Lendinvest Regulatory News (LINV)

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:

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:

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.