Pre-Close Trading Update

RNS Number : 3000U

Non-Standard Finance PLC

17 January 2017

 

Non-Standard Finance plc

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

Pre-close trading update

17 January 2017

Since our last trading update on 1 November 2016, progress at Everyday Loans has continued with strong growth in the total volume of loans issued versus the prior year. At 31 December 2016 the loan book was £122.4m, up 18% year-on-year. Average yield on new loans issued for the year as a whole was 55%, up from 51% at the time of acquisition. We have now opened five new branches in the nine months under our ownership taking the total number of branches to 41.  We will continue to expand our network throughout 2017 with a further five new locations already underway to open later this year. Everyday Loans accounts for some 76% of the Group's combined loan book.

At Loans at Home, the value of our net loan book at 31 December 2016 was up by 19% to £33.4m (2015: £28.4m) and we ended the year with 785 agents, 98 of whom were using our new collections app with approximately 90% of the remaining agents accessing the app in a read-only capacity.  We expect the full roll-out of the new app to be completed across all agents during the first quarter of 2017. Loans at Home accounts for some 19% of the Group's combined loan book.

At Trusttwo, we have seen a significant increase in the loan book in the final quarter of the year - as at 31 December 2016 it had reached £8.8m, a 19% increase over the prior year.  A new and improved version of the website, with even greater product flexibility, will launch in Q1 2017. Trusttwo accounts for some 5% of the Group's combined loan book.

As at 31 December 2016 the Group had gross borrowings of £87.3m and cash at bank of £5.2m.

The full year results for 2016 will be announced on Friday 3 March 2017.

For more information:

Non-Standard Finance plc 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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