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RCS - Together Fin. Svc. - Full Year Results

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RNS Number : 9316Z  Together Financial Services Limited  20 September 2022

Together Financial Services Limited

20 September 2022

Together Financial Services Limited

Full Year Results

20(th) September 2022

Together Financial Services Limited ('Together' or 'the Group'), one of the
UK's leading specialist mortgage and secured loan providers, is pleased to
announce its results for the year ended June 30, 2022.


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

"Together delivered another very strong performance in the year to 30 June as
we capitalised on our diverse proposition to increase lending to a wide range
of customers, growing our loan book to a new high of £5.3bn and achieving
underlying profit before tax of £162.7m. This growth was achieved in a
controlled and sustainable way, in line with our strategy and prudent risk
appetite, with our loan book average LTV remaining at a very conservative
51.5% and our arrears consistently low.

"We continued to make great progress in implementing our strategic agenda to
deliver transformational change, drive efficiency benefits to further enhance
the experience for our customers and create an agile and rapidly scalable
platform to set the business up for the next phase of its growth. This
included expanding our channels to increase access to our markets to
sustainably grow our lending, formalising our ESG strategy to help deliver our
environmental and social responsibilities in line with our purpose and vision
and empowering our colleagues to grow and deliver value to our stakeholders.
To support our expected growth opportunities we also raised or refinanced over
£4.1bn of facilities during the year.

"The UK's economic outlook has become more uncertain as global supply chain
disruption and rising inflation have led to a tightening of monetary policy
and increasing interest rates. As a result of these headwinds many more
customers may find themselves underserved by mainstream lenders and look to
specialist lenders to help them to solve problems and realise opportunities.
With a multi-cycle track record, a clear purpose, our transformation
programmes well underway and strong diversified funding in place, Together
remains well placed to help increasing numbers of customers realise their
ambitions and to play our part in supporting the UK economy."

Financial highlights: year ended June 30, 2022

·      Record originations driving strong loan book growth

-       Average monthly loan originations of £226.8m, up 132.5% (2021:

§ Weighted average origination LTVs remain conservative at 61.0% (2021:

§ New lending exceeded £300m in May (£300.1m) and June (£304.1m)

-       Group net loan book increased 30.8% to £5.2bn (2021: £4.0bn)

§ Weighted average indexed LTV remains very conservative at 51.5% (2021:

§ Impairment coverages remain very low at 1.6% (2021: 2.5%) reflecting
quality of loan portfolio

·      Another robust financial performance

-       Interest receivable and similar income up 6.1% at £393.4m
(2021: £370.9m)

-       Underlying net interest margin remains attractive at 5.5% (2021:
6.2%), with compression during the year reflecting a change in product mix and
the impact of the extent and timing of rising interest rates

-       Annualised cost of risk has decreased to 0.1% (2021: 0.4%) due
to a reduced impairment charge during the year.

-       Underlying profit before tax was up 8.7% to £162.7m (2021:

Cash generation remains robust, with cash receipts of £1.9bn (2021: £1.7bn)
as redemption levels remained strong

 Key metrics                                                        2022                                          2021

 Interest receivable and similar income (£m)                        393.4                                         370.9
 Underlying interest cover ratio 1  (#_ftn1)                        2.2:1                                         2.3:1
 Interest cover ratio                                               2.1:1                                         2.3:1
 Underlying net interest margin 2  (#_ftn2) (%)                     5.5                                           6.2
 Net interest margin (%)                                            5.5                                           6.1
 Underlying cost-to-income ratio1 (%)                               35.1                                          35.9
 Cost-to-income ratio (%)                                           39.4                                          34.1
 Cost of risk (%)                                                   0.1                                           0.4
 Underlying profit before taxation1 (£m)                            162.7                                                    149.7
 Profit before taxation (£m)                                        151.5                                                    150.3
 Underlying EBITDA1                                                 306.5                                         272.6           272.6
 Loans and advances to customers (4) (£m)                           5,247.9                                               4,011.9
 Net debt gearing (%)                                               79.7                                          75.6
 Shareholder funds 3  (#_ftn3) (£m)                                         1,030.0                                          937.0
 Underlying return on equity1 (%)                                   13.8                                          14.5
 Return on equity (%)                                               12.9                                          14.7


Operational highlights

·      Shaping our business for an exciting future

-       Strong progress in embedding and bringing our new purpose to
life across Together

-       Successfully revised and expanded our sales channels to increase
our addressable market to sustainably grow lending

-       Continued to implement our transformational change agenda with
focus on:

§ Delivering the right experience for our customers by transforming the
application journey and allowing colleagues to refocus where they can best
utilise their experience and expertise

§ Enabling a scalable cost base to allow Together to enter new markets with
different price points, complementing our already-established service, speed
and distinctive product offering

§ Building our capacity to increase agility and flexibility to reduce the
time from idea to implementation and remove barriers to scalability

-       Launched new corporate website providing a new and improved
online customer journey

·      Formalising our approach to sustainability

·      Developed a comprehensive ESG strategy that builds on our ongoing
work and recognises the overarching importance of our environmental and social
responsibilities in line with our purpose and vision

§ Identified targets and measures for four key priority areas; our planet,
our customers, our colleagues and our community, which are all underpinned by
strong governance

§ Devised a Diversity and Inclusion strategy, committing to targets focused
on gender, age, ethnicity and disability by 2026

§ Published our first Sustainability Report setting out our approach to


Funding highlights

·      Significantly increased the scale, diversity and maturity of our

-       Successfully raised or refinanced £4.1bn of facilities across 9
transactions to support the Group's growth ambitions:

§ Jul'21: launched £96.2m BABS, our first dedicated facility for
non-performing loans;

§ Sep'21: refinanced £525m HABS small balance commercial real estate
warehouse facility extending maturity to September 2025;

§ Sep'21: issued inaugural 1st charge only RMBS, TABS 5, for £318m;

§ Nov'21: issued additional £120 million in aggregate principal amount of 4
7/8% Senior Secured Notes due 2026 at issue price of 100.5%, upsized in market
from £100 million;

§ Dec'21: Delta ABS 2 upsized from £200m to £400m;

§ Mar'22: £1.25bn CABS facility refinanced as CABS 2, extending maturity
from Sep '23 to Mar '27 with significantly improved commercial terms;

§ Apr'22: refinanced LABS securitisation, upsizing facility from £500m to
£700m with improved commercial terms and maturity extended from Oct '23 to
Apr '26;

§ May'22: issued our £349m inaugural second charge-only RMBS;and

§ Jun'22: issued third public small balance commercial real estate, CRE 3,
for £365.2m.

-       Additionally, in Nov'21 Bracken Midco1 PLC successfully issued
£380m 2027 Senior PIK Toggle Notes as part of the refinancing of its existing
£368.2 million aggregate principal amount of Senior PIK Toggle Notes due
2023, reducing cash coupon from 8.875% to 6.75%.

-       Facility Headroom of £1.4bn at June 30, 2022 (June 30, 2021:
£1.4bn) and accessible liquidity of £406.9m at June 30, 2022 (June 30, 2021:

-       Weighted average maturity of the Group's funding profile was 3.9
years as at June 30, 2022 based on amounts drawn.

-       Maintained fund raising and refinancing momentum post year end:

§ Jul'22: issued £499.4m TABS 7, our largest ever RMBS

§ Sep'22: amended and restated BABS facility, adding an additional £24m of
funding and extending maturity to Mar' 27

§ Sep'22: Upsized our revolving credit facility from £ 71.9m to £138.25m,
extending maturity to Sep'26

·      Positive actions taken have resulted in improved corporate credit

-       Oct '21: Outlook revised from negative to stable by Fitch

-       Jan '22:  Outlook revised from stable to positive by S&P

Full Year 2021/22 results presentation

Together will be presenting its Full Year 2021/22 results via audio webcast
today at 14:00 BST (9:00 EST), for the year ended June 30, 2022.


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


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


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



It will also be accessible via a live conference call:

·      Access code: 726016

·      From the UK: 020 3936 2999 / 0800 640 6441

·      From outside the UK: +44 20 3936 2999


For further enquires please contact:

 Mike Davies, Director of Corporate Affairs  + 44 7753 138185

                                             mike.davies@togethermoney.com (mailto:mike.davies@togethermoney.com)

 Abena Affum, Corporate Affairs Manager      +44 7542 862956
                                             abena.affum@togethermoney.com (mailto:abena.affum@togethermoney.com)

 Camarco (Financial PR)

 Ben Woodford

                                             +44 2037818333

 Eddie Livingston-Learmouth                  ben.woodford@camarco.co.uk (mailto:ben.woodford@camarco.co.uk)

                                             +44 2037574993


About Together

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

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

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

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



 1  (#_ftnref1) June 30, 2022 excluded £1.2m customer redress provision
release, £7.9m costs associated with a strategic review of the business and a
£4.5m share-based payment charge whilst June 30, 2021 excluded £8.2m
customer redress provision release, £1.7m redundancy costs and £5.9m
interest payable relating to the refinance of the 2024 SSN.

 2  (#_ftnref2) There are no exceptional items impacting upon net interest
income recorded in the current year to June 30 2022 however in the prior year
to June 30 2021, net interest income excluded £5.9m costs associated with the
refinancing of the 2024 SSN.

 3  (#_ftnref3) Includes subordinated shareholder loans of £31.4m (2021:

4 Net loan book is the net of gross loans and advances to customers and
impairment allowances.

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