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(Alliance News) - Distribution Finance Capital Holdings PLC on Thursday reported a widened interim loss due to its recent initial public offering but recorded significant gains in its loan book.
Shares in the lender were 8.1% higher in London in midday trading at 134.00 pence each.
In the six months to June 30, Distribution Finance Capital reported a widened pretax loss of GBP7.3 million compared to GBP4.1 million the year before. The lender attributed the worsened loss to the GBP3.3 million charges relating to its demerger from parent TruFin PLC and subsequent initial public offering.
The company listed on AIM in May.
Net income rose dramatically to GBP2.6 million from GBP204,000 the year before. Gross revenue jumped to GBP5.4 million from GBP1.9 million the year before.
Distribution Finance Capital's loan book at the end of the half was GBP168.0 million, more than double the GBP64.1 million reported at the same point the year prior. Distribution Finance Capital's loan originations in the first half increased sharply to GBP206.0 million from GBP92.1 million the year before.
The lender's net interest margin in the first half improved to 3.8% compared to 0.9% the year before.
"Overall, DFC's portfolio continues to perform well and our multi-level security model with overall portfolio advances running at 87% loan-to-value versus wholesale asset values provides considerable security across our loan book," the company added.
Distribution Finance Capital now lends to 66 manufacturers, up from 45 at the end of 2018.
The lender said: "During the first half of 2019 we have signed several large manufacturers in the motorcycle and motorhome spaces and are seeing increasing traction with larger players at both a manufacturer and distributor level as our brand becomes increasingly well established."
Distribution Finance Capital believes its "very significant" pipeline affords its "considerable opportunities" before considering the new products and customers its potential bank licence grants. The lender estimates its customers hold a potential GBP300 to GBP400 million in unapproved credit.
Chief Executive Chris Dailey added: "The first 6 months of the year have seen the business continue to scale in line with our plans, and these results represent a particularly strong performance given the competing demands on the DFC team as we completed the demerger and IPO and progressed our bank licence application."
Distribution Finance Capital said it is "confident" its banking licence will be granted in the fourth quarter of 2019 and expects to launch a range of deposit products.
Chair John Baines said: "While clearly there is some uncertainty in certain sectors of the market given the broader macro-economic situation, but as yet we have not seen any significant changes to customer behaviour. Our model is deliberately designed to operate across different industry sectors, which will allow us to rebalance our business quickly should the need arise."