12,198
5,994
-
As at 31 March 2026
12,198
5,994
-
18,192
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
8 Loans and advances
Movement analysis of Gross loans by stage
Stage 1
Stage 2
Stage 3
Total
£'000
£'000
£'000
£'000
As at 25 September 2025
-
-
-
-
Transfer to stage 1
-
-
-
-
Transfer to stage 2
-
-
-
-
Transfer to stage 3
-
-
-
-
New financial assets originated
16,926
-
-
16,926
New financial assets originated and transferred to stage 2 & stage 3
(4,948)
4,948
-
-
Financial assets which have repaid
-
-
-
-
Balance movements in loans
-
1,077
-
1,077
Write-offs
-
-
-
-
Total movement in loans and advances
11,978
6,025
-
18,003
As at 31 March 2026
11,978
6,025
-
18,003
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
8 Loans and advances
Movement analysis of ECL by stage
Stage 1
Stage 2
Stage 3
Total
£'000
£'000
£'000
£'000
As at 25 September 2025
-
-
-
-
Transfer to stage 1
-
-
-
-
Transfer to stage 2
-
-
-
-
Transfer to stage 3
-
-
-
-
New financial assets originated
24
-
-
24
New financial assets originated and transferred to stage 2 & stage 3
(5)
5
-
-
Financial assets which have repaid
-
-
-
-
Changes in models / risk parameters
-
1
-
1
Adjustments for interest on impaired loans
-
-
-
-
Write-offs
-
-
-
-
Total movement in impairment provision
19
6
-
25
As at 31 March 2026
19
6
-
25
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
8 Loans and advances - (continued)
Credit risk on gross loans and advances
Risk grades detailed in the table range from 1 to 10 with a risk grade of 1 being assigned to cases with the lowest credit risk and 10 representing cases in default. Equifax Risk Navigator (RN) scores are used to assign the initial Risk Grade score with additional SICR rules used to generate the final Risk Grade.
As at 31 March 2026
Stage 1
£'000
Stage 2
£'000
Stage 3
£'000
Total
£'000
Risk Grades 1 - 5
-
-
Risk Grades 6 - 9
220
6,025
-
6,245
Default
-
-
-
-
Total
11,978
6,025
-
18,003
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
8 Loans and advances - (continued)
Impairment provisions are calculated on an expected credit loss ('ECL') basis. Financial assets are classified individually into one of the categories below:
Stage 1 - assets are allocated to this stage on initial recognition and remain in this stage if there is no significant increase in credit risk since initial recognition. Impairment provisions are recognised to cover 12-month ECL, being the proportion of lifetime ECL arising from default events expected within 12 months of the reporting date.
Stage 2 - assets where it is determined that there has been a significant increase in credit risk since initial recognition, but where there is no objective evidence of impairment. Impairment provisions are recognised to cover lifetime probability of default. An asset is deemed to have a significant increase in credit risk where:
· The creditworthiness of the borrower deteriorates such that their risk grade increases by at least one grade compared with that at origination
· The borrower falls more than one month in arrears
· LTV exceeds 85% for bridging loans
· LTGDV exceeds 75% for development loans
· The development will not meet practical completion by the date anticipated at origination.
· The loan is a short-term bridging loan and has less than one month before maturity
· The loan has previously been in arrears within the last 12 months on bridging loans
· The loan has gone past maturity on bridging with no authorised extension or is more than 21 days past maturity for development loans
Stage 3 - assets where there is objective evidence of impairment, i.e. they are considered to be in default. Impairment provisions are recognised against lifetime ECL. For assets allocated to stage 3, interest income is recognised on the balance net of impairment provision.
Purchased or originated credit impaired ('POCI') - POCI assets are financial assets that are credit impaired on initial recognition.
Where there is objective evidence that asset quality has improved, assets will be allocated to a lower risk category. For example, loans no longer in default (stage 3) will be allocated to either stage 2 or stage 1.
Evidence that asset quality has improved will include:
· repayment of arrears;
· improved credit worthiness; and
· term extensions and the ability to service outstanding debt.
If a loss is ultimately realised, it is written off against the provision previously provided for with any excess charged to the impairment provision in the statement of profit and loss.
Critical accounting estimates relating to the impairment of financial assets:
The calculation of ECLs requires the Company to make a number of assumptions and estimates. The accuracy of the ECL calculation would be impacted by movements in the forward-looking economic scenarios used, or the probability weightings applied to these scenarios and by unanticipated changes to model assumptions that differ from actual outcomes.
The key assumptions and estimates that, depending on a range of factors, could result in a material adjustment in the next financial year relate to the use of forward-looking information in the calculation of ECLs and the inputs and assumptions used in the ECL models.
Additional information about both of these areas is set out below.
Forward-looking information
The Company incorporates forward-looking information into the calculation of ECLs and the assessment of whether there has been a significant increase in credit risk ('SICR'). The use of forward-looking information represents a key source of estimation uncertainty.
The Company uses three forward-looking economic scenarios:
· a central scenario aligned to the Company's business plan;
· a downside scenario as modelled in the Company's risk management process; and
· an upside scenario representing the impact of modest improvements to assumptions used in the central scenario.
The macroeconomic data inputs applied in determining the Company's expected credit losses are sourced from Oxford Economics (a third-party provider of global economic forecasting and analysis).
Oxford Economics combines two decades of forecast errors with its quantitative assessment of the current risks facing the global and domestic economy to produce robust forward-looking distributions for the economy.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
8 Loans and advances - (continued)
Forward-looking information - (Continued)
Using specific percentile points in the distribution of several key metrics such as GDP, unemployment, house prices and commercial real estate prices, we receive three alternative scenarios relating to a base case (most likely), downside (broadly equivalent to a one in- ten-year event) and a moderate upside scenario. Our assumptions on the likely out-turn represents a weighted average of these three scenarios provided by Oxford Economics, and are detailed below:
Macro Assumptions
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Real GDP growth (% growth YoY)
Base
0.45%
1.43%
1.89%
1.56%
1.50%
1.51%
1.47%
1.47%
1.51%
1.52%
Upside
4.97%
3.25%
2.84%
1.71%
1.36%
1.37%
1.33%
1.33%
1.37%
1.37%
Downside
-3.93%
-0.60%
1.43%
1.53%
1.62%
1.63%
1.59%
1.59%
1.63%
1.63%
Unemployment % base
5.64%
5.31%
4.68%
4.42%
4.26%
4.09%
4.00%
4.00%
4.00%
4.00%
Upside
4.22%
2.94%
2.25%
2.17%
2.25%
2.41%
2.57%
2.72%
2.88%
3.03%
Downside
6.50%
7.01%
6.94%
6.60%
6.30%
6.06%
5.80%
5.64%
5.49%
5.34%
House price inflation base
0.89%
0.69%
3.82%
6.82%
6.46%
4.98%
3.90%
3.34%
3.33%
3.52%
Upside
4.55%
5.68%
8.01%
8.08%
6.20%
4.72%
3.64%
3.08%
3.06%
3.26%
Downside
-5.33%
-3.78%
-0.87%
6.09%
6.83%
5.35%
4.26%
3.70%
3.68%
3.87%
Commercial real estate (% growth YoY) base
4.58%
3.05%
2.35%
1.77%
1.51%
1.30%
1.09%
0.99%
1.00%
0.95%
Upside
15.12%
5.36%
2.45%
-0.50%
-0.44%
-0.10%
0.08%
0.25%
0.45%
0.55%
Downside
-4.94%
2.25%
3.54%
3.56%
3.07%
2.42%
1.89%
1.57%
1.43%
1.27%
GDP, unemployment rates and HPI (House price index) are key metrics that indicate the appetite for credit within the economy, the ability of borrowers to service debt and value of underlying securities that underpin credit risk management; all of which directly impact the Company's operational activities and success.
The probability weightings applied to the above scenarios are another area of estimation uncertainty. They are generally set to ensure that there is an asymmetry in the ECL. The probability weightings applied to the three economic scenarios used are as follows:
Period ended 31 March 2026
Base
60%
Upside
10%
Downside
30%
The Company undertakes a review of its economic scenarios and the probability weightings applied at least quarterly, and more frequently if required.
The results of this review are recommended to the Audit & Risk Committee and the Group's Board prior to any changes being implemented.
Critical judgements relating to the impairment of financial assets
The Company reviews and updates the key judgements relating to impairment of financial assets bi-annually, in advance of the Interim Financial Report and the Annual Report and Accounts. All key judgements are reviewed and recommended to the Audit & Risk Committee for approval prior to implementation.
Assessing whether there has been a significant increase in credit risk ('SICR')
If a financial asset shows a SICR, it is transferred to Stage 2 and the ECL recognised changes from a 12-month ECL to a lifetime ECL. The assessment of whether there has been a SICR requires a high level of judgement as detailed below. The assessment of whether there has been a SICR also incorporates forward-looking information.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
8 Loans and advances - (continued)
Assessing whether there has been a significant increase in credit risk ('SICR') - (continued)
The Company considers that a SICR has occurred when any of the following have occurred:
1. The overall credit worthiness of the borrower has materially worsened to a level that the probability of default has at least doubled. This is indicated by a migration to a higher risk grade (see below for risk grades and probability of default ("PDs") by product).
2. Where a borrower is currently a month or more in arrears.
3. Where the overall leverage of the account has surpassed a predetermined level - 75% Loan to Gross Development Value for development loans and 85% for bridging.
4. Where a development loan is over 21 days past maturity.
5. Where there is a material risk that a development loan will not reach practical completion on time.
These factors reflect the credit lifecycle for each product and are based on prior experience as well as insight gained from the development of risk ratings models (probability of default).
Stage 2 criteria are designed to be effective indicators of a SICR. As part of the bi-annual review of key impairment judgements, the Company undertakes detailed analysis to confirm that the Stage 2 criteria remain effective. This includes (but is not limited to):
· Criteria effectiveness: this includes the emergence to default for each Stage 2 criterion when compared to Stage 1, Stage 2 outflow as a percentage of Stage 2, percentage of new defaults that were in Stage 2 in the months prior to default, time in Stage 2 prior to default and percentage of the book in Stage 2 that are not progressing to default or curing.
· Stage 2 stability: this includes stability of inflows and outflows from Stage 2 and 3.
· Portfolio analysis: this includes the percentage of the portfolio that is in Stage 2 and not defaulted, the percentage of the Stage 2 transfer driven by Stage 2 criterion other than the backstops and back-testing of the defaulted accounts.
For low credit risk exposures, the Company is permitted to assume, without further analysis, that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the reporting date. The Company has opted not to apply this low credit risk exemption.
A summary of the Risk grade distribution is provided in the table below. As the Company utilises three different risk rating models, three separate PDs have been provided for each portfolio.
Risk Grades 1-9 are for non-defaulted accounts with 10 indicating default. Therefore, all Stage 3 loans are assigned to this grade.
As stated previously, degradation in a borrower's creditworthiness is an indication of SICR. Therefore, as shown in the table below, Stage 2 loan distributions are in the main assigned to risk grades higher than Risk Grade 1.
Balances (£'000)
ECL (£'000)
Probability of default
Risk Grade
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Bridging
Development
RG1
-
-
-
-
-
-
2.0%
0.1%
RG2
884
-
-
(1)
-
-
4.0%
0.4%
RG3
4,875
-
-
(4)
-
-
7.7%
0.6%
RG4
3,460
-
-
(8)
-
-
14.3%
1.2%
RG5
2,539
-
-
(5)
-
-
25.0%
2.3%
RG6
220
-
-
(1)
-
-
40.0%
4.1%
RG7
-
-
-
-
-
-
57.1%
7.2%
RG8
-
-
-
-
-
-
72.7%
11.6%
RG9
-
6,025
-
-
(6)
-
84.2%
18.9%
RG10
-
-
-
-
-
-
100.0%
100.0%
Total
11,978
6,025
-
(19)
(6)
-
-
-
Determining whether a financial asset is in default or credit impaired
When there is objective evidence of impairment and the financial asset is considered to be in default, or otherwise credit-impaired, it is transferred to Stage 3. The Company's definition of default follows product-specific characteristics allowing for the provision to reflect operational management of the portfolio. Below we set out a short description of each product type and the Company's definition of default as specific to each product.
Bridging Loans - Bridging loans are short-term loans designed for customers requiring timely access to funds to facilitate property purchases. Typically, loans involve residential securities, however, commercial, semi-commercial and land is also taken as security.
A bridging loan is considered to be in default if:
A. A borrower fails to repay their loan after 30 days and does not seek an authorised extension.
B. the loan is two months in arrears either in term or after expiry
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
8 Loans and advances - (continued)
Determining whether a financial asset is in default or credit impaired - (continued)
Development Loans - Development loans support borrowers looking to undertake a significant property or site development. The resulting site should be for residential purposes only. Loan terms are typically for the short term (less than three years) with no structured repayments. A development loan is defined as being in default if it has not been redeemed 60 days after the maturity of the loan.
The Company does not apply the rebuttable presumption that default does not occur later when a financial asset is 90 days past due.
Improvement in credit risk or cure - There is no cure period assumed for loans showing improvement in credit risk. This means that any loan that does not meet the SICR criteria is assigned to Stage 1.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
9 Interest bearing liabilities
2026
£'000
Interest bearing liabilities due within twelve months
2,089
Interest bearing liabilities due after one year but less than five years
68,859
Funding line costs1
(1,078)
69,870
1 Funding line costs represent transaction costs incurred in issuing the retail bonds.
Interest bearing liabilities as at 31 March 2026 relate to Retail Bond 5. In November 2025, Lendinvest Secured Income III PLC exchanged £53,532,600 of Retail bond 5 with Lendinvest Secured Income II PLC's Retail Bond 3 and Retail Bond 4 for £17,024,700 and £34,948,900 respectively. The remaining £15,946,500 principal interest bearing liabilities was received from third parties.
Funding line costs are amortised on an effective interest rate basis.
Net debt represents interest bearing liabilities (as above), less cash at bank and in hand and excluding unamortised debt issue costs but including accrued interest relating to the Company's third-party indebtedness. A reconciliation of net debt is:
2026
£'000
Interest bearing liabilities
69,870
Deduct: cash as reported in financial statements
(1,540)
Net debt: borrowings less cash
68,330
Add: unamortised funding line costs
1,078
Total
69,408
2026
£'000
Interest bearing liabilities
-
Cash flows
14,758
Movement in accrued interest
2,129
Amortisation of funding line costs
111
Increase in interest bearing liabilities
52,872
Total
69,870
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
10 Financial Instruments
The principal financial instruments used by the Company, from which financial instrument risk arises, are loans and advances, trade and other receivables, cash and cash equivalents, interest bearing liabilities and trade and other payables.
Categorisation of financial assets and financial liabilities
All financial assets of the Company are carried at amortised cost or fair value through other comprehensive income as at 31 March 2026. All financial liabilities of the Company are carried at amortised cost as at 31 March 2026.
Financial instruments measured at amortised cost
Financial instruments measured at amortised cost, rather than fair value, include cash and cash equivalents, trade and other receivables, trade and other payables and interest-bearing liabilities. Due to their short-term nature, the carrying value of cash and cash equivalents and trade and other payables approximates their fair value.
a) Carrying amount of financial instruments
A summary of the financial instruments held is provided below
2026
£'000
Financial assets not at fair value through profit and loss
Cash and cash equivalents (At amortised cost)
1,540
Other receivables and receivables from related parties (At amortised cost)
53,289
Loans and advances (At fair value through other comprehensive income)
18,192
Total financial assets
73,021
Other payables
293
Payables to related parties
1,670
Interest bearing liabilities
69,870
Total financial liabilities
71,833
The following table compares the carrying amounts of the Company's financial assets and financial liabilities as at 31 March 2026
2026
2026
£'000
£'000
Carrying amount
Fair value
Cash and cash equivalents
1,540
1,540
Receivables from related parties
53,289
52,148
Loans and advances
18,192
18,192
Total financial assets
73,021
71,880
Financial liabilities not at fair value through the profit and loss
Other payables
293
293
Payables to related parties
1,670
1,670
Interest bearing liabilities
69,870
73,548
Total financial liabilities
71,833
75,523
The fair value of the Retail Bond 5 interest bearing liability is calculated based on the mid-market price of £102.85 on 31 March 2026.
As per IFRS 9, loans and advances are classified as fair value through other comprehensive income and any changes to fair value are calculated based on the fair value model and are recognised through the statement of other comprehensive income.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
10 Financial Instruments (Continued)
b) Fair value hierarchy
The level in the fair value hierarchy within which the financial asset or financial liability is categorised is determined on the basis of the lowest level input that is significant to the fair value measurement. Financial assets and liabilities are classified in their entirety into only one of the three levels. The fair value hierarchy has the following levels:
Level 1 - quoted prices in active markets for identical assets;
Level 2 - observable direct and indirect inputs other than level 1 inputs;
Level 3 - unobservable inputs (i.e., not derived from market data and require a level of estimates and judgements within the model).
The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.
As at 31 March 2026
Financial instruments measured at fair value
Total
Level 1
Level 2
Level 3
£'000
£'000
£'000
£'000
Loans and advances
18,192
-
-
18,192
Financial instruments disclosed at amortised cost
Interest bearing liabilities
(69,870)
(69,870)
-
-
Receivables from related parties
53,289
-
-
53,289
Payables to related parties
(1,670)
-
-
(1,670)
For all other financial instruments, the fair value is equal to the carrying value and has not been included in the table above.
The valuation techniques and significant input used in determining the fair value measurement of level 3 financial instruments are below.
Level 3 instruments include loans and advances. The valuation of the asset is not based on observable market data (unobservable inputs). Valuation techniques include net present value and discounted cash flow methods. The assumptions used in such models include benchmark interest rates and borrower risk profile. The objective of the valuation technique is to determine a fair value that reflects the price of the financial instrument that would have been used by two counterparties in an arm's length transaction.
Level 3 financial instruments
Year ended 31 March 2026 £'000
Level 3 assets at the beginning of the period
-
Additional impairment provision made during the period
(25)
Impairment provision utilised in the period
-
Fair value adjustments on loans through OCI
-
New level 3 assets originated
17,115
Level 3 assets that have repaid
-
Balance movements in level 3 loans
1,102
Level 3 assets at the end of the period
18,192
Financial instrument
Loans and advances
Valuation techniques used
Discounted cash flow valuation
Significant input
Discount rate
Range
4% - 12%
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
10 Financial instruments - (continued)
c)
Fair Value reserve
Financial assets
Deferred tax
Fair value reserve
£'000
£'000
£'000
Balance as at 25 September 2025
-
-
-
Movement in fair value adjustment for loans and advances at fair value through other comprehensive income
214
(54)
160
Fair value reserve at 31 March 2026
214
(54)
160
The significant input used in the fair value measurement of the reporting entity's loans and advances is discount rates. A significant increase / (decrease) in this input in isolation would result in a lower / (higher) fair value measurement.
d)
Fair Value through OCI sensitivity analysis
Discount rate
Gain or loss as at 31 March 26
+100bps
-100bps
£'000
£'000
Impact of changes in significant inputs
(101)
102
e)
Interest rate sensitivity
The significant unobservable inputs used in the fair value measurement of the reporting entity's loans and advances are prepayment rates, discount rates and probability of default. Significant increase / (decrease) in discount rates of those inputs in isolation would result in a lower / (higher) fair value measurement. A change in the assumption of these inputs will not correlate to a change in the other inputs. The impact of changes in observable inputs shown in sensitivity analysis below will be reported through other comprehensive income.
As at the reporting date, if interest rates increased 100 basis points and all other variables were held constant:
• Profit before tax for the period to 31 March 2026 would be unchanged. Although the Company's interest rates on loans to borrowers is operated as a fixed rate, the Company has the legal right to vary the borrower interest rate if certain changes in interest rates occur. Implementing this provision would improve the impact of an interest rate increase. However, we have assumed in this sensitivity analysis that the Company has not implemented this provision. Loans from lenders are fixed rate denominated.
• Movement in equity reserves as at 31 March 2026 refer to d) above.
If interest rates reduced by 100 basis points and all other variables were held constant:
• Profit before tax for the period to 31 March 2026 would be unchanged. As noted above, the Company's interest rates on loans to borrowers are fixed rate denominated, with certain provisions to vary them, while loans from lenders are also fixed rate denominated.
• Movement in equity reserves as at 31 March 2026 refer to d) above.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
11 Share capital
2026
No.
£'000
Issued ordinary shares of £1 each
50,000
50
The company has one class of ordinary shares which carry no rights to fixed income.
12 Reserves
The company's other reserves are as follows:
Retained earnings:
The retained earnings reserves represent cumulative profits or losses, net of dividends and other adjustments
2026
£'000
Retained earnings
240
Other reserves:
The other reserves represent movements on the fair value of the financial assets classified as FVOCI and the capital contribution reserve
2026
£'000
Fair value reserve
160
Capital contribution reserve
684
The capital contribution reserve relates to the 20% partial financial guarantee the Company has received from LendInvest PLC. This is the initial fair value of the partial guarantee provided on the listed bonds within the Company. A reciprocal entry has been posted against the interest bearing liability to represent the day 1 fair value of the bonds. This will amortise over the life of the listed bond to converge the carrying value back to the nominal price.
NOTES TO THE FINANCIAL STATEMENTS - (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2026
13 Related party transactions
2026
Intercompany interest income
£'000
Lendinvest Bridge Limited
735
Lendinvest Warehouse Limited
73
Lendinvest Platform Limited
988
Intercompany receivable/(payable) balances
Lendinvest PLC
(259)
Lendinvest Bridge Limited
2
Lendinvest Bridge Limited
(1,411)
Lendinvest Bridge Limited (interest bearing)
28,546
Lendinvest Development Limited
73
Lendinvest Development Limited (interest bearing)
2,374
Lendinvest Warehouse Limited
735
Lendinvest Warehouse Limited (interest bearing)
20,000
Lendinvest Secured Income II PLC
1,559
All of the above are sister Companies within the LendInvest Group with the exception of LendInvest PLC which is the Company's ultimate parent. All the above balances are unsecured intercompany balances payable on demand, except for those that are interest bearing. These have an interest rate of 10% with a receivable date of 18th November 2030. Those not interest bearing are due to cash movement across the LendInvest Group.
2026
Transfer of loan balances between the Company and related parties
£'000
Total value of loan balances transferred to the Company from related parties during the period
70,062
Total value of loan balances transferred from the Company to related parties during the period
49,034
14 Ultimate controlling party
The controlling party is LendInvest Loan Holdings Limited, and the ultimate controlling party is LendInvest PLC whose consolidated financial statements are available at the registered address.
15 Events after reporting date
On 6th July 2026 £25.0m of new funding was subscribed through Retail Bond 6 into the Company.
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