REG - Lendinvest PLC LendInvest PLC-LINV - Trading Update

LendinvestAnnouncement

10/10/2022 07:00

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RNS Number : 2497C  Lendinvest PLC  10 October 2022

LEI: 213800NWMK3O4UWP9N91

10 October 2022

 

LendInvest plc

H1 Trading Update

Our technology provides us with a competitive edge, as we grow across all
products

LendInvest plc (LSE: LINV; "LendInvest"), a leading technology driven asset
manager for UK property finance, announces its trading update for the six
months ended 30 September 2022.

Rod Lockhart, Chief Executive Officer of LendInvest, said:

"The UK property finance market is ripe for disruption and our performance
over the last six months reflects the attractiveness of our differentiated
technology-driven platform for borrowers and funding partners alike. We grew
across all lending products in the first half of the year, particularly in
Buy-to-Let, but also in Bridging and Development which benefited from our
innovative new broker portal. We remain on track to launch our Specialist
Homeowner product later this year.

"Looking ahead, we are acutely aware of the disruption in the UK mortgage
market, which is affecting confidence and for the moment, applications for new
mortgages have slowed across the market. Recent market dislocation has
demonstrated the flexibility and speed to market capability of our platform.
This provides us with a competitive edge, flexibility, and proven risk
management capabilities, which in addition to the size of our addressable
markets and our strong financial position, gives us confidence in our
long-term prospects."

Financial Highlights:

                         30 September 2022  30 September 2021  Growth  31 March  Growth

(£m)
(£m)

2022

(%)
(£m)
(%)
 Platform Assets under   2,431.1            1,825.9            +33%    2,146.1   +13%

Management

("Platform AuM")
 Funds under Management  3,442.1            2,875.2            +20%    2,936.6   +17%

("FuM")

 

 

 

Strategic Highlights:

LendInvest's disruptive approach driving growth in Platform AuM

●  Platform AuM, which represents deployed capital, increased by 33%
year-on-year, and by 13% since the start of the financial year, driven by
growth across all lending products.

●  The new bridging broker portal which enables a more seamless application
process drove the growth in bridging Platform AuM.

 

Continued growth, optimisation and diversification of FuM

●    FuM, which represents committed and deployed capital, increased by
20% year-on-year, and by 17% since the start of the year. We currently have
more than £950 million of lending headroom (31 March 2022: c.£793 million)
to support our growth trajectory in the medium term.

●   In May, we announced the completion of our fourth securitisation,
which comprised £270 million of prime Buy-to-Let mortgages in an
oversubscribed Residential Mortgage Backed Security (RMBS) transaction,
"Mortimer BTL 2022-1" with demand from a broad range of institutional
investors. The senior tranche was priced at 1.05% over SONIA.

●   In August, in line with our strategy to optimise FuM, while at the same
time selectively moving assets off balance sheet, we completed the sale of our
residual economic interest in the "Mortimer BTL 2022-1" securitisation for a
cash consideration of £5.8 million.

●    In line with our strategy of diversifying sources of FuM, in August
we issued our third listed bond from our second EMTN programme, the LendInvest
Secured Income II plc 6.50% bonds due 2027, raising £38 million in the
process with a further £22 million retained in treasury.

●   In September, Lloyds Bank, part of the UK's third largest banking
group, entered into a £180 million financial partnership to participate in
the growth of our BTL lending business and securitisation programme.

●   In September, we upsized the separate account we manage on behalf of JP
Morgan from £725 million to £1 billion, reflecting our strategy of
optimising FuM, while at the same time increasing the proportion of third
party managed assets, strengthening our asset management business model.

●   Investor appetite remains strong and we expect to complete a number of
additional transactions in the second half of the current financial year.

 

 

 

ESG

●   As part of our ongoing commitment to environmental improvement and
sustainability we are now carbon neutral.

Other

In September, we opened an office in Glasgow, Scotland and joined industry
body Fintech Scotland as part of our commitment north of the border. We
expanded the size of student lets that we support around major Scottish
universities as well as enabling access to funding for more landlords.

 

Outlook

There is considerable short term uncertainty around macroeconomic conditions.
Supported by our technology platform, we responded quickly to the volatile
market movements by ensuring that we re-priced our products and remained open
for new business. At the same time, we have tightened our credit appetite to
protect investor returns given the heightened risk of falling property
prices.

Platform AuM growth in the first half of the year was in line with market
expectation. The macro impact is likely to reduce the rate of growth
particularly in Buy-to-Let in the second half of the current year and we are
reducing our growth in operational expenditure accordingly.

We now expect that profit before tax for the full year will be in-line with
the previous year. We have taken this cautious approach mindful of the
significant difficulties in short term forecasting given the economic and
market backdrop.

We remain confident in our ability to deliver our future growth aspirations,
maintain our progressive dividend policy and deliver shareholder value. Our
proprietary technology gives us a significant competitive edge and provides us
with both flexibility and resilience; it enables us to adapt or launch new
products quickly in a fast-changing market; our launch into the £100 billion
specialist homeowner segment later this year is on track; we continue to
enhance our engagement with our client investors with a growing list of global
financial institutions; and our business is highly cash generative, has a
strong balance sheet, and more than £950 million of lending headroom.

Notice of Results

LendInvest will be releasing results for the six months to 30 September 2022
on 30th November 2022.

 

Enquiries:

 LendInvest via Tulchan Communications                                                                                                 +44 (0)20 7353 4200

 Rod Lockhart, Chief Executive Officer

 Michael Evans, Chief Financial Officer

 Alex Dee, Head of Investor Relations

 Leigh Rimmer, Senior PR Manager

 investorrelations@lendinvest.com
 Panmure Gordon (NOMAD and Joint Broker)                                                                                               +44 (0)20 7886 2500

 Atholl Tweedie / Charles Leigh-Pemberton
 finnCap Limited (Joint                                                                                                                +44 (0)20 7220 0500
 Broker)

 Jonny Franklin-Adams / Tim Redfern
 Tulchan Communications (Financial PR)                                                                                                 +44 (0)20 7353 4200

 Tom Murray / Ed Cropley/ Misha Bayliss / Olivia Lucas

 

About LendInvest

LendInvest is a technology-focused property finance asset manager in the
United Kingdom. Since inception we have developed proprietary technology and
digital solutions that have allowed us to capture market share from incumbents
and attract significant third-party capital.

We use our technology to disrupt the £1.6 trillion* property finance market
which is dominated by manual paper processes and poor customer care. Our
platform, unencumbered by legacy systems, offers attractive products and
pricing to borrowers and intermediaries through a seamless and
customer-focused process. In addition, it also provides us with a highly
scalable origination platform for future Platform AuM growth.

As an asset manager, we have designed a variety of investment solutions and
products for our investors. These range from funds and separate accounts to
financial partnerships and RMBS. These products are tailored to address their
specific risk return and investment criteria. Through the platform, investors
from around the world gain exposure to attractive UK property finance assets
without requiring them to establish direct lending operations or borrower
services.

Our innovative business model is underpinned by our proprietary end-to-end
technology infrastructure, which facilitates operating leverage and delivers
better pricing for our customers. This drives efficiency and underpins our
business' roadmap for growth.

*Source, FCA -The outstanding value of all residential mortgage loans was
£1.6 trillion at the end of Q2 2022.

 

Inside information

This announcement contains inside information for the purposes of Article 7 of
the UK version of EU Market Abuse Regulation (2014/596/EU).

 

Forward-looking statements

Certain statements in this announcement are forward-looking statements. In
some cases, these forward looking statements can be identified by the use of
forward looking terminology including the terms "anticipate", "believe",
"intend", "estimate", "expect", "may", "will", "seek", "continue", "aim",
"target", "projected", "plan", "goal", "achieve" and words of similar meaning
or in each case, their negative, or other variations or comparable
terminology. Forward-looking statements are based on current expectations and
assumptions and are subject to a number of known and unknown risks,
uncertainties and other important factors that could cause results or events
to differ materially from what is expressed or implied by those statements.
Many factors may cause actual results, performance or achievements of
LendInvest to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. Important
factors that could cause actual results, performance or achievements of
LendInvest to differ materially from the expectations of LendInvest, include,
among other things, general business and economic conditions globally,
industry trends, competition, changes in government and changes in regulation
and policy, changes in its business strategy, political and economic
uncertainty and other factors. As such, undue reliance should not be placed on
forward-looking statements. Any forward-looking statement is based on
information available to LendInvest as of the date of the statement. All
written or oral forward-looking statements attributable to LendInvest are
qualified by this caution. Other than in accordance with legal and regulatory
obligations, LendInvest undertakes no obligation to publicly update or revise
any forward-looking statement, whether as a result of new information, future
events or otherwise. Nothing in this announcement should be regarded as a
profit forecast.

 

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