A number of US dollar-earning companies swiftly re-rated following the sharp drop in the value of the pound at the end of June, but it has taken the market a little longer to wake up to peer-to-peer lending fund Ranger Direct Lending (RDL). The group, which has more than 90 per cent of its assets denominated in dollars, has seen its share price increase by a fifth since 24 June; no small mark-up for a fund about which little has changed in the past 12 weeks.
Instead, the fund is doing exactly what it promised it would. The portfolio now comprises debt instruments issued by 11 different direct lending platforms across several industries. Two of the three largest categories are what might typically be thought of as riskier debtors - small- to medium-sized enterprises and loans to consumers with improving credit - but management has reported that loan losses remain "below projections".
These strong returns have allowed Ranger to steadily increase the quarterly distributions from 14.62p in February to 26.87p this month, although as we previously noted, liquidity has been supported by the issuance of £30m zero-dividend preference shares in June.
RANGER DIRECT LENDING (RDL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,100p | MARKET VALUE: | £163m | |
| TOUCH: | 1,090-1,100p | 12-MONTH HIGH: | 1,115p | LOW: 900p |
| DIVIDEND YIELD: | 6.4% | PE RATIO: | 14 | |
| DISCOUNT TO NAV: | 7% | NET CASH: | $8.9m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 0.49 | 0.3 | 2.0 | nil |
| 2016 | 16.23 | 6.3 | 67.0 | 47.3 |
| % change | +3228 | +1969 | +3250 | - |
Ex-div: 18 Aug* Payment: 16 Sep* £1 = $1.32. *Q2 dividend. | ||||
