Half Year Trading Update and Loan Book Summary
18 July 2023
Vector Capital Plc
("Vector Capital", the "Company" or the "Group")
Half Year Trading Update and Loan Book Summary
"Trading in line with expectations utilising Vector Capital's strong capital base"
Vector Capital Plc (AIM: VCAP), a commercial lending group that offers secured loans to property developers and investors in England & Wales, is pleased to provide a half-year trading update for the period ended 30 June 2023 and a loan book summary as at the same date.
Trading update
As indicated in our 2022 Annual Report, 2023 is a year of consolidation where the Company plans to strengthen its position in a lending market which continues to be impacted by increasing interest rates, soft property prices and persistent inflation.
Vector Capital's strong capital base, with share capital and reserves as at 31 December 2022 of £25.1m, representing 55.4 pence per share, together with competitively priced borrowings of £4m advanced from its parent, Vector Holdings Limited, means that the Company is very well placed to withstand these challenging market conditions. This financial stability is reinforced by the Company's excellent relationships with its introducer broker network and the continued appetite to provide funding from its wholesale and specialist lender contacts. Overall, the Board is pleased to announce that at the half year the Company is trading in line with market expectations.
Given market conditions, the Company remains cautious in assessing new lending opportunities. However, new business enquiry levels and the pipeline remain strong, despite higher interest rates impacting borrower affordability. Redemptions continue to be applied in new customer advances on a regular basis.
Loan book summary
As summarised below, the Company's loan book at 30 June 2023 was £49.0m, reflecting aggregate planned redemptions of £11.8m and new loans advanced of £7.6m during the six-month period. The overall average loan to value at the period end was 58.3%.
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As at 30/06/23 |
As at 31/03/23 |
As at 31/12/22 |
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Loan book |
£49.0m |
£48.4m |
£53.2m |
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Number of live loans |
103 |
102 |
107 |
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Average loan size |
£476,000 |
£475,000 |
£499,000 |
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Average loan to value |
58.3% |
57.1% |
59.0% |
The Company announced on 12th June that its wholesale bank debt providers increased debt facilities by £5.0m, bringing the total wholesale bank facilities available to £45.0m. Furthermore, that within these facilities, the Group now has the capacity to drawdown £2.5m toward loans secured by second charges, allowing the flexibility for cautious and selective expansion of the Group's loan book into higher margin loan agreements. The Group has substantial unutilised bank facilities that can be accessed when opportune.
Agam Jain, CEO of Vector Capital, commented: "We are very pleased with the Group's trading performance in the first six months of the year, further details of which will be presented in the interim results in the first week of September. Our strong capital base differentiates us from many of our competitors, while the extension and broadening of our debt facilities provides valuable flexibility in the way that we can assess new lending opportunities. High interest rates are now likely to be with us for a continued period, during which time we can seek to maximise return on our own capital and, on a selective basis, borrowed funds from our debt providers."
This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.
For further information please contact:
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Vector Capital plc |
c/o IFC Advisory |
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Robin Stevens (Chairman) |
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Agam Jain (CEO) |
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WH Ireland Limited |
020 7220 1666 |
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Hugh Morgan, Chris Hardie, Darshan Patel |
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IFC Advisory Limited |
020 3934 6630 |
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Graham Herring, Florence Chandler, Zach Cohen |
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About Vector Capital:
Vector Capital provides secured, business-to-business loans to SMEs based in England and Wales. Loans are typically secured by a first legal charge against real estate. The Company's customers typically borrow for general working capital purposes, bridging ahead of refinancing, land development and property acquisition. The loans provided by the Company are typically for renewable 12-month terms with fixed interest rates.
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