An increased contribution from acquisitions meant Non-Standard Finance (NSF) significantly reduced its losses last year. However, the group did incur higher start-up costs following its acquisition of Everyday Loans (including Trusttwo) - effectively its largest and highest-margin business unit - in April. This meant the sub-prime lender could get on with growing its loan book, which increased to £165m from £28m in 2015. Guarantor-backed lender Trusttwo built out its systems and staff numbers, which, while doubling administrative costs, delivered a pre-tax profit of £0.3m.
Branch-based lender Everyday Loans had a loan book of £122m by the end of the year, with 39,600 customers. It added five branches to its network, with plans for another 12 this year. The business also plans to launch a loan product for self-employed customers, which chief executive John Van Kuffeler believes are "appallingly underserved" by mainstream banks.
Strong growth in the number of self-employed agents serving home credit business Loans at Home meant a faster than expected increase in customer numbers, accompanied by a spike in impairment charges, though these narrowed as a proportion of revenues. Management increased scrutiny of newly-joined agents, revised its credit scorecard and consolidated sub-scale agencies. Nevertheless Loans at Home grew its net loan book by a fifth to £33.4m.
Analysts at Shore Capital expect adjusted pre-tax profits of £22.2m for the 12 months to December 2017, giving EPS of 5.7p (2016: £13.1m, 3.3p).
NON-STANDARD FINANCE (NSF) | ||||
---|---|---|---|---|
ORD PRICE: | 60p | MARKET VALUE: | £190m | |
TOUCH: | 59.75-61p | 12-MONTH HIGH: | 77p | LOW: 53p |
DIVIDEND YIELD: | 2.0% | PE RATIO: | na | |
NET ASSET VALUE: | 78p* | NET DEBT: | 33% |
Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earning per share (p) | Dividend per share (p) |
---|---|---|---|---|
2015 | 9.2 | -16.1 | -21.3 | 0.0 |
2016 | 72.8 | -9.34 | -2.6 | 1.2 |
% change | - | - | - | - |
Ex-div: 15 May Payment: 20 Jun *Includes intangible assets of £149m, or 47p a share |