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RNS Number : 7504E  Sancus Lending Group Limited  15 March 2022

15 March 2022

 

Sancus Lending Group Limited

("Sancus", the "Company" or "Group")

 

Trading Update

 

 

Sancus today announces an update on trading in the financial year to 31
December 2021.

 

Based on its unaudited financial results for the year, Sancus is expected to
generate revenue of approximately £9.0m for FY21 (FY20: £10.9m), slightly
below prior expectations.  The Group expects to record a net operating loss
for FY21 of approximately £10.3m (FY20: loss £14.5m).

 

The reduction in revenue is, in part, due to a decrease in the loan book,
falling 17% to £141m in FY21 (FY20: £171m) and from the knock-on impact of
Covid on new loans written, delayed loan closures, and therefore reduction in
associated transactional fees.  The reduction in the loan book has largely
been seen in the offshore jurisdictions of Jersey, Guernsey and Gibraltar that
were impacted by a significant restructuring of their management teams.

 

Following Rory Mepham's appointment as CEO in June 2021, a detailed evaluation
of the Group's loan book was completed.  Particular focus was given to
reviewing historic loans that were either delinquent or defaulted. As a result
of this exercise, the Group expects to report an increase in credit loss
provisions of £6.5m for the FY21 (FY20: £4.7m). Virtually all of the
provisions made relate to legacy loans written in 2018, or prior to 2018. For
all of the impacted legacy loan positions, the new senior management team have
put together deliverable workout strategies and these are now underway. The
seasoned property professionals within the new Sancus team will continue
working hard to recover value for all participants in these positions.

 

Since his appointment as CEO in June 2021, Rory Mepham has also prioritised
planning the turnaround of the Group's financial performance. The future plans
to make the Group profitable rely on significant growth in loans under
management. In order to achieve this, the Board is expanding the Group's
presence in the UK and Ireland, together with rebuilding its loans under
management in the Offshore markets of Jersey, Guernsey and Gibraltar. A number
of key hires in the sales and credit teams during the year have been made in
all markets, taking Group headcount from 25 at the end of 2020 to 35 at the
end of 2021. This in turn has increased operating expenditure in FY21 to
£6.2m (FY20: £5.6m).  The investment in new talent is expected to drive and
support growth in the loan book over the coming years.

 

Other priorities of the new management include streamlining organisational
structure, delivery of a robust credit process, effective management systems
and becoming increasingly tech enabled, in order to deliver against the
Company's growth aspirations. Substantial progress has been made and further
details will be provided when the Company releases its results for the year
ended 31 December 2021 expected to be around 31 March 2022.

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulation (EU) No.
596/2014.

 

 

For further information, please contact:

 

 Sancus Lending Group Limited                                +44 (0)1481 708 280
 Rory Mepham

 Liberum Capital (Nominated Adviser and Corporate Broker)    +44 (0) 20 3100 2190
 Chris Clarke
 Lauren Kettle
 Edward Thomas

 Instinctif Partners (PR Advisor)                            +44 (0)207 457 2020
 Tim Linacre

 Sanne Fund Services (Guernsey) Limited (Company Secretary)  +44 (0)1481 755530
 Matt Falla
 Katrina Rowe

 

LEI: 213800S2XOO3YSEGCA26

 

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