News of a £53.5m cash takeover of George Banco dominated these results from subprime lender Non-Standard Finance (NSF). The deal will build NSF's presence in the guaranteed loan market – an area left unscathed by the latest update from the Financial Conduct Authority (FCA) on high-cost credit. That’s not to say guarantor loans couldn’t come under further scrutiny in the future, but NSF chief executive John van Kuffeler says the company, via its TrustTwo operation, is completely compliant with current FCA rules – as is its takeover target.
George Banco is the second-largest provider of such loans – where a friend or family member guarantees the repayments – a title NSF will soon be able to assume once the deal is completed in September and the combined loan book reaches £40m. At the halfway stage, NSF reported strong loan book growth across all divisions to reach just over £172m (or £182m after fair value adjustments). On a normalised basis, and net of impairments, revenue grew by 14 per cent to £38.2m, helped by an expansion of unsecured credit provider Everyday Loans to 44 branches: four more were opened in July.
Analysts at Peel Hunt expect pre-tax profit of £22m for the year ending December 2017, giving EPS of 5.5p, compared with £14.8m and 3.8p in 2016.
| NON-STANDARD FINANCE (NSF) | ||||
| ORD PRICE: | 70p | MARKET VALUE: | £222m | |
| TOUCH: | 70-72p | 12-MONTH HIGH: | 77p | LOW: 50p |
| DIVIDEND YIELD: | 2% | PE RATIO: | na | |
| NET ASSET VALUE: | 76p* | NET DEBT: | 37% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 29.1 | -6.0 | -1.7 | 0.30 |
| 2017 | 46.3 | -4.2 | -1.1 | 0.50 |
| % change | +59 | - | - | +67 |
| Ex-div: | 21 Sep | |||
| Payment: | 18 Oct | |||
| *Includes intangible assets of £146m, or 46p a share | ||||
