Last checked at 13 Apr 2023 07:00
LEI: 213800NWMK3O4UWP9N91
13 April 2023
LendInvest plc
FY 2023 Trading Update
LendInvest plc (AIM: LINV; "LendInvest"), the UK's leading platform for mortgages, announces its trading update for the year ended 31 March 2023, ahead of its full year results announcement in mid-July 2023.
Highlights:
31 March 2023(£m) | 31 March 2022(£m) | Growth(%) | 30 September2022(£m) | Growth(%) | |
Platform Assets underManagement("Platform AuM") | 2,587.0 | 2,146.1 | +20.5 | 2,431.1 | +6.4 |
Funds under Management("FuM") | 3,605.9 | 2,483.6 | +45.2 | 3,442.1 | +4.8 |
● Platform AuM increased by 20.5% year-on-year, and by 6.4% in H2, driven by growth across all our key product categories (professional buy-to-let, bridging and development finance). The pace of growth began to slow towards the end of H1 as the Bank Rate continued to increase. This was compounded by the market reaction to the Government's Growth Plan (also known as the mini-budget) in late September 2022.
● FuM increased by 45.2% year-on-year and by 4.8% in H2. We continue to see resilient demand from a wide range of sophisticated investors for funding loans originated on our platform. We have maintained our lending headroom at more than £1 billion to support our borrowers when market conditions improve.
● Launched our first residential mortgage products, bringing our technology-driven model to this £1.7 trillion* market for the first time. Our initial Residential Mortgage product range is aimed at borrowers with multiple sources of income, the self-employed and small-business owners. Lloyds Bank increased its funding to us by £120 million (to £300 million in total) to support this new growth vector.
● HSBC is providing up to £100 million in funding, together with the British Business Bank via its government-backed ENABLE Guarantee programme, to fund our development finance products, allowing us to continue to support home-building and alleviate the undersupply of housing in the UK.
● Successfully completed the sale of our residual economic interest in the Mortimer BTL 2020-1 securitisation for £7 million, in line with our strategy to optimise FuM while selectively moving assets off balance sheet.
● Launched our Mortgage Tech Meetup event series, bringing together property and technology experts from across the industry with our mortgage technology specialist team to discuss the future of mortgage technology and to provide a framework for market participants to deliver much-needed innovation in the UK mortgage space.
Rod Lockhart, Chief Executive Officer of LendInvest, said:
"We have continued to deliver on the commitments we laid out at our IPO. We are growing and optimising our FuM accessing strong demand from some of the world's largest and most sophisticated financial institutions. We are expanding our Platform AuM and we are continuing to invest in our technology platform to further strengthen our competitive advantage as a technology-driven lending and funding platform for mortgages. We also celebrated a landmark for LendInvest with our entry into the UK residential mortgage market, leveraging our success and track record in professional buy-to-let, bridging and development finance. Our proprietary technology is now available to help individuals with multiple sources of income, or the self-employed, and small-business owners, to secure a mortgage, meeting the needs of a large, underserved segment of the market.
"While we remain mindful of the macroeconomic backdrop, we have confidence in our growth strategy. Our technology enables us to continue developing disruptive new solutions in existing and new parts of the mortgage market, giving us a competitive edge with brokers and borrowers and helping us to continue to attract diverse sources of capital."
Current trading and outlook
The Board expects to announce results for the year ended 31 March 2023 in-line with market expectations.**
As we progressed through the second half of the financial year, mortgage rates eased from their highs of October 2022 which marginally improved confidence. More than 1.4 million households in the UK are facing the prospect of interest rate rises when they renew their fixed rate mortgages in 2023. We have seen a shift, with an increase in borrowers opting for tracker mortgages which provide greater flexibility to remortgage if rates reduce. Some of our commercial borrowers are seeing the weaker property market as a buying opportunity and in March we recorded our highest ever level of applications for bridging loans.
Despite ongoing economic uncertainties our technology provides us with a competitive advantage and an opportunity to win market share. We have £1 billion in lending headroom which provides opportunities for continued growth in the year ended 31 March 2024. Our recent launch into residential mortgages will continue to ramp up and provide a tremendous long-term growth opportunity as we leverage our technology to make even the most complex of mortgage applications simpler and faster for a neglected customer base.
Source:*FCA -The outstanding value of all residential mortgage loans was £1.7 trillion at the end of Q4 2022.** Market expectations for profit before tax for the year ended 31 March 2023: £14.3 million based on current forecasts from 3 analysts.
Enquiries:
Rod Lockhart, Chief Executive Officer Michael Evans, Chief Financial Officer Alex Dee, Head of Investor Relations Leigh Rimmer, Head of External Communications investorrelations@lendinvest.com | +44 (0)20 7353 4200
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Panmure Gordon (NOMAD and Joint Broker) Atholl Tweedie / Stephen Jones / Tom Scrivens | +44 (0)20 7886 2500 |
finnCap Limited (Joint Broker) Jonny Franklin-Adams / Tim Redfern | +44 (0)20 7220 0500
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Teneo (Financial PR) Tom Murray / Ed Cropley / Olivia Lucas | +44 (0)20 7353 4200 |
About LendInvest
LendInvest is a leading platform for mortgages 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 £1.7 trillion* property finance market which is dominated by manual paper processes and poor customer experience. 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 growth.
Experts in Real Estate investment, we have designed a variety of 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 £1.7 trillion at the end of Q4 2022.
Glossary
Platform AuM
We define Platform AuM as the sum of (i) the total amount of outstanding loans and advances (including accrued interest, and gross of impairment provisions and fair value adjustments), (ii) off-balance sheet assets, which represents the total amount of outstanding loans and advances (including accrued interest) that we originate but do not hold on our balance sheet, comprising those loans that are held by our off-balance sheet entities. Off-balance sheet assets are not presented net of any impairment provisions relating thereto.
The directors of LendInvest view Platform AuM as a useful measure because it is used to analyse and evaluate the volume of revenue generating assets of the platform on an aggregate basis and is therefore helpful for understanding the performance of the business.
FuM
We define FuM as the aggregate sum available to us under each of our funding lines. FuM is used to originate revenue generating AuM. The directors of LendInvest view the difference between FuM and Platform AuM as the headroom for future growth.
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.