Investor day and trading update

RNS Number : 9238N

Non-Standard Finance PLC

01 November 2016

 

Non-Standard Finance plc

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

Investor day and trading update

1 November 2016

Ahead of an investor day to be held in London today, the Company is providing the following trading update.

Everyday Loans

In the seven months since we acquired the business, Everyday Loans has continued to perform strongly, significantly increasing the volume of loans issued versus the prior year. At 30 September 2016 the loan book was £120.0m, up 18% year-on-year.

It continues to write new business at an average yield of 56%, up from 51% at the time of acquisition. At the same time, our programme of opening up to 20 new branches over the medium-term is well underway having already opened Preston, Reading, Derby and Walsall this year. Everyday Loans accounts for some 75% of the Group's combined loan book.

Loans at Home

Loans at Home continued its rapid growth in the third quarter. The value of net loans issued in the first nine months of the year was up 31% versus the prior year; and the value of our net loan book increased by 23% to reach £27.5m at 30 September 2016.

Such strong growth meant that impairment and agent support costs were higher than planned in the third quarter but are now reducing. Having completed the initial growth phase more rapidly than anticipated and in preparation for the seasonally important lending period in the run-up to Christmas, we have merged a number of our smaller agencies and are concentrating on lending to our enlarged base of quality customers. As a result, we expect to have around 750 agents lending to around 95,000 customers at the year end. Loans at Home accounts for some 20% of the Group's combined loan book.

Trusttwo

At Trusttwo we have appointed a highly experienced management team and have built the operational infrastructure to support a much larger guaranteed loan business than we have today. Accelerated growth from its £8.2m loan book as at 30 September 2016 is expected to commence in November 2016. Trusttwo accounts for some 5% of the Group's combined loan book.

Group

As at 30 September 2016, the Group had gross borrowings of £77.6m; cash at bank of £2.8m; and committed but undrawn facilities of £15.4m.

Overall, the Group's performance is broadly in-line with expectations and as we draw up our budgets for 2017 we remain focused on striking the right balance between growth and profit, continuing our progress towards achieving an overall target annual loan book growth of 20% and a 20% return on assets in each of our operating businesses.

Investor day

The Company will host a series of investor presentations today at the Victoria Embankment offices of JP Morgan, beginning at 9.30 am. The presentations will provide an overview of NSF's strategy and outlook from the executive management team and the senior management of NSF's operating divisions. The Company confirms that no new material information will be provided during the presentations.

A copy of the presentation being given will be available later today on the Group's corporate website: www.nonstandardfinance.com.

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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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