H1 Trading Update

RNS Number : 5510O

LendInvest PLC

11 October 2021

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

LEI: 213800NWMK3O4UWP9N91

11^th October 2021

 LendInvest plc

 H1 Trading Update

 Strong first half performance

LendInvest plc (LSE: LINV), the leading asset manager for property finance, is pleased to release its H1 Trading Update for the six months ending 30^th September 2021 showing sustained progress across all parts of the business over the period.

Financial Highlights:

£m	H1 2022	H2 2021	% Change	H1 2021	% Change
Platform Assets Under Management ("AUM")	1,825.9	1,573.3	16.1%	1,386.2	31.7%
Platform Funds Under Management ("FUM"):	2,875.2	2,486.0	15.7%	2,056.0	39.8%

Strategic Highlights:

●   Successfully joined the AIM Market in July 2021, raising £40 million to invest in our property finance product roadmap and the continued development of our technology

● Upsize of J.P. Morgan Separate Account to £725m through the sale of a £100m portfolio of prime Buy-to-Let ("BTL") loans during September, with utilisation significantly ahead of plan

● Successful closing of our third residential-mortgage backed securitisation ("RMBS") in June ("Mortimer BTL 2021-1 plc"), which achieved the best pricing on a UK BTL securitisation in over 13 years

●Renegotiation and expansion of Financial Partnerships with Citi and National Australia Bank, improving capital efficiency, pricing and criteria  

● A new £150m Financial Partnership with Barclays and HSBC to fund short term bridging loans with a particular focus on the retro-fitting and renovation of the UK's ageing housing stock

● Key management hires in technology and for our Specialist Homeowner product which we intend to launch in 2022

● Market conditions remain positive and the strong trading performance in the first half supports our ongoing confidence in meeting expectations for the full year 

Notice of Results:

●LendInvest will be releasing results for the six months to 30 September 2021 on 9^th December 2021.

Platform Momentum

Market conditions continue to be positive for our proprietary platform.

The housing market has remained favourable in the six months to 30 September 2021 despite the wind down of the stamp duty land tax relief. We expect this trend to continue in the second half of the year due to a lack of supply coupled with strong demand, and people's desire for extra space. Consumer confidence levels have weakened slightly in recent weeks and whilst base rates may modestly rise in the short term, these are not expected to have a material negative effect on housing demand. Mortgage rates are expected to remain at affordable rates, against a background of high employment levels.

Platform AUM grew 31.7% in the period to £1,825.9m vs £1,386.2m in H1 2021 (16.1% vs H2 2021), mainly driven by record originations within BTL. This was underpinned by good market conditions and the strength and efficiency of the technology platform.

Platform FUM grew 39.8% in the period to £2,875.2m vs £2,056.0m in H1 2021 (15.7% vs H2 2021), driven by the upsizing of current Financial Partnerships and new transactions, detailed in the strategic highlights.

Management and Technology Hires 

We were very active in recruitment during the period, consistent with the strategy described at IPO of accelerating our product and technology roadmap.

The targeted launch in 2022 of the Specialist Homeowner Product led to the strengthening of the team in that area, and the appointment of Esther Morley as Managing Director, Homeowner Mortgages. Prior to joining LendInvest, Esther was Managing Director, Mortgages at Secure Trust Bank, and before that she worked for 10 years at Kensington Group - the UK's leading specialist homeowner mortgage lender - where she was latterly responsible for all aspects of origination and portfolio performance for the Specialist Mortgage business.

With respect to technology, we saw a 26% increase in technology headcount during the period, and the appointment of Peter Wallis as VP of Technology. Peter was previously Chief Technology Officer ("CTO") at Sporting Group, and before that CTO at ETX Capital. Prior to ETX he was Chief Architect at Camelot Lotteries.

Rod Lockhart, Chief Executive of LendInvest, commented:

"I am very pleased to present a strong first trading statement after our successful IPO in July. We have achieved strong growth in Platform AUM and FUM.

There have been a number of highlights during the period, including a hugely successful securitisation and funding deals signed with a number of leading financial institutions. I am delighted with the team's continual drive to take advantage of the current positive market conditions by taking profitable opportunities as they present themselves.

We're pleased to have strengthened our management team welcoming Esther and Peter to LendInvest. They bring high quality skill sets and extensive experience to the Company as we seek to scale the business and accelerate our technology roadmap.

I remain confident our unique business model will allow us to continue to disrupt the property finance market for the benefit of all our stakeholders."

LendInvest's Business Model

LendInvest has, over a 13 year period, developed proprietary technology and digital solutions that have allowed us to capture market share from incumbents and attract significant third-party capital.

We believe that the property finance market in the United Kingdom, which is worth £1.6 trillion by outstanding mortgage balances, is one of the few remaining verticals in the UK financial services sector that is yet to be disrupted by technology. It has historically been characterised by rigid products, poor customer experience and manual, paper-based processes. We also believe that ongoing structural shifts in the UK property finance market, from one historically dominated by traditional banks, to a broader market of alternative property finance providers, increasingly highlights the limitations of legacy technologies and processes used by traditional lenders.

Our technology infrastructure allows us to disrupt this market. Through the platform, attractive products and pricing are offered to Borrowers and Intermediaries through a seamless and customer-centric process.

As an asset manager, we have designed a variety of investment solutions and products for our Investors that 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.

From these investment solutions, we generate revenue through management, performance and servicing fees on Separate Accounts and Funds, and interest charged on assets funded by Financial Partnerships and RMBS. Arrangement fees are earned on all property finance assets that we originate.

At the heart of our business is the proprietary Loan Engine. This is a patented asset management system which optimises the allocation and legal transfer of property finance assets across the various investment portfolios. The Loan Engine is a significant driver of operating leverage through its automation of processes that would otherwise require manual intervention. Assisted by integration with accounting software, and the application of data analytics, the Loan Engine automatically matches incoming loans to the investment and portfolio criteria of our Investors and Financial Partners, and in a way that is highly scalable and reduces risk of human error.

Our proprietary origination technology, Genesys, is the portal provided to customers and through which assets are originated. Genesys leverages many third-party API integrations and our proprietary rules engine to provide a frictionless application process benefiting from automated data collection.

LendInvest is addressing a huge market with enormous potential for disintermediation, utilising a fully scalable platform driving efficiency and automation. We believe there is significant potential to expand into other segments of the mortgage market and we will continue to update shareholders on those developments in due course.

- Ends -

Enquiries:

LendInvest      via Tulchan Communications

Rod Lockhart, Chief Executive Officer    [phone]

Michael Evans, Chief Financial Officer

Leigh Rimmer, Senior PR Manager     

[e-mail]   

   

Berenberg (Nominated Advisor and Broker)      [phone]

Alex Reynolds     

Jack Botros

Tulchan Communications (Financial PR)      [phone]

Tom Murray

Matt Low     

Misha Bayliss

Olivia Lucas 

Important Notices

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. These forward looking statements reflect LendInvest's current expectations concerning future events and speak only as of the date of this announcement.  No statement in this announcement is intended as a profit forecast or estimate for any period.

Many factors may cause actual results, performance or achievements of the Company 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 the Company to differ materially from the expectations of the Company, include, among other things, general business and economic conditions globally, industry trends, competition, changes in government and changes in regulation and policy, including in relation to the environment, health and safety and taxation, labour relations and work stoppages, interest rates and currency fluctuations, changes in its business strategy, political and economic uncertainty and other factors. Such forward-looking statements should therefore be construed in light of such factors. Neither the Company nor any of its Directors, officers or advisers provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur.

 

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