Non-Standard Finance (NSF) does what it says on the tin, providing credit to the 10m-12m people in the UK who are either unable to, or do not wish to, use mainstream lenders. And demand for this kind of credit has been little short of explosive, with the combined loan book rising by nearly a third on a like-for-like basis in 2017.
Taking on new agents and opening more branches added significantly to administrative costs and are likely to do so in the current year. Part of this rise reflects the high level of due diligence when offering credit to a new customer, but the benefits have already shone through, with impairments as a percentage of the loan book falling from 29.2 per cent in 2016 to 24 per cent in 2017.
Headline figures were dented by fair value adjustments, amortisation and exceptional costs, but underlying operating profit jumped 72 per cent to £26.9m. Of the three operating arms, Everyday Loans is the largest, and 12 new branches were opened. New products and staff were taken on board and over 1m loan applications were processed for the first time.
Analysts at JPMorgan Cazenove are forecasting operating profit for the year to December 2018 of £44.1m and EPS of 5.01p, rising to £53.7m and 8.07p the year after.
| NON-STANDARD FINANCE (NSF) | ||||
| ORD PRICE: | 68p | MARKET VALUE: | £214m | |
| TOUCH: | 67.2-70.4p | 12-MONTH HIGH: | 85p | LOW: 50p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | na | |
| NET ASSET VALUE: | 74p* | NET DEBT: | 81% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 9.2 | -16.1 | -21.3 | nil |
| 2016 | 72.8 | -9.3 | -2.6 | 1.2 |
| 2017 | 107.8 | -13.0 | -3.3 | 2.2 |
| % change | +48 | +40 | +25 | +83 |
| Ex-div: | 17 May | |||
| Payment: | 15 Jun | |||
| *Including intangible assets of £158m, or 50p a share | ||||
