- Annual revenue down 3 per cent to £5.7mn
- £0.7mn bad debt provision
- Pre-tax profit down 26 per cent to £2.1mn
- 2.53p per share dividend maintained
Commercial lender Vector Capital (VCAP:29p) took the decision to reduce lending last year due to more challenging property market conditions and the negative impact of rising interest rates and inflationary pressures on its customers.
The company offers secured property loans to small property developers who buy properties to refurbish and re-sell. Some of these customers have been impacted by delays in completions, higher building costs and a general softening of property values. At the same time, the higher stress tests applied by traditional banks have made it more difficult for small developers using bridging and development finance to re-finance their loans to buy-to-let mortgages and term finance. The higher cost of borrowing has also impacted their ability to sell properties as buyers struggle to get mortgages.