REG - Vector Capital PLC - Year-end Trading Update

Vector CapitalAnnouncement

05/02/2024 07:00

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RNS Number : 9243B  Vector Capital PLC  05 February 2024

Vector Capital plc

 

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

 

Year-end Trading Update

 

A resilient performance with revenue above market expectations and early signs
of an improvement in wholesale borrowing rates and terms

 

Vector Capital plc (AIM: VCAP), the commercial lending group that offers
secured loans to property developers and investors in England & Wales, is
pleased to provide an update on trading for the year ended 31 December 2023.

 

The Group has delivered a resilient operational performance, despite
the ongoing uncertain market conditions in the UK, where certain borrowers
continue to be impacted by high interest rates, and where residential property
values generally remain depressed. A strong pipeline of good quality
opportunities during the year has resulted in a buoyant loan book performance
described below. Subject to completion of the 2023 audit, revenue for the year
is expected to be above market expectation at not less than £5.7 million.
Although this represents a small decrease on the revenue of £5.9 million
achieved in 2022, this is a very pleasing performance given the Board's
necessarily cautious approach to lending during the year.

 

As previously announced, the Group's aggregate loan book was £48.9 million at
31 December 2023, compared with £53.4 million at 31 December 2022. At 31
December 2023, the Group had 108 live loans (2022: 107), with an average loan
size of approximately £452,000 (2022: £499,000).

 

The Group continues to benefit from its strategic decision to mitigate against
default risk by diversifying its portfolio and moving its weighting towards
lower-value loans, reflected in the average year end loan figures referred to
above.

 

During 2023, the Group also increased its wholesale bank debt facilities by
£5 million to £45 million and increased its £3 million inter-company loan
with its parent company Vector Holdings Limited, which, following a small
repayment in January 2024, now stands at £3.5 million.

 

Since the year end, the Group has begun to see a softening in the interest
rates offered by some lenders in the wholesale market, and a willingness in
some cases to loosen loan to value requirements. Whilst this is encouraging,
these are early days in the hoped for reduction in UK interest rates.

 

The Company expects to announce its results and recommend its final dividend
for the year ended 31 December 2023 in April 2024.

 

Agam Jain, CEO of Vector Capital, commented: "We are very pleased to have
returned a resilient revenue performance ahead of market expectations in 2023,
notwithstanding difficult market conditions. The outturn for the year is
expected to be in line with market expectations and reflects the continuing
quality of our pipeline, the proven strength of our operating systems and the
long established and supportive relationships with our wholesale debt
providers. Our business model and strong capital base has proved its worth
during the last two years and has created both net asset growth and attractive
dividends. The Company is cautiously optimistic of the outlook for the
business in 2024 and beyond as, hopefully, interest rates fall and the UK
economy begins to grow."

 This announcement contains inside information for the purposes of Article 7
of the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

Enquiries

 Vector Capital plc                             Via IFC
 Robin Stevens (Chairman)
 Agam Jain (CEO)

 WH Ireland Limited                             020 7220 1666
 Hugh Morgan, Chris Hardie, Darshan Patel

 IFC Advisory Limited                           020 3934 6630
 Graham Herring, Florence Chandler, Zach Cohen

 

Notes to Editors

Vector Capital Plc provides secured, business-to-business loans to SMEs based
principally in England and Wales. Loans are predominately secured by a first
legal charge against real estate. The Group's customers typically borrow for
general working capital purposes, bridging ahead of refinancing, land
development and property acquisition. The loans provided by the Group are
typically for renewable 12-month terms with fixed interest rates.

 

 

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