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RNS Number : 4390L
Lendinvest PLC
05 September 2023
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.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
LEI: 213800NWMK3O4UWP9N91
5 September 2023
LendInvest plc
Trading update
LendInvest plc (LSE: LINV) ("LendInvest" or the "Company"), the
UK's leading platform for mortgages, today announces a trading
update for the four month period to 31 July 2023 , and updated
guidance for the financial year ending 31 March 2024.
LendInvest continues to make good progress on several fronts.
Completions in respect of our Flow Bridging product remain strong.
Our recent launch into the large Specialist Residential segment is
on track and is building good momentum. Following the completion of
a new forward-flow funding arrangement, the prospects for our
Buy-to-Let ('BTL') proposition are strong. We also continue to
develop our market-leading proprietary technology to make the
lending process even better and more competitive.
However, the market backdrop continues to remain challenging
with the prospect of further base rate increases required to bring
down persistently high inflation and with house prices starting to
fall and lower levels of mortgage approvals.
Against this backdrop, recent trading in the first four months
of FY24 has fallen short of internal budgets , with a shortfall
against budget in the Company's profit before tax of GBP4.5m
(unaudited) over this four month period.
This primarily relates to the LendInvest Capital division (our
fund management and syndication business which specialises in
larger, more complex loans (i.e. over GBP5m), including Development
Finance and Structured Bridging). The shortfall in this division is
driven by two factors:
1. Performance fees earned from third-party funds were below
expectations, reflecting the fact that lending margins have been
squeezed by rising interest rates and that development projects are
being impacted by rising costs and are taking longer to complete;
and
2. A shortfall in the volume of loan originations, where the
business earns arrangement fees on new lending. This partly
reflects the macroeconomic backdrop, with demand for development
finance reduced as a result of some property developers deferring
new projects out of caution, and also the limited capacity for new
lending in existing managed funds.
There was also some shortfall in the LendInvest Mortgages
division (which includes BTL and Specialist Residential homeowner
mortgages and smaller Bridging loans). Although the underlying
performance and competitive positioning of our BTL proposition
remains encouraging, the operationalisation of the new forward flow
facility for BTL lending has taken longer than anticipated. This
temporarily impacted the volume of origination in July and August
but has now been resolved.
Administrative expenses were also slightly higher due to the
timing of certain one-off items. Impairment costs were in line with
expectations.
Whilst disappointed with current financial performance,
management is confident that the core business fundamentals remain
strong. As a result of the factors noted above and with uncertainty
at this stage as to the quantum and timing of the Company's capital
market transactions, the Board currently expects full year profit
before tax for financial year 2024 to be materially below market
expectations.
However, in response, the business will continue to reduce its
balance sheet exposures as part of its strategy to increase the
proportion of the Company's Platform AuM that is managed for third
parties.
The Company is also currently seeking to increase lending
capacity for its LendInvest Capital division by raising new funds
to deploy around the end of the 2024 financial year.
Strategies to materially reduce the cost base are also being
implemented. Some benefit of these cost reductions is expected to
be realised in the second half of this financial year, with a full
year benefit in the 2025 financial year.
The Board is confident that the proactive strategies noted above
will improve performance in the coming months.
Enquiries:
LendInvest via Teneo
+44 (0)20 7353 4200
Rod Lockhart, Chief Executive Officer
David Broadbent, Chief Financial Officer
Leigh Rimmer, Head of External Communications
investorrelations@lendinvest.com
Panmure Gordon (NOMAD and Joint Broker) +44 (0)20 7886 2500
Atholl Tweedie
David Watkins
finnCap Limited (Joint Broker)
+44 (0)20 7220 0500
Jonny Franklin-Adams
Tim Redfern
Alice Lane
Teneo (Financial PR)
+44 (0)20 7353 4200
Tom Murray
Ed Cropley
Olivia Lucas
Important Notices
The information contained within this announcement is deemed by
LendInvest to constitute inside information as stipulated under the
UK Market Abuse Regulation. By the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain. The person responsible
for arranging for the release of this announcement on behalf of
LendInvest is Rod Lockhart.
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. Forward-looking statements are based on current
expectations and assumptions and are subject to a number of known
and unknown risks, uncertainties and other important factors that
could cause results or events to differ materially from what is
expressed or implied by those statements. Many factors may cause
actual results, performance or achievements of LendInvest 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 LendInvest to differ materially from
the expectations of LendInvest, include, among other things,
general business and economic conditions globally, industry trends,
competition, changes in government and changes in regulation and
policy, changes in its business strategy, political and economic
uncertainty and other factors. As such, undue reliance should not
be placed on forward-looking statements. Any forward-looking
statement is based on information available to LendInvest as of the
date of the statement. All written or oral forward-looking
statements attributable to LendInvest are qualified by this
caution. Other than in accordance with legal and regulatory
obligations, LendInvest undertakes no obligation to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. Nothing in this
announcement should be regarded as a profit forecast.
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END
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Lendinvest (LSE:LINV)
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