LendInvest sells Buy-to-Let mortgage portfolio

Lendinvest PLC

30 May 2023

 

LEI: 213800NWMK3O4UWP9N91

30 May 2023

LendInvest plc

LendInvest sells c.£250 million Buy-to-Let residential mortgage portfolio

LendInvest plc (AIM: LINV; "LendInvest" or the "Group") the UK's leading platform for mortgages, today announces the sale of a portfolio of Buy-to-Let residential mortgages (the "Portfolio") to  Chetwood Financial Limited (the "Buyer") for a cash consideration of £243 million inclusive of the proceeds from cancelled interest rate derivatives (the "Transaction"). Following completion of the Transaction, LendInvest will continue to manage and service the Portfolio on behalf of the Buyer.

This sale is another demonstration of LendInvest's commitment to optimising its funds under management, while at the same time reducing the proportion of its platform assets under management on its balance sheet. The Portfolio comprises mortgages that originated from 1 March 2022 to 30 November 2022. Within this timeframe, there was a substantial rise in  overnight indexed swap rates due to increases made to the base rate, which rose from 0.5% to 3.0%. As a result, the profitability of these mortgages was negatively affected. The proceeds from the Transaction will be used to repay the facilities that financed the assets, which allows that capital to be redeployed to originate new mortgages with stronger margins.

The book value of the Portfolio as at 26 May 2023 was c.£250 million. As such, a net pre-tax loss on the sale of the Portfolio and the cancellation of the related derivatives is estimated to be around £10.5 million (subject to audit) which will be recognised through the P&L in the year ended 31 March 2024. This largely offsets the net pre-tax profit of £10.8 million generated from the sale of residual economic interest announced on 19 April 2023 leaving the P&L impact marginally positive.

Commenting on the Transaction, Rod Lockhart, CEO of LendInvest, said: "This transaction demonstrates our proactive approach to capital management and supports our longer term strategy to manage an increasing  proportion of platform assets for third parties. It also initiates a new partnership, adding to a growing list of global financial institutions choosing to back our mortgage products. We believe the diversity, sophistication and continued commitment of our funding partners is a powerful demonstration of their trust in our capabilities."

Enquiries:

Rod Lockhart, Chief Executive Officer Alex Dee, Head of Investor Relations Leigh Rimmer, Head of External Communications [e-mail]	[phone]
Panmure Gordon (NOMAD and Joint Broker)  Atholl Tweedie / Stephen Jones / Tom Scrivens	[phone]
finnCap Limited (Joint Broker)    Jonny Franklin-Adams / Tim Redfern	[phone]
Teneo (Financial PR)   Tom Murray / Ed Cropley / Olivia Lucas	[phone]

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.

www.lendinvest.com | @lendinvest

Important Notices
The information contained within this announcement is deemed by LendInvest to constitute inside information as stipulated under the UK Market Abuse Regulation. By the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain. The person responsible for arranging for the release of this announcement on behalf of LendInvest is Rod Lockhart.

The information contained in this announcement is for information purposes only.  This announcement has been prepared in accordance with English law, the UK Market Abuse Regulation and the AIM Rules for Companies and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

Subject to the requirements of the UK Market Abuse Regulation and the AIM Rules for Companies, the delivery of this announcement shall not create any implication that there has been no change in the affairs of LendInvest since the date of this announcement or that the information in this announcement is correct as at any time subsequent to its date.

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.

 

END