Trading update and new loan facility

RNS Number : 4761D

Non-Standard Finance PLC

07 July 2016

 

Non-Standard Finance plc

('Non-Standard Finance', the 'Company" or the 'Group')

Trading update and new loan facility

7 July 2016

During the 26-week period to 30 June, 2016, the Group's trading performance has been strong with year-on-year growth continuing at each of our three operating divisions. 

Our home credit business, now named Loans at Home, has continued to experience strong growth during the seasonally quiet half of the year through further expansion of its network of self-employed agents, up by 50% from 557 at the time of acquisition on 4 August 2015 to 840 on 30 June 2016.  With this increased investment in our agent network, the number of active customers is up 13% over the same period to 98,000 and the net value of loans issued is up 27% in the first six months of the year compared to the same period in 2015.

The acquisition of Everyday Loans, our branch-based lending business, completed on 13 April 2016.  In the short time since taking control, we have developed and extended our product offering and increased the yield on new loans issued by 5%.  At 30 June 2016 the net loan book at Everyday Loans, including Trusttwo, had increased by 17% year-on-year to £120m (30 June 2015: £102m).  

At Trusttwo we have appointed a new Managing Director who starts on 11 July 2016 and who will be responsible for transforming Trusttwo into a leading participant in the UK's guaranteed loans market. 

Everyday Loans, including Trusttwo, received all of its remaining permissions to operate from the Financial Conduct Authority on 20 June 2016.

New loan facility

Loans at Home has secured a new £10m revolving credit facility from Shawbrook Bank Limited, with an opportunity to increase the facility to £15m.  Together with the existing £85m facility for Everyday Loans that can be extended to £105m, we now have a total of £95m of committed debt funding with the ability to increase this to £120m.

John van Kuffeler, Non-Standard Finance's Chairman, said

"The Group is continuing to perform strongly and we remain on-track to achieve our growth targets of 20% annual loan book growth and a 20% return on assets.  

"Our businesses have a history of robust performance during periods of economic uncertainty.  In addition, it appears that Britain's decision to leave the EU may increase the level of demand for our products as mainstream lenders seek to tighten credit further.  As we enter the seasonally significant second half, our strong performance in the year to-date means that we remain confident about the full year outlook."

For more information:

Non-Standard Finance plc John van Kuffeler, Chairman Nick Teunon, Chief Financial Officer & Company Secretary Peter Reynolds, Director, IR and Communications

[phone]

Bell Pottinger Olly Scott Aarti Iyer Molly Stewart

[phone]

About Non-Standard Finance

Non-Standard Finance plc was established to acquire and grow businesses in the UK's non-standard consumer finance sector. Under the direction of its highly experienced main board, the Company has now established a sustainable group of businesses offering credit to the c.12 million UK adults who are not served by mainstream financial institutions. In addition, the businesses acquired now have access to increased levels of funding and have benefited from stronger management controls with more rigorous credit standards; have refined their product pricing in a number of areas; have introduced new compliance protocols; and are investing in new IT infrastructure and systems. These changes have been implemented to balance the delivery of improved customer outcomes with the delivery of substantial returns for shareholders.

The Company announced on 7 July 2015 that it had entered into an agreement to acquire the Home Credit Division of S&U plc ('S&U') which trades as Loans at Home, for an enterprise value of £82.5m, payable in cash, subject to approval by S&U's shareholders and customary closing conditions. The acquisition completed on 4 August 2015 following approval by S&U's shareholders with the final consideration equalling £82.4m after an adjustment for net assets at completion.

On 4 December 2015 the Company announced that it had entered into an agreement to acquire Everyday Loans, the branch-based unsecured lending and guaranteed loans business of Secure Trust Bank PLC, for an enterprise value of £235m. The acquisition, that was funded through a combination of new equity and debt facilities completed on 13 April 2016, following change of control approval from the FCA.

In the year ended 31 December 2015, the Group's businesses generated pro forma revenue of approximately £80m and pro forma adjusted profit before tax of approximately £16m.  As at 31 December 2015 the Group's businesses had a combined loan book of approximately £143m. 

Each of the Group's operating subsidiaries is regulated by the FCA.

 

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